By: Elizabeth Fustos and Amy Ostrander, Chemonics
The blog highlights some important shifts that are foundational when applying a systems thinking approach. First and maybe most important is developing a solid understanding of why the system and individual actors work/behave the way they do. In more traditional approaches, there is an assumption that actors lack capacity or just 'do not know better,' but in reality, local actors and systems evolve to fit the local contexts. A second shift that is critical is developing insights into why an actor, and eventually a whole industry, would see value in changing the way they are currently working. Any durable shift has to come from the perspective of the local system and actors. Another shift that is not expressly included in the blog, but is critical, is the need for aligned change in interconnected systems. For example, it was crucial that ARDS understand the contexts in the financial services market system and equipment market system in relation to other firms and the overall system adapting to European markets that are more stringent in terms of grades and standards. Helping one firm access equipment has to be done with the intention of easing the risks/smoothing the path for other firms to be able to do the same. The new AGRO program is designed to build off of its predecessor’s lessons from both failures and successes.
Focusing Project Design on MSD
The facilitative, systems approach required for market systems development (MSD) is not always intuitive to project staff. Those accustomed to working on traditional development programming have focused on training for beneficiaries, and those coming from the private sector have focused on one business, not an entire system. That challenge became clear when a Chemonics-led team created the first work plan for the USAID Agriculture and Rural Development Support project (ARDS) in Ukraine in 2016. Despite feeling that the project team had a good grounding in the theory of the market systems approach, the work plan quickly filled with training and workshops. Chief of Party Patrick Rader and Deputy Chief of Party Kseniya Sydorkina decided to pause and develop a tool that would help the entire team think through market systems and create a more flexible plan.
The result was the MSD Analysis Framework, which we include with this blog post to promote greater sharing of practical tools for MSD implementation. The tool includes three straightforward stages as a framework to walk a team through the analysis of a market system: a) Background (identify opportunities and system constraints); b) Analysis Framework (identify needs and gaps in the system); and c) Strategic Framework (identify behaviors and processes that need to change, key outcomes, and solutions and interventions). In introducing the team to the tool to guide data and analysis driven implementation, Rader and Sydorkina developed four main principles to follow when using it.
1. Focus on incentives
Through the tool, Rader and Sydorkina coached the team to focus on understanding behaviors as the core of their analysis: What are the incentives and motivations behind the behaviors of the many actors involved? This is where the team had their “aha moment.” They discussed how they could approach getting key actors to do something different, and most importantly, keep doing it. They planned for long-term behavior change for sustainability from the very first day. By identifying and targeting incentives to encourage the crucial actions needed to improve the system, the team would ensure that the new, beneficial behavior remains a part of the system long after the project is over.
2. Involve the project team
For project success, the entire team needs to understand, buy into, and execute the strategy. This is particularly true in market systems work, where staff are expected to identify what is working and what is not and help redirect as needed. It is critical to carry out the early analysis using the MSD Analysis Framework collaboratively with the project team. It is an opportunity to encourage them to question themselves and their understanding of how single businesses or value chains function within a wider system, to think through behaviors and incentives together to get a clearer picture of reality. Done well, this step can foster deeper understanding of the work ahead and greater buy-in across the team.
3. Establish adaptive management systems
Using the information gathered through the tool, the ARDS team created deliverables and key milestones. They met every quarter to review what they’d accomplished during the previous quarter, identify changes needed, and plan for the next quarter. This adaptive management approach enabled them to lead with data, responding to what they saw happening in the system, and not simply following the original plan exactly as they’d laid it out. They consistently returned to analyzing behaviors and incentives that can drive sustainable change.
4. Measure behaviors and adapt
The final key was to align monitoring and evaluation planning with this tool, measuring not just immediate outputs and outcomes, but also changes in behaviors, adapting and updating approaches as the system evolved. With data on hand, the team could see what improved and what did not budge, and they could adjust their approaches and support accordingly.
The Pay-Off: Results in Action
Using this approach, ARDS successfully fostered and supported long-term behavior change in key market actors. In one example, Triada, a berry processor that had previously sold only to Russia saw its market close during hostilities between the countries in 2014. The ARDS team co-invested with Triada to purchase processing equipment — doubling its processing capacity and shifting its focus to higher-quality products for the European market. Triada dramatically increased its procurement, which supports small rural growers, and now invest in ensuring product quality to meet the higher international standards. The market incentive will ensure that these practices continue long after ARDS has closed.
Transferring Knowledge & Adapting the Tool
As ARDS nears close-out, the MSD Analysis Framework has also helped with institutional memory. The team can look back at their initial analysis because they documented it and can see what they’ve tried already and what has led them to where they are now. This can be especially important for transitions to new projects and developing new proposals and work plans.
In November 2019, Chemonics started implementing the USAID Agriculture Growing Rural Opportunities (AGRO) activity, which will build on various elements of the ARDS program and explore new areas of market systems programming in eastern and southern Ukraine. In designing an initial rapid assessment to inform the value chain and geographic focus for the new activity, the team decided to revisit the MSD Analysis Framework from ARDS rather than start from scratch. They reviewed the completed tools and developed a format for the assessment and report that similarly identified constraints and opportunities, priority outcomes, desired changes in behaviors, and potential solutions and interventions for each potential value chain. The team’s interview questions, survey design, and discussions with activity staff and stakeholders focused on gathering information to inform system-level thinking from the beginning.
Given AGRO’s mandate to support additional value chains beyond ARDS’ focus on dairy, meat, fruits, and vegetables, the design of this assessment was flexible enough to allow the AGRO team to verify the ARDS market systems solutions that worked or the components that needed adapting, with the goal of scaling up to new geographies or across value chains. In addition, the assessment’s flexibility allowed the team to start the process of identifying constraints, opportunities, behaviors, and potential solutions for new value chains.
Sharing and Improving
We’re sharing an example of a completed analysis framework tool used under ARDS for the fruit and vegetables value chains. The MSD Analysis Framework is easy to adapt for any context and program by choosing a value chain or system issue to focus on and then inserting the most relevant actors in each section. ARDS, for example, used the framework tool to understand the dairy and fruits and vegetables value chains, their supporting functions, as well as agri-food controls.
Chemonics is sharing this tool to build the collective toolkit for MSD, and kick-off more tool sharing throughout the course of the upcoming Market Systems Symposium. We hope that your teams find this tool to be a useful way to make market systems theories work in practice, we are excited to see it adapted for other programs. Chemonics looks forward to using this tool on other programs around the world, adapting and improving it as we go. What tools are your teams using to put theory into practice and how can we foster a culture of sharing and collaboration to ensure stronger market systems across the globe?
The MSDHub Blog Series is authored by respected implementers and donors of market systems projects globally.