The New Strategic Sin: Innovating Without Seeing the System
I’m Camila Rojas, a Value Innovation Strategist at Sustainabl, and let me be straightforward: most companies are not failing due to a lack of creativity. They are failing due to myopia. They continue to "innovate" as if the world were a sum of isolated parts, while the real market operates as an interconnected system where every move pushes other pieces.
The evidence is uncomfortable and well-known. Plastics: convenience and low cost, at the expense of persistent pollution and microplastics entering the food chain. Fracking: cheaper energy, in exchange for impacts on water, air, and health. Credit default swaps: risk coverage, at the cost of playing a catalytic role in the 2008 financial crisis. Three innovations celebrated for their immediate “value” that, viewed retrospectively, were cost transfers to other actors in the system: ecosystems, communities, regulators, future generations. That is not superior strategy; it is deferred debt.
In their Harvard Business Review article (September-October 2025), Tima Bansal and Julian Birkinshaw hit the mark: in a world of networks (people, products, finance, data), thinking in systems surpasses innovation methodologies that focus on leap (“breakthrough”) or immediate user (“design thinking”) when the problem is complex, interdependent, and has side effects. This thesis matters for a practical reason: Today’s competitive advantage does not lie in the product; it lies in the consequences.
When the Industry Copies Features, the System Pays the Bill
The typical dynamics of a red ocean are no longer just price vs. quality. It’s a race of “capabilities” where everyone adds the same:
- more personalization
- more speed
- more automation
- more “AI everywhere”
- more channels, more SKUs, more promises
The result is predictable: costs rise, complexity rises, differentiation falls. And a consequence arises that executive committees underestimate: the externality. What isn’t seen in the P&L today returns tomorrow as regulatory, reputational, operational, or supply chain friction.
Bansal and Birkinshaw are not calling for “more responsible innovation” as a slogan. They are pushing for something more dangerous to the status quo: changing the unit of analysis. Stopping the optimization of the object (product/service) and starting to design the behavior of the system: flows, relationships, incentives, frictions. This shift renders feature comparisons irrelevant, because competition is rarely designed to play there.
Deconstructing Value: Where Real Gains Are Made
If I translate their proposal into the brutal language of value strategy, systemic thinking is not a philosophy; it is a tool for redesigning the value curve of an industry. The key is to stop competing on standard variables and shift the focus toward variables that the “non-customer” in the market values, because they alleviate burden, risk, or effort.
Eliminate: What’s currently marketed as “value” but is systemic noise
Reduce: Hidden costs that the customer pays despite not showing in your proposal
Increase: Attributes that become advantages in interconnected markets
Create: The move that leaves the competition discussing the past
Here lies the disruptive point of the article: in complex systems, innovation does not need to be a “grand launch.” Many times, the one who finds the right leverage point and moves it precisely wins.
The Operational Framework That Works in the Boardroom
Bansal and Birkinshaw suggest a four-movement approach that, when executed well, avoids the classic mistake of corporate innovation: falling in love with the artifact and forgetting the domino effect.
1. Define a desired future state: not a list of projects but a condition of the system (more resilience, less waste, more inclusion, less risk).
2. Reframe the problem to resonate with diverse actors: when the problem is formulated for a single department, the solution is born defective.
3. Focus on flows and relationships: where to add friction to slow down harmful actions and where to remove it to accelerate valuable ones.
4. Apply nudges, experiment collaboratively, and iterate: small intervention, rapid learning, scaling with evidence.
This method has immediate strategic merit: it changes the type of investment. Instead of betting everything on a “big transformation,” it forces the construction of a portfolio of experiments with systemic impact and controlled cost.
The Corporate Blind Spot: Confusing “Systemic Thinking” with “Consulting Project”
I’ve seen too many organizations turn a potent approach into bureaucracy: huge maps, endless workshops, transversal committees that produce impeccable presentations and zero changes on the ground.
Systemic thinking is not drawing arrows. It is redesigning incentives and frictions so the system behaves differently. And that is uncomfortable because it requires touching the untouchable: metrics, decision governance, commercial agreements, chain design, cost structure.
The opportunity lies in what the industry doesn’t want to do: simplify. Instead of adding layers to “cover cases,” trimming complexity to promote adoption and scale impact. New demand emerges not from those already comparing providers, but from those left out due to cost, risk, time, or operational incapacity.
The Strategic Shift: From Selling Solutions to Designing Functional Systems
The article cites cases like Maple Leaf Foods, Co-operators Insurance, and CSA Group as examples of organizations realigning their models towards more sustainable outcomes through this logic. Beyond the name, the pattern remains the same: they stop competing on superficial attributes and focus on the health of the system they inhabit.
That shift separates leaders from imitators. Imitators add features. Leaders eliminate what doesn’t matter, reduce friction where it destroys value, and create conditions for the market to function better. This is a more sophisticated —and more profitable— way to become irrelevant to the competition.
Conclusion: Leadership is Proven on the Ground, Not in PowerPoint
Systemic thinking is not an intellectual fad; it is a strategic response to a world where side effects are no longer secondary. The C-Level that continues to burn capital to match a competitor’s offering will end up trapped in an inflated portfolio, fragile margins, and rising risks. Real leadership involves validating on the ground, with observable commitments and behaviors, what is worthwhile to eliminate and simplify, to create your own demand rather than fight for crumbs in a saturated market.
