Notes on-Systems Approaches to Managing

Change: Part 3 Viable Systems Model (VSM)

A Practical GuideEds. – Martin Reynolds & Sue Holwell

The Viable System ModelPatrick Hoverstadt – Chapter 3

Abstract on Paper

• Conceptual model built on laws of what is and isn’t ‘viable’

• What enables an organization to adapt and survive?

• Three area of use 1. Analysis – overlay against an

organization2. Diagnostic framework 3. Organisational design – the

blank canvas

• Model supports autonomy and adaptability

• Foundation of model –’variety’ • It needs a fractal (recursive) layered

structure for it to embrace ‘variety’

3.1.1 – What Is VSM and What’s It for?

• Built on the principles of cybernetics (communication and controls systems)

• To address organisational viability – that is the capacity to exist and survive during turbulent external environments

• Three areas it is used 1. Diagnosis – using the VSM

perspective of an organisation, compare to actual and note differences

2. Design – a clear sheet paper or an existing area

3. Seeking self-knowledge “Every good regulator of a system must be a model of that system”

3.1.2 –Overview of

the VSM model

Graphical model with five systems connected together in specific way. Not driven by silos of activity but rather than ‘things’.

S 1. Operational activities of the organization that provide value to external environment

S 2. Those protocols that coordinate operations thus limiting any conflicts

S 3. Resource delivery to ensure optimum performance

S 4. Management charged with understanding the existing environment and desired future; planning change for the purpose of development

S 5. Management activities that ensure systemic behaviours balancing the relationship between 3 & 4; governance and power

Environment is seen as ‘amorphous blob’

Static representation of VSM

3.1.3 Key Concepts of VSMThe five system model is relatively simple – how does it apply to a large organisation?

• Fractal structure, each level of the model has a subset of the level above with same systemic and structural elements

• Sub-sets communicate freely between the systems

3.1.3 – Key Concepts of VSM (cont.)Ashby’s Law of Requisite Variety says “only variety can absorb variety” and that variety is indeed a measure of complexity.

If the environment requires 6 products / services and the organisation delivers all six – then “requisite variety” exists. If it does not then it doesn’t.

VSM tension exists between autonomy and cohesion as well as current delivery and future state.

Two concepts in the system –wholeness and emergence.

Too much cohesion and too little autonomy leads to a loss of ‘wholeness’.

Too much autonomy and all cohesion leads to a loss of ‘wholeness’

To conclude Ashby’s law of Requisite

Variety

3.2 The Model: Underpinning Concepts, Structure and Use3.2.1 – Autonomy Versus Control

3.2.1.1 – The Horns of the Dilemma

The apparent unending dilemma of organisational structure.

The rigidity of a hierarchy and central control or the fluidity of open, level structures. Both are vehemently defended and both have detractors.

The arguments are not clear cut – but they are real, emotional and a manifestation of the dilemma

3.2.1.2 – The Complexity Equation

Why is Taylorism demonized? What has changed over the last 116 years that has made this concept of management so disconnected from today’s thinking?

Complexity and the search for equilibrium between organisational complexity and the complexity of the environment.

Ford offered one colour to an unsophisticated market at a price that broke down barriers. In time that market matured to want greater variety, the structure of delivery had to change. GM created brand division but it was eventually Toyota’s approach to complexity through TPS. In all instances the response to complexity was greater autonomy.

“Reconciling what is a fundamental set of imbalances is what the VSM is all about” (p95)

External variety is theoretically infinite s organisations meet that variety with simplifications like customer segmentation, task are divided into divisions.

“Only variety can absorb variety’ – Ashby’s Law of Requisite Variety

3.2.1.3 –Recognising Autonomy • Whether we like it or not people do have autonomy to act. We can prescribe authority but there is normally very little that can be done if those resist.

• If prisoners chose to defy guards then order will breakdown. If subordinates act in a way that is deemed contrary to management – and if the action is unseen then those actions will continue.

• Ashby’s Law – if there is a mismatch between operational complexity and the endorsed process – spare decision making capacity will be exercised

3.2.1.4 – The Resolution of the Dilemma

Autonomy and Control

• VSM assumes different levels of the organisation are about different facets of the business. Therefore what exists is a management structure at each level that holds no power over another level since all levels are equally important. VSM is about competencies to act not to dominate – it is about the management of complexity as each manager is equally competent to manage their part of the organisation.

• Hierarchy is about power and dominance, that the person above is more competent than the person below.

3.2.1 The Structure of Value Creation: System 1

3.2.2.1 – Primary and Support Activities

Organisations exist to address complexity

In VSM how we distinguish between ‘primary’ and ‘support’ activity is a vital to understanding organisational identity.

Primary activities – revenue generating aspects of a business. It is a statement of purpose not a measure of importance

Support activities – activities that incur costs but facilitate the primary activity. It is not the means to denigrate the activity but to amplify its role in the process

3.2.2.2 Organisation Structure and Complexity DriversThe Four Principal Drivers of complexity

1. Technology – about the nature of the activity – plumbing is a different skill to plastering

2. Geography – location of primary activity

3. Customers – matching the required specialist skills to the customer needs

4. Time – the ability to deliver the same primary activity over an extended period of time beyond the capabilities of any individual or team

When analysing any primary activity it is about synthesising the complexity into lower levels. Result is a layered perspective of different strata which is the ‘recursive’ structure

Organisation

Primary

Technology Geography Customers Time

System 1

3.2.2.3 The Impact of Complexity Drivers• Primary activities are broken down into sub-activities according to ONE of the complexity drivers

• Sequencing is critical to the eventual outcome and performance of the organisation

• In this example – Road Agency controls Maintenance and Construction. Feasible for resources then to be coordinated under this model improving resource efficiencies since maintenance may be seasonal.

System 1

3.2.2.3 The Impact of Complexity Drivers (cont.)

• In Option 2 – such pooling of resources would not be possible since Maintenance and Construction are both managed at a local level.

• Implications for operations and management

• The benefit of looking at organisational complexity through the lens of the drivers is that it identifies key decision processes and the most effective use of resources

System 1

3.2.2.3 The Impact of Complexity Drivers (cont.)

As an example of changing the order by which complexity is ‘unfolded’.

Early part of last century manufacturing processes were established in silos based on specialisation and functions. These departments or ‘shops’, it was believed, lead to improvements in quality and efficiency.

In the 1950’s -60’s ‘cellular manufacturing’ was being implemented where teams were established who could deliver all facets of the production process.

The resultant improvements in all aspects of performance measures was staggering. The following Average changes in performance were calculated by LBS and 10 engineering companies

• Reduction in ‘Work in Progress’ 62%

• Reduction in stocks 42%

• Reduction in throughput times 70%

• Reduction in delayed orders 82%

• Increase in sales 0%

• Increase in output per employee 33%

System 1

3.2.2.4 Unpacking Complexity: Diagnosis and design• The goal of organisational restructuring often stem from a desire to change the order of complexity

• Failure of restructuring stems from activity without clear rationale.

• VSM useful for understanding the pros and cons of restructuring decisions

• Mapping the organisational complexity to the environments complexity is not a static process.

• When bring about change we create opportunity which is also dangerous. Change to meet an unmet need in the environment we enlarge the organisation and shifting its boundary and shifting its exposure.

• How well does each option address the complexity of the environment? Have we segmented customers correctly?

• Role of today in defining the future we create – needs to be a conscious process otherwise we will simply be driven by history

System 1

3.2.3 Maintaining Balance Between Primary Activities: System 23.2.3.1 Identifying Needs

When autonomy is in the system so coordination becomes essential.

System 2 - desire to prevent inter-operation disruption

The need for coordination is correlated with:

1. The number of operational situations

2. Their interdependence with each other

3. Their shared affect upon the environment

The symptoms of coordination problems are:

1. Oscillations in performance

2. Low level and ongoing chaos

3. Repetition and recurrence of problems

4. A rise in interdepartmental disputes

What may be seen as low level issues can quickly escalate. Organisational change can be derailed – to avoid this set the coordination needs to be seen as a ‘critical success factor’.

3.2.3.2 Coordination Mechanisms

• One of the biggest reasons for

failure of change relates to a lack of

coordination or an absence of

mechanisms to coordinate.

• Not knowing what different

activities are happening across

boundaries; assuming that the

language one area uses means

exactly what it does in another

area.

• When things are not working –

we problem solve but very often

ignore the issues of coordination. System 2

3.2.3.3 System 2 and the Design of Structure

• Cohesion dilemma. Coordination mechanisms

are a sublimation of autonomy at the level of

strategy. Managers sacrifice autonomy in favour

of a reduction in infighting, conflict resolution

and reactive management.

• Coordination is about minimising the levels of

complexity. Simplify the language and optimise

the way value is created.

System 2 activity is a critical design feature – it

should be used as the means to make a choice

between competing strategies System 2

3.2.4 Managing Delivery: System 33.2.4.1 Line Management• To achieve the goal of creating a ‘cohesive coherent organisation’ the underlying goals revolve around striving to deliver synergy.

• The ‘Resource for Performance Equation’ states: Resource ‘X’ is transformed into Performance ‘Y’ through a negotiated agreement between Management and Subsystem ‘n’.

• This is an agreement NOT an Imposition

• Traditional fixed budgetary and planning has undesirable consequences in behaviours including ‘creative’ accounting and political ‘gaming’.

• ‘Beyond Budgeting Round Table’ devised system of autonomy with a recursive system. States Management at any level is responsible for a number of subsystems that operate in an ‘agreed framework – System 2 which to an agreement on resources and performance – System 3.

• Complying with what I see as organisational anchors like a mission statement, autonomy leads to a combination of management and self-management

3.2.4.2 Common Failures in the Performance Management Structure• Performance management can be a thorny issue it can also, if done without thought or a care, be a destructive process.

• Problem 1. Performance management that misses out a level(s) of management so not all managers are able to discern their own level of performance.

• Problem 2. The splitting of resource allocation processes from performance management objectives. This leads to performance goals being increased at the same time resources static. Two situations are ‘over or under resourced both of which create waste.

• Problem 3. Performance measures are built not as a feedback (learning) system. So sales goals may not be directly in the domain of a sales person if marketing is not creating the innovative culture.

• Attribution is sloppy so the performance goals ascribed to one department should be for another. A systemic approach to performance management means results are driven out of multiple areas not just one. No hierarchy but a dynamic model of inflection and resistance points.

• Control dilemma - performance measures tend to be quantitative whilst monitoring qualitative. Monitor what is most useful and relevant to the resource agreement, the reality of the operations NOT on beating up others

System 3

3.3.4.2 (Cont.)

Four Good Monitoring Requirements.

1) It need to be Sporadic – not heavy handed of seen to be micro managing

2) It needs to be Unannounced –reduces the build up ahead of an inspection. Stops any window dressing and better chance of seeing reality

3) It needs to skip a level of management – go to the grass routes to avoid management hiding, misdirecting any inspection away from unsavory activities

4) It needs to be in-depth – no point being superficial as this will fail to uncover issues

System 3

3.2.5 System 4 - Outside the Future – managing development

3.2.5.1 Systemic Function• Goal – to ensure that the organisation can engage with its environment in a healthy and meaningful way through the value exchange.

• Organisations that do not have a strong System 4 suffer with viability issues. They cannot engage with the future – either by predicting it, preparing for it or creating it.

• Five ways organisations can bring the future and environment fit together :

1) Scanning external environment PEST(LE)

2) Managing non-operational external communications

3) Creating and living an innovation culture

4) Identifying and instigating change management

5) Constant Business Model Evaluation and visualisation

3.2.5.1 Systemic Function (Cont.)

System 4: Failure is endemic.

• Since its inception the S&P500 85% of its original businesses –businesses failed to survive for 49 years!

• The median life expectancy of European companies is now 12.5 Years- it used to be 60 Years!

• Failure to adapt is weakening companies and created vulnerability in the economic model.

• Passive issues of weak System 4 businesses include an inability to spot change in the environment. It creeps up on them

• Active issues of weak System 4 businesses include failure to adapt, to innovate and to change.

System 4

3.2.5.1 Systemic Function (Cont.)System 4: Symptoms of Failure

Complexity is often a function of size but the bigger the business the greater the fallout of collapse.

Common symptoms of a weak System 4 business:

• The creation of pointless products – no market for them

• Creating markets but supplying products

• Organisational rigidity s a response to a changing market

• An inability to embrace technology or change with it

• Continuing with the same without further development

System 4

3.2.5.2 Managing Change

80% of all change fails.

According to Hoverstadt the primary reason is when change crosses boundaries. Homogenous change, whole organisational change falls apart because different regions of the business are perceptively different to change. This holistic change becomes heterogenous change functional at multiple speeds, experiencing multiple ways of resisting which creates all sorts of complexity. This drives the desire to return to old ways. System 4

3.2.5.2 Managing Change (Cont.)In VSM terms this is a failure of coordination across boundaries and since ‘coordination’ is one of the three most common pathological archetypes – change rarely sticks.

To succeed use the Mosaic approach:

• Break change down into ‘discrete do-able’ chunks and create a sequential plan of actions. This approach helps concentrate change management resources at the points of greatest boundary disputes and subsequent frictions.

• Identify areas where ‘structural redundancy’ can happen – creates the spare capacity needed to bring momentum into the change process. The bigger the change the greater the need for capacity in all resources or an increase in requisite variety. Too little variety and it will not be possible to bring in the complexity (Ashby’s Rule).

3.2.5.2 Managing Change (Cont.) Complete Organisational

Analysis using VSM

Define the existing state – set out the desired

state

Identify the changes directly related to each

area

What are the possible boundary issues –

political and operational

List out the subsystems , their interconnectedness

and possible other boundary issues

Process to bring in Mosaic change

• VSM analysis of the organisation

• Understand existing state and desired future state

• Record details of where the organisation directly face change

• Consider all the relevant boundary issues

• VSM Give you all the subsystems – now and in the future

System 4

3.2.5.2 Managing Change (Cont.)Following systemic overview – where to start?

Rule – all change has to be practical and worthwhile. The assessment of what this is can be difficult.

Practical must mean that resources exist and therefore capacity for change is feasible.

The practicality factors include:

Group cohesion

Attitude and experience towards change

Change skills

The strength of leadership

The complexity of change in respect to boundaries

Management of resources needed to make the change happen

Is the change worthwhile?

Does it have intrinsic value?

What is the ability of the change to create ‘structural redundancy’?

Will it clear a pathway for ongoing change?

Mosaic model reduces the likelihood of managers becoming too stretched but it is not a failsafe system.

The model requires a ‘critical path’ so that the cause and effect of each change can be preplanned. The

systems view of the organisation helps identify this.

The primary goal is the creation of ‘structural redundancy’ – having free resources gives you a greater

chance of maintaining momentum, handling boundary issues and to be more tightly focused.

System 4

3.2.6 Strategic Balance 3.2.6.1 The Traditional Strategy Model

Vision Mission Strategy TargetsPerformance

Measures

The three features of traditional strategic planning:

1. Linear

2. Deterministic

3. Hierarchical

Each stage makes reference to the stage prior to it. This approach suffered with high failure rates. 90% of all strategic plans never get implemented.

Fig 3.1 – Traditional model – strategy and performance

3.2.6.1 The Traditional Strategy Model (Cont.)Roots of failure for the traditional model for strategy development

• Deterministic approach –embedded assumption that the environment of today is the same as the environment of tomorrow. Our visions for our business assume this to be so when in reality we know it is not. Our environment is inherently unstable, dynamic and a force upon our organisations. Reviews in business normally take far too long and are unresponsive to the needs of today.

3.2.6.1 The Traditional Strategy Model (Cont.)Roots of failure for the traditional model for strategy development

• Linearity has embedded performance measures which are there to measure the success of delivering output relevant to the strategy NOT the success of the choices the business is making as a result of the strategy. Therefore we are measuring how well we are doing as managers, not the core benefits our decisions bring.

3.2.6.1 The Traditional Strategy Model (Cont.)Roots of failure for the traditional model for strategy development

• Hierarchies are designed to be unstable –individuals and small teams shifting large organisations in Herculean mode. Centralisation and power have benefits in decision making but consequences for implementation. There exists an inverse correlation between ‘involvement and rejection’ – the fewer people involved the greater the chance of resistance.

3.2.6.2 Strategy as an Emergent Property of StructureWhich came first – strategy or structure? The relationship is complex and dynamic since structure has a profound effect upon strategy but strategy often will determine the structure.

• Organisations need to be intelligent and listening systems. They should be connected to their environments but they can only hear what the are structured to hear. Try complaining to an organisation that does not have a complaints department. The ears on the end of the line have no where to go to escalate or solve. Organisations need to define the task of listening to the environment through its structure.

• This is the root of organic growth and not change through goal setting. It is evolutionary – organisations grow into themselves, shaped by their environment.

• The risk is this closes minds rather than opens them, ‘we have always behaved like this it’s natural’. To avoid this complacency and closed mind set out to create deliberate actions so as to listen to the environment in a diverse way.

3.2.6.3 Strategic Conversations

• Good strategy is about balance between ‘What is’ and ‘What if’. It is better to anticipate the need for change than to experience enforced change. Seeing the change is about identifying the gap between the current and desired future state is the catalyst for the process of ‘strategic decision making’.

• Gap closing – the job of ‘delivery management’ whilst gap opening is the job of ‘development management’.

• The conversations that are needed across multiple functional areas and in doing so cross into different Systems, crossing boundaries leading to complexity.

3.2.6.4 Getting the Balance• Optimal outcome – to have an organisation that can operate efficiently at what it does today but have the capacity for change.

• To achieve this requires balance between two themes of management. Management designed to optimise today’s operations and management designed to look for a new future. Both styles of management very different and requiring different activities, thinking and skills.

• “Without a short term, there is no long term” and of course vice versa.

3.2.7 Identity and Governance: System 5• In the VSM we need to consider not only the idea of a system modelled so as to have an identity ascribed to it but also how the system creates, maintains and the recreates its own identity.

• Two perspectives that look inwards from the environment and outward to the modeller.

• The two have to be aligned at some point otherwise confusion will ensue. An organisation’s identity isn’t some piece of marketing speak (mission statement), not something imposed by a hierarchy – it is this fusion of the observer’s eye and the actions, manifestations and behaviours that make up the organisation’s identity.

System 5

3.2.7.1 Defining Identity – Part 1First way is through the system’s purpose – “a systems to do x by means of y for the purpose of z”.

Using the mnemonic TASCOI as suggested by Prof Espejo of Lincoln, University.

• T = Transformation, the What is to What works

• A = Actors, change agents, stakeholders carrying out he transformation

• S = Suppliers to the transformation process

• C = Customers, those who benefit from the transformed product

• O = Owners, those responsible for ensuring it happens

• I = Interveners, those with an interest in the process

Two areas of use:

i. Designing a new system

ii. Problem solving – the gap between “What is and What if”

Therefore in problem solving the perception of the person who wants the problem solved and the systems purpose are critically important.

System 5

3.2.7.1 Defining Identity – Part 2Second way to define a system is through its relationships which is covered in the phrase “structural coupling”.

• An organisation by its very nature engages with its environment, at which point it is establishing a value exchange of some description which then effects what the organisation goes on to do that is different from what it has done.

• The main benefit is we model the organisation from multiple viewpoints ‘at the same time’. Each relationship will have a different set of expectations, value and meaning. You get a far more granular model and therefore more depth.

• Definition via ‘structural coupling’ is to define the system literally. We are defining the system by its boundary and since a boundary infers a difference between what is inside and what is outside, what is inside has a different identity. Every time we create a boundary through the creation of a team, department or business unit we are changing the organisational structure. So identity is intrinsic to structure.

• Confusion over boundaries and therefore identity is rife in organisations as complexity of the environment increases unintended exchanges which blurs the identity.

• The hardest job when analysing an organisation maybe where you place that boundary.

System 5

3.2.7.2 Systemic Function of System 5

Three distinct functions all interconnected:

i. Governance role – the system is able to function as a system, can manage itself and meet the criteria of viability and acting in the most appropriate manner when it cannot.

ii. To create, maintain and recreate the identity of the system

iii. Maintain and keep in focus its place as a system within the wider (meta) system in which it is a part.

Much of this is intangible work, it sits in the ether of an organisation and not easy then to ascribe roles to different levels or functions. At the board level it could be the role of the Chairman to maintain balanced debate and activity between systems 3 and 4?

Staying with System 5 as a board then there are three roles:

1) The governance connection – maintaining balance between S3 and S4

2) The governance connection at lower levels of recursion – to identify and listen for alarm bells that can be heard and acted upon. To break through recursivity and responding to both negative (threat) or positive (opportunity) events quickly

3) The connection to the wider system in which it is embedded. Getting out there at engaging with your peers.

Chairman and CEO function embrace these aspects – at board meetings encouraging open debate and honest feedback; by the establishment of the management and encouragement of whistleblowing activities that see responsive results from internal concerns; and by activities such as peer networking and engagement in industry bodies that help shape the identity of the embedded system

System 5

3.2.7.3 Symptoms of Failure and Pathologies - 1If governance fails – that is direction and control goes – then the whole system crashes.

Three areas of governance that cause tensions and a need for balance; management of the day with needs of the future and embedded in this, the metrics and monitoring functions.

If any facet of these are under resourced or missing the organisation will likely fail.

The reinforcing feedback loop shifts from a positive to negative state, every action and effect produces one more level of decay. This is known as a “Death Spiral” and systematically this start with weak, poor or missing governance.

System 5

3.2.7.3 Symptoms of Failure and Pathologies - 2A chain reaction of destruction

• Poor governance – change in the complexity of the environment –organisational response – failure to prepare – erratic behaviours - levels of stability in the unit – management intervention (control dilemma) –Organisational response capability (head in sand or bunker mentality) –operational response (inadequate) - status of organisation – mindset of management – external intervention

• At this point organisation will be in melt down.

• Banking crisis 2008/09 was a ‘death spiral’. Decline in affordability of home ownership, mispriced assets, poor regulatory control at banks, incentivised short term profit seeking behaviours, all trading books facing the same way, liquidity levels, asset valuations misrepresented

• When governance is weak because it is internal looking this situation is probably ticking away in the background unaware of the changing external environment.

• Failure in any one part of the organisation can lead to a catastrophic event, the spiral tightens in time frames to react and the systemic nature of the crisis is self-reinforcing.

System 5

3.3 Reflection3.3.1 Model or Methodology• VSM is not a methodology, it is not a process or route map to investigation. VSM is a model of organisational workings and as such has ben criticised for being hard to implement as a tool.

• VSM exists to help organisations acquire control over their environments so as to be viable and not to become extinct

• Part of its charm is its ability to be used in different ways. These include as an analytical tool to overlay against an organization as it is vs. a normative model so as to spot the differences and solve for the answers. As a diagnostic framework for thinking about systemic connections and as a tool to help an organisation design itself. It is though hard because it offers no natural starting place.

• Beginners use it as static model, a canvas to fill in the blanks, but most ‘seasoned’ users will not do a complete model they will identify where requisite variety does not exist and focus upon this.

System 5

3.3.1 Model or Methodology (Cont.)• If we have a rusty and frayed wire connecting two points in a system then we do not solve the problem by changing the nodes, we solve it by improving the connections.

• Reconciling the relative misalignments between the variety of the environment with the variety of the organisation, and in turn with the variety of the department and ultimately the variety of the management is what VSM does.

• Ashby’s law of Requisite Variety is the law that stands between stasis and chaos, between balance and imbalance both ‘actual and potential’.

3.3.1 Model or Methodology (Cont.) • The role of the consultant is to recognise rate of change of the existing environment in comparison to the rate of change of the organisation to match this. What would be the symptoms of such an event?

• Answer this and feed this into the levels of the model to identify possible systemic causes of this pain – your job is then to find the solution.

• Does the problem occur between two operations or the operations and the environment?

• Present this at an emotional level to gain buy-in to the modelling process.

• Where we start is linked to where the symptoms occur.

System 5

3.3.1 Model or Methodology (Cont.)

Switching between the static and dynamic.

• Static elements – people & teams fulfilling systemic roles at particular levels of recursion

Dynamic – complexity imbalances, dynamic tensions, requisite variety components

• Process of switching –

• Start with the static structure

• Define the primary activities

• Add the sub-systems 2 to 5

• Do each of the roles have the required capacity to deliver?

• Are the connections in place – revert to the graphic

• Is there requisite variety at each level?

Logic goes – if there is no capacity to maintain the links there can’t be any connections and if no connections exist then the system cannot demonstrate the ‘requisite variety’ needed.

• Questions that then arise;

• Is there anyone fulfilling this system role?

• If not then the requisite variety cannot exist – so are we addressing this?

• So does this explain the chaos / uncertainty / pain?

3.3.2 VSM as a Source of MethodologyVSM as a model of an organisation allows us to see the misalignment of intelligence with decision making.

Management has the ability to identify the wrong things to base decision off. Business Intelligence and performance management metrics that follow different paths and outcomes.

VSM is a radically different way of thinking from the linear approaches of the past. Follow this systemic model and it leads to new, cycle breaking outcomes that move organisations away from history.

3.3.2.1 Different Applications“Unlike most organisational or management models which assume a given identity and purpose, a key difference with Beer’s Viable System Model is that it describes the capabilities necessary for changing identity.” - (http://www.fractal-consulting.com/strategy-and-david-bowie/, Accessed 24.06.2017)

David Bowie – change aficionado and cultural icon imbued with intellectual curiosity read Stafford Beer’s book ‘Brain of the Firm’ and in it saw how VSM could change and sustain him.

VSM is super adaptable – from personal change to biological evolution, the model has relevance in every facet of our ecosystem. Relevant for today’s complex and changing world the model needs to be adopted in our political field.

3.3.2.2 Ethics

• So VSM is a corruptive influence giving people coercive power over others? It is the ‘dictators bible’.

• Or is it an ‘anarchists charter’ the means by which autonomy at every level creates chaos?

• Neither – VSM is the tool to show the limitations of either path.

• One area of ethics discussed to a lesser degree is in the area of ‘recursion’.

• If we define our system of interest in terms of ‘what it does’ then the system below it will be defined by ‘how’ it does this and the level above’ why’ it is doing it. Each level can be seen as being very different in terms of ethics even though they are apart of the same system.

• An example (I think) Robin Hood – what he did was gave money to the poor. Ethically that’s sound. How he did it – he robbed the rich, hmm from the perspective of the poor this was ethical but if your were a noble person, not so much. Why he did it – because he believed in fairness (one perspective). Of course others could say he bought their silence – another perspective with different ethics.

Concluding thoughts on VSM

There was much of this which is complex and much which was far less obtuse.

As a tool it is really powerful, this concept of ‘variety’ and complexity struck a chord and I often see businesses struggle to grow to accommodate changes. I also embrace the idea of ‘structural redundancy’ – the concept of finding ways of increasing capacity. This is also a useful concept for adding some urgency into the process as well as proving a quick win.

The difficulty comes in application. One way might be to overlay VSM onto the Business Model Canvas or embedding the canvas building blocks into the levels of the system. Adding this to the narrative to help shape strategy with some clear objectives.

End of Part 3

Notes by James Cracknell BA (Hons.)

As part of TU811 OU Course Systems Tools for Managing Change

Reynolds, M. and Holwell, S. (2010) Introducing Systems Approaches, in Martin Reynolds, Sue Holwell (Eds.) Approaches to managing Change: A Practical Guide. London: Springer in association with The Open University