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How companies can use power and partnerships to drive system change

Real change happens when business, policy and society move together. Here’s how leaders can move beyond isolated efforts and scale innovation for sustainable impact.

January 1, 2026

By Desirée Pacheco, Thomas J. Dean and Jacen Greene

A decade ago, many electric car makers struggled to compete in a world built for gasoline engines. Charging stations were scarce, battery costs were high, and government policies still favored traditional gas or diesel engines. Yet, by the end of 2025, 1 in 4 cars sold worldwide was an electric vehicle, with EVs forecast to represent 40% of the global car market by 2030. What’s more, several European countries have announced plans to phase out new internal combustion engines, with Norway on track to become the first country to go fully electric. EVs already outnumber fossil-fuel cars there. How did this change occur in such a relatively short period of time?

Real progress came only when automakers, battery manufacturers, energy providers and policymakers began working in tandem. Automakers created appealing new designs and adapted popular models to electric motors. Battery manufacturers scaled up production. Utility companies upgraded grids to meet rising demand. Governments introduced buyer incentives and invested in charging infrastructure. In response, consumer habits began to change. Simply designing a better car wasn’t enough — the entire transportation ecosystem had to evolve.

Our research, based on more than a decade of studying market dynamics and sustainability, confirms this pattern. Through in-depth interviews with transformational companies, we found that lasting solutions to social and environmental challenges rarely emerge from isolated actions. Instead, they develop through the coordination of multiple actors operating within interdependent systems.

Sustainable innovations offer much-needed answers to urgent global challenges, alongside compelling business opportunities. But their effective implementation often demands system-level change — something few leaders fully understand.

While technology can provide creative breakthroughs, its impact remains limited without collaboration across industries, governments and communities. To make a meaningful difference and unlock the full potential of innovations such as EVs, distributed energy generation, advanced batteries, carbon sequestration or regenerative agriculture, companies must go further: they must help reshape the broader systems in which they operate. That means shifting industry mindsets, incentives and structures to establish a new normal.

In this article, we describe how to influence key system stakeholders to scale sustainable innovations, which are essential for addressing global challenges today.

Understanding your stakeholders and how to influence them

To enable the dissemination of sustainable innovations within complex and multiactor systems, company leaders should be aware of two key factors:

  • the type of power that their company has and how to harness it.
  • the role of different stakeholders and how to target them.

Transforming a system often requires influencing key decision-makers — those who act as gatekeepers of technologies, solutions or policies. This includes securing the support of centralized stakeholders such as governments, competitors and suppliers, who individually control significant resources. For example, governments shape infrastructure and set the incentives or rules that define an industry, while suppliers may control access to materials critical for sustainable innovation.

Equally important are diffused stakeholders — end users and community members who, although lacking individual power, collectively determine whether innovations succeed. Unlike formal, resource-based relationships with centralized actors, interactions with diffused stakeholders rely more on social dynamics. The effectiveness of these relationships depends on trust, credibility and perceived social value, since they are informal in nature. Ultimately, these stakeholders are essential because they are the ones who adopt the products, services and business models that drive system change.

To scale their innovations, companies must learn to strategically influence both types of stakeholders. This begins with mapping the complex web of players who shape the market: centralized stakeholders such as policymakers, regulators, competitors, suppliers and NGOs, and diffused ones such as customers and community members. All of these groups are needed to create real change on a global scale.

Moreover, every company wanting to drive system change holds unique types of power that need to be considered in the process. And the way a firm engages with each stakeholder depends largely on the type of power it holds.

Power dynamics: legitimate, coercive and referent

There are five different types of power, as identified by social psychologists John French and Bertram Raven in their influential 1959 study, “The bases of social power.” For the purposes of this article, we will explore three of them:

  1. Legitimate power, the formal right to make demands, stems from a company’s social position and its standing with the public.
  1. Companies may also possess coercive power, which enables them to force compliance or punish others for noncompliance.

These two forms of power are often associated with organizational size, as both coercive and legitimate power tend to increase as a company grows.

  1. Firms may also exercise referent power, which is earned through respect and admiration, as others with shared values perceive the company to be more authentic.

Hence, a company’s size can determine its degree of legitimate or coercive power, while its perceived authenticity regarding sustainability can shape its referent power over others.

Larger companies, with greater legitimate and coercive power, are better positioned to influence centralized stakeholders, as their demands are more likely to be addressed given their control over key resources.

On the other hand, companies perceived as more authentic in their sustainability initiatives and messaging may be better positioned to influence diffused stakeholders, who place greater value on trust and social desirability.

We developed a framework for identifying strategies to influence stakeholders based on the size and perceived authenticity of innovators seeking system change. Each firm faces different constraints and opportunities, requiring it to tailor its approach to each stakeholder.

To make this framework memorable, we use the metaphor of animals in natural ecosystems to highlight the different roles companies can adopt when seeking transformational, system-level change.

A framework for identifying strategies to influence stakeholders

Desirée F. Pacheco

Professor of Entrepreneurship at IESE. She is an expert in sustainable business and strategies related to entrepreneurship, social movements and institutional change.

Thomas J. Dean

Tinberg Business for a Better World University Professor at Colorado State University. He is an expert in sustainable entrepreneurship and environmental strategy.

Jacen Greene

Co-founder and assistant director of the Homelessness Research and Action Collaborative at Portland State University. He is an expert in social entrepreneurship and community-based approaches to systemic challenges.