Are you a System Disruptor or a System Shifter? Two approaches to gender-smart investing
Like many groups of people working towards systemic change, the gender lens investing field can be divided into broad two camps: Disruptors and Shifters, or those who believe that the global finance system is so broken that it needs to be remade from the ground up, and those who believe that the best way to change the system is to work within it.
These two groups of players are often framed as being in opposition to one another, but the truth is that we need both kinds of people to achieve the kind of systemic transformation and mass movement of capital we want to see. We might even play both roles at different points in our careers. What’s more, we’re more likely to achieve the transformations we seek if we work together and build off each other’s efforts. (For another take on social change ecosystems, see this work by Deepa Iyer.)
Here’s how to identify where you stand on the Disruptor-Shifter continuum, tips on how to maximise your effectiveness, and some thoughts on how we can all work better together.
Signs you’re a Disruptor:
You think the VC system is broken. That we need new systems to back entrepreneurs and new financing models to meet the needs of diverse businesses. You’re okay with not being liked if it means making the change you want to see in the world.
Why we need you:
You’re imaginative. A risk-taker. You push the gender-smart investing community to set high standards for impact and to be more creative in our solutions.
As a Disruptor, you believe that the most powerful way to change the system is to remake it from the ground up. But funding your ideas will mean working in collaboration with people who aren’t as radical as you are. That means you will likely find yourself having to make difficult choices about what concessions you’re willing to make in order to get capital behind your ideas, while still maintaining the integrity of your theory of change.
How to be effective as a Disruptor:
Be clear about the problem you’re trying to solve and the tactics you’re using to move the needle. You don’t need to have a solution to every issue you’re advocating on, and sometimes you might take heightened positions in order to shift the center further towards your point of view. But you do need to be clear about what you want to achieve, and make sure your narrative matches your solutions. If you’ve got a brilliant idea, but your arguments for why the system is broken aren’t bulletproof, you’ll have a harder time bringing Shifters who want to support you over to your side.
How to be an ally to Disruptors:
If you’re a Shifter, look for ways your institutions can invest in, partner with, or otherwise support Disruptors’ work. If you can’t, due to stage, track record,, deal size, financial model, or some other mismatch or criteria, do you know someone else who could? Can you advocate for your institution to adapt its criteria so that you can invest in vehicles that are new, innovative, or otherwise aligned with your goals?
Signs you’re a Shifter:
You’re working within traditional finance institutions to get capital moved in ways that are more equitable, inclusive, and effective. You believe that changing the financial system necessitates changing the way the biggest players invest. You believe the perfect should not be the enemy of the good — with this much capital at play, any smart step forward is better than no movement at all.
Why we need you:
There is more than $300 trillion of capital in the global finance system, and if we want to change the way it’s invested, we can’t ignore the big players. You have the patience to work with people who don’t always agree with you, and may even be hostile to what you want to achieve. Institutional change may be slow, but given the challenges we’re facing as a planet right now, we both need to build up new actors and work within the existing ones.
Getting big institutions to change their values and practices takes time, and the changes you’re working towards won’t always take hold. Shifters can face a lot of resistance, and can find themselves marginalized by those who want to maintain the institution as is, while also getting hit by arrows from Disruptors who are working on a faster or more radical path. To survive, look for allies who can support you in your work, and who can continue carrying the torch in your institution if or when you move on to a new role.
How to be effective as a Shifter:
Use your power and influence to make sure that change within your organization isn’t just cosmetic, but goes to how capital is deployed, the incentives and rewards systems, and what gets resourced and from whose voice. Advocate to have someone placed on your investment committee who cares about gender and diversity, and have them educate the rest of the committee. Be strategic about building allies, about getting and amplifying proof points, and be rigorous in your approach so that no one can say you took an undue risk. Cultivate a combination of persistence and resilience: setbacks will happen, but you can’t let them take you down.
How you can be an ally to Shifters:
If you’re a Disruptor, acknowledge that Shifters are also working to change the global finance system, even if their methods of doing so are more incremental than yours. When big institutions and other conventional players make moves that significantly improve the financial landscape when it comes to gender, publicly celebrate the achievement. And when there’s room to do better, invite them into a conversation publicly or privately about how to make that happen, depending on which is more strategic. We don’t want to give the institutions that are pinkwashing a pass, but give the ones who are moving strategically bit by bit some credit.
Over to you…
I’d love to hear from you, where do you think you fall on the Disruptor-Shifter spectrum? Who are the players in your group that inspire you? Who are the players in the other group that you think are doing great work?
And how do you think you could work more powerfully together? We have no time to waste.