The Ecology of Impact
What nature can teach us about the organizations that drive change
Tipping the Totem Pole
Have you ever noticed that a great way to start a fight is to question the source of positive impact?
Policy, or Industry?
Creatives, or Operators?
Technologists/Researchers, or Commercializers?
Academic Theorists, or Practitioners?
Activists, or Entrepreneurs?
I once nearly got a lovely glass of malbec thrown in my face on a date because I didn't want to admit that capitalism is the corrupting force of society. She was a Marxist. Quite a few wine lovers are, it turns out...
Most people subscribe to a causal theory of change--that impact on the world comes in streams that emanate from a single source. Maybe an inspiring activist like MLK? Maybe a landmark policy program like the New Deal? Maybe an innovative company like Google or Tesla?
These debates matter because they inform what careers people choose (lots of people seek to "maximize impact!"), and where society allocates capital, talent, and social prestige. But they're also misguided because it creates tension and ego, rather than cooperation and symbiosis. People take personal offense if ever their craft isn't positioned near the top of the totem pole.
On a surface level, the way we try to sidestep this tension (in schools, in politics, in pop culture) is through leveling: "Everyone matters!" It's a no-favorite-child maneuver from the good parents’ handbook.
But that creates more problems because you HAVE to prioritize. What stakeholder groups do you support? With how much resourcing? What should be the policy focus? If any group decides to go on strike because they're essential to the system, is everyone else entitled to?
If everything matters, then nothing matters.
But that's where ecology can help. Natural systems are beautiful models of change because they're highly interdependent (a lot of "essential" pieces), constantly changing, and yet phenomenal at resource allocation.
I want to propose that we can use an ecological lens to explain how different types of impact organizations interact.
The resulting analogies can give us profound insight into how organizations in the impact ecosystem should work, and how the ecosystem should respond if it's struggling.
Mapping the Ecology of Impact
HOW IT DRIVES IMPACT: Government and institutions provide the substrate for societies and economies to function. Rule of law and property rights (physical and intellectual) engender the trust needed for financial institutions to work, businesses to transact, and communities to feel safe. It's widely understood that the strength of institutions are the primary predictor of economic development and social progress. Policies and legislation shape the rules of engagement in different industries. Government spending, subsidies, and tax policy drive innovation in socially impactful areas, especially climate.
WHEN IT GOES WRONG: Too much corruption, bureaucracy and red tape slows down innovation--you can't grow strong roots in clay. Meanwhile, laissez-faire institutions and poor regulation is too unstable and erodes trust--strong trees can't grow in sand. Impactful missions need to be able to take advantage of government support, and trust that the support won't evaporate during the next election cycle.
TYPICAL ORG MODELS:
Administrative Bureaucracies: hierarchical, centralized decisions, highly risk-averse, compliance-oriented
Political Campaigning: non-hierarchical, decentralized decisions, risk-tolerant, single-outcome-oriented (winning)
HOW IT DRIVES IMPACT: Financial institutions and liquidity make everything circulate. Banks and insurance companies help impactful organizations transact and manage risk. Investment organizations (equity investors, lenders, grant-making institutions) give organizations the liquidity to keep their metabolisms and innovation machines running. If they dry out, they die.
WHEN IT GOES WRONG: Too much rain can be a problem if the soil isn't healthy enough to retain it. Flooding capital into companies can be risky if the institutions aren't mature enough to handle it (e.g. SPAC attack of 2021, crypto froth...). Lots of water erodes bad soil, and undermines the institutions as a whole.
TYPICAL ORG MODELS:
Corporate Bureaucracies (banks, insurance, etc.): hierarchical, centralized decisions, risk-averse, profit- and/or growth-oriented (shareholder returns)
Bureaucratic Allocators (banks, large foundations, sovereigns, pensions, etc.): non-hierarchical, centralized decisions, risk tolerant, shareholder/return-oriented
Nimble Allocators (investment funds and grant-makers): non-hierarchical, centralized decisions, risk tolerant, shareholder/return-oriented
HOW IT DRIVES IMPACT: Different impactful missions, technologies, and policy agendas need different amounts of attention and support. Advocacy groups help shine a light on what's most pressing, by efficiently communicating the severity problems. Just as plants need sunlight and water from the soil in order to photosynthesize, businesses need advocacy groups to work with policymakers and the investment community to generate the right support. Some vegetation needs a lot of sunlight (some businesses need a LOT of policy support and funding), others are happy beneath the canopy.
WHEN IT GOES WRONG: The understory is a competitive place. A lot of impactful projects don't get the attention, advocacy, and policy support needed to get off the ground.
TYPICAL ORG MODELS:
Institutional Advocates (think tanks, industry consortiums, etc.): non-hierarchical, centralized decisions, risk-tolerant, policy-oriented
Programmatic Nonprofits (mission-driven education, services, etc.): varying hierarchy, varying centralization, varying risk attitude, reach-oriented
Cell-based Activists (e.g. protest groups, policy campaigners): non-hierarchical, decentralized decisions, risk-taking, awareness-oriented
HOW IT DRIVES IMPACT: Knowledge and human capital are the lifeblood of any ecosystem--especially one oriented toward impactful missions that need innovative thinking. The quality of research, education, and skill-building institutions and universities will determine how fertile the soil is, and how easily impactful projects can take root and grow. Microbes and fungi play this role in nature, helping with nutrient exchange between trees of a forest. A cubic inch of soil can hold eight miles of cells, channeling photosynthetic sugars and other useful signals. They compose the true "network" of the ecosystem. In a way, the microbiome "farms" the forest.
WHEN IT GOES WRONG: Poor soil biology slows the transfer of nutrients, but also hurts trees' communication between one another, which is critical for protecting against weather conditions, pests, and other threats. This is called the Wood Wide Web, and you can learn more here and here. A sparse talent and knowledge microbiome creates a stagnating industry, with businesses that don't learn from each other, struggle to attract talent, and fail to innovate.
TYPICAL ORG MODELS:
Corporate Research Groups: varying hierarchy, varying centralization, risk-loving, application-oriented (business use cases)
Institutional Research Groups (universities, national labs, etc.): varying hierarchy, centralized decisions, risk-tolerant, reputation- and reach-oriented
Independent Research Projects (e.g. Linux): non-hierarchical, decentralized decisions, risk-loving, reach-oriented
Educational Institutions (universities, trade schools, etc.): varying hierarchy, centralized decisions, risk-tolerant (e.g. program experimentation), reputation- and outcome-oriented (job placement)
HOW IT DRIVES IMPACT: Businesses are the trees and vegetation: the main structures we see when we look around society. These can be corporations, startups, professional services, or family businesses. They come in all shapes and sizes. They offer food and shelter for everything living in a forest: the "products and services" of the impact ecosystem that--ideally--fulfill most of Maslow's Hierarchy of Needs. They also come and go. Some last centuries, and some only one season. Similar trees may compete for sunlight, water, and nutrients, but most also need symbiotic partnerships with each other--shrubs may want shade from tall neighbors, vines need branches for support.
WHEN IT GOES WRONG: Invasive species can crowd out others, hog resources, and upset the balance. Unbalanced forests aren't resilient. Like frothy and overgrowing industries, the right match can set the whole forest ablaze. In the solar industry, we called this one Solyndra.
TYPICAL ORG MODELS:
Corporation: more-hierarchical, centralized decisions, risk-averse, profit- and/or growth-oriented (shareholder returns)
Startup: low hierarchy, varying centralization, risk-tolerant or risk-loving, growth- or progress-oriented
Small Businesses (e.g. mom & pop): non-hierarchical, centralized, risk-averse, predictability-oriented
Professional Services: (lawyers, consultants, etc.): less hierarchical, varying centralization, risk-tolerant, reputation- and/or earnings-oriented
HOW IT DRIVES IMPACT: Communities are the lifeblood of impact, because they understand their issues the best. These are the local residents, and the networks they form to help each other and improve their communities. A healthy forest needs animals to propagate seeds and fertilize the soil. Similarly, communities consume the products and services of businesses (and man the desks!), showing them what they want and need. If the local government isn't supporting their needs, they improve the soil and microbiome by electing new leaders to shift the direction of policy, improving things like education funding, skill-building, and economic development.
WHEN IT GOES WRONG: Some communities lose control of their ecologies. Just as invasive species can scare away animals and kill forests, non-native businesses (let's say luxury property developers, for example) can morph the business landscape, killing mom & pop stores on main street, and pricing out the local community.
TYPICAL ORG MODELS:
Community Associations: non-hierarchical, varying centralization, risk-tolerant, oriented to needs/public services
Mutual Aid/Volunteer Organizations: non-hierarchical, varying centralization, risk-tolerant, oriented to needs/public services
Applied Ecology
Now that we've introduced the hippie framework, let's talk about how to use it.
Humans have lived off of and shaped natural ecologies since prehistory. So we have millennia of experience diagnosing issues and tweaking ecosystems to yield what we want.
Let's say the private equity landscape has dried up this year in climate technology. Sounds like less rain! A forester would say it's time for more drought resistant plants (translation: businesses have to slow their spend and preserve capital, or they'll die). That's probably obvious (though you'd be surprised...). But what's nonintuitive is that soil quality is the key to water retention in nature. We need government institutions to provide more financing options to help climate innovators get through capital droughts. These can look like project debt and loan guarantees that the DOE's LPO provides, but it could also be a new category of SBIR grant for climate-focused companies.
Now let's say extreme weather is getting even worse in the American midwest. People need stronger homes! In nature, animals would nest in and around trees most helpful for the new condition, fertilizing the soil and propagating seeds. The necessary vegetation will grow to meet the new need. The community playbook is similar: appeal to local governments to pass new building codes, create weatherproofing funds to subsidize retrofit costs. If the incentives and codes get set up, new companies will spring up to fill the need. Want them to spring up faster? Fertilize the soil with better trade schools that have skill-building programs in tornado-proof construction.
Thinking through an ecological lens can give a fresh perspective on our hairiest problems, and create collaborative solution playbooks that help different organizations solve problems together.
Let's be clear: a lot of this collaboration already happens today! Businesses, government, financial institutions, advocates, talent networks, and communities collaborate all the time. But it's often inefficient, slow, and relationship-dependent. It's not systematic.
Why is that? Because the way we develop leaders today under-emphasizes these symbiotic and collaborative principles, and doesn't structure learning around systems thinking. Business schools do almost exclusively corporate case studies. Public Policy schools do almost all government case studies. Putting aside the fact that most people can't afford advanced degrees like these anyway, aspiring leaders should learn from the entire ecology of impact models.
This type of pedagogy would create leaders better equipped to:
Understand how to diagnose and treat systemic issues (whether within your company, industry, country, or community)
Understand what corner of the impact picture they fit into, personally, in order to have the most impact (based on the style of leadership needed in each org type--the degree of hierarchy, centralization, risk, motivating objective, etc.)
Build stronger solidarity and shared purpose with everyone else in the ecosystem, facilitating collaboration through mutual respect
Maybe that last one will avoid some wine getting thrown in your face.