Master Thesis –Sustainable Business and Innovation The Systemic Impact of Systems Leadership Programs on Different Levels of Organisational Systems: A Case Study of Better Future Submitted by: Anke Keulen 5555345 Utrecht University [email protected] Supervisor: Brian Dermody [email protected] Organisation: Better Future B.V. Daan Modderman [email protected] Word count: 29,307 Date of submission: 13-10-2020 MSc. Thesis | Anke Keulen Acknowledgements For the completion of this master thesis, I would like to thank my supervisor, Brian Dermody, for the numerous hours of support, critical and in-depth feedback and for always being available for any questions I had during the entire process. Your knowledge and way of thinking taught me an incredible amount about the working and characteristics of complex systems, for which I am very grateful. Without these insights, my thesis would not have been what it is today. Moreover, I would like to thank Better Future for the opportunity to write my thesis about your leadership and change programs and for welcoming me in the team, even when we couldn’t see each other face to face. In particular, I would like to thank Daan Modderman for the great conversations, feedback and support during my internship and in the months afterwards. Your exceptional listening skills and inner calm always helped me to get grounded in difficult times. Lastly, I would like to thank all my 15 interviewees, without which this thesis would not have been possible. I appreciate that you shared your time and personal insights with to support me in completing this research. Also, thank you for being flexible regarding the time and location of my interviews due to the exceptional circumstances in March and April. 2 MSc. Thesis | Anke Keulen Abstract Due to the rising complexity of today’s globalised business environment, leaders need new mindsets, skills and capacities to meet the systemic nature of its global challenges. To equip leaders with these necessary capacities, the emergence of systems leadership programs, and more specifically Theory U, has been a promising development. Whereas Theory U is widely praised by organisational change and leadership practitioners, existing literature in these fields lacks critical assessments of the practical outcomes of Theory U, and specifically if it gives rise to systemic change required to meet global challenges. Hence, this research aimed to better understand the value of Theory U in practice by researching to what extent leadership programs inspired by Theory U give rise to systemic changes in organisational systems. To do so, this study applied a qualitative, abductive research design, in which insights from an empirical case (Better Future) were systemically combined with insights from existing theory on systems, leadership and organisational change. Results indicated that Theory U mostly affected people on an individual level, as well as the way those individuals interact with others both in their team and organisations as a whole. Moreover, it was observed that organisations set several steps towards achieving their new goals and purpose defined during the U-process. Despite these achievements, the program did not facilitate systemic change, because changes were mostly actor-focused, did not sufficiently address system structures and the changes implemented across different system levels were not aligned (enough) with each other and with the overall goal of the system. Overall, this research contributed to existing literature on systems and organisational change by being first of its kind to (1) research the impact of Theory U on all three organisational levels, (2) study how the impacts across these levels interact and how they affect the overall success of the change process, (3) to link these outcomes to systems theory and (4) provide an analytical framework to for doing so. Moreover, findings confirm the importance of deep systemic interventions, which authors often state as the most effective way to change systems, however also indicate that such interventions should be complemented by congruent changes in system structures, feedbacks and parameters. As this research could not encompass the complexity of facilitating systemic change, additional research is necessary to understand the complex dynamics of this endeavour. Regarding Theory U, additional guidelines are required for the processes on the right-side of the U. 3 MSc. Thesis | Anke Keulen Table of contents Acknowledgements ................................................................................................................... 2 Abstract ................................................................................................................................................... 3 1. Introduction ........................................................................................................................................ 5 2. Theoretical context ............................................................................................................................. 8 2.1. Systems theory ............................................................................................................................... 8 2.2. Achieving systems change in organisations ................................................................................ 11 3. Research methodology ..................................................................................................................... 22 3.1. Research design .......................................................................................................................... 22 3.2. Case selection .............................................................................................................................. 24 3.4. Operationalisation of concepts ................................................................................................... 30 3.5. Data Analysis .............................................................................................................................. 37 3.6. Measures taken to assure research quality ................................................................................. 41 4. Results ................................................................................................................................................ 44 4.1. Results of SQ1 ............................................................................................................................. 44 4.2. Results of SQ2 ............................................................................................................................. 62 5. Discussion .......................................................................................................................................... 77 5.1. Implications regarding Theory U ................................................................................................ 77 5.2. Implications for facilitating systemic change ............................................................................ 81 5.3. Additional practical implications for facilitating systemic organisational change .................... 86 5.4. Refection on research methods and limitations .......................................................................... 88 5.5. Suggestions for further research ................................................................................................. 91 6. Conclusion ......................................................................................................................................... 92 7. References ......................................................................................................................................... 94 Appendices: ......................................................................................................................................... 101 4 MSc. Thesis | Anke Keulen 1. Introduction Since the end of the 20th century, the organisational landscape has changed more rapidly than ever before (Hawkins, 2017). Societal trends such as globalisation, the digital and technological revolution, the increasing rate of change and growing pressure on social and environmental systems have increased the complexity of the global economy (Hawkins, 2017; Maak & Pless, 2009). To meet these challenges, an increasing number of scholars argue that there is a need for systemic (i.e. fundamental) change in the way our economy, and more specifically our organisations, operate (Senge, 1990; Scharmer, 2009a; Dreier, Nabarro & Nelson, 2019). However, while leaders and top executives increasingly recognise the need to embrace the rising complexity and unpredictability that underly the problems they face, they lack the necessary skills and cognitions required to solve them (Volini et al., 2019; Hutchins & Long, 2020). An emerging approach aimed to equip organisations and leaders with the skills and mindset to deal with such complex interconnected challenges is the concept of systems leadership. Systems leadership is defined as “a set of skills and capacities that any individual or organisation can use to catalyse, enable and support the process of systems-level change” (Dreier, Nabarro & Nelson, 2019, p. 4). In other words, it equips leaders to facilitate a fundamental change, which affects how the whole system functions (Abercrombie, Harries & Wharton, 2015; Polhill et al., 2016). As the name indicates, systems leadership is an approach to leadership based