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The Viable System Model & Related Pathologies

Beer's Viable System Model identifies the five subsystems that all viable entities share, be they organisms or organizations. This presentation presents these sub-systems and describes the pathologies that result when they are not well implemented.
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Jean-Daniel Cusin

on 28 March 2015

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Transcript of The Viable System Model & Related Pathologies

The Viable System Model - Typical Pathologies
System ONE
Viable: Meaning, capable of independent existence.

What are the systemic invariances that explain viability?

The VSM distinguishes five sub-systems, each of which has a systemic role in interaction with the others to sustain the viability of the whole.

The purpose of these five sub-systems is to maintain the system in a state of homeostatic equilibrium, that is, under control, to ensure the system’s survival, both in the short and long term, by processes of learning, adaptation and evolution.


How systems are viable?
Lets dig in!

This presentation will introduce these five systems that underwrite viability in more detail.

Then we will review the more typical pathologies found in organizations that are caused by the dysfunctional implementation of these systems.

These pathologies hinder these organizations' viability, and therefore their ability to fulfill their mission.


System ONE
System 1 is responsible for the production and delivery of the organization’s goods or services to its environment (market, etc.).

System 1 is made up of operational organizational units, each itself a complete viable system. There can be several such units.

Each System 1 unit is responsible for a line of activity or product, etc. It is these units which “produce” what the organization is mandated by its environment to produce.
System One
Each System 1 unit is in itself a viable system.

This is because viable systems are recursive: every viable system contains and is contained in a viable system.

You will note that the structure of a system 1 unit incorporates the same identical five sub-systems as the higher level recursion.

This enables
Subsidiarity
, which is an organizing principle of decentralization, stating that a matter ought to be handled by the smallest, lowest, or least centralized authority capable of addressing that matter effectively.
System One
Management
Operations
Management
The System 1 operational units as a group constitute a viable whole through their relationships with the management function provided by the 4 other systems.

It is these systems that ensure the coordination between System 1 units, provide operational guidelines, manage accountability and resource allocations, and ensure continued relevance with the external environment within the cadre of the organizational mission.

This level of recursion we are looking at is called the
system in focus
. It is embedded in higher level recursions, and contains within it's System 1 units, embedded viable systems.

Lets look at these 4 management systems.
System TWO
(Anti-oscillatory)

System 2
The System 2 ensures the non-directive coordination between System 1 Units.

System 2 serves to buffer conflicts and oscillations between System 1 units which are each trying to achieve their own goals.

Examples of System 2 functions are:
information systems, production planning or task scheduling tools;
coordination teams;
personnel policies, accounting procedures;
operational norms intended to provide behavioral standards, codes of conduct, etc.

System 2
The purpose of System 2 is to remove complexity from the central command line by resolving potential conflict situations routinely.

Ultimately, System 2 is the principal system responsible for providing System 1 units with the means to maintain their stability.

And to ensure, should this stability be lost due to any internal or external disruption, that steadiness is restored.

To ensure organizational consistency, each System 1 unit also has its own System 2 regulatory component. It is connected to the System 2 component of the higher recursion (the system in focus). This allows the System 1 units to auto-regulate to the extent possible at their level.
What This
Presentation Covers
These five sub-systems are invariant characteristics of viability. Therefore they can be found in all viable systems, including social systems, nations, organizations, human beings, amoebas, etc.

If these systems are not well formed/designed/implemented, the organization will demonstrate pathologies and will be less viable.

Note: These systems are
functions
. They do not necessarily describe how the organization is structured and who does what, nor is this diagram an organizational chart.

The better the organizational structure
supports and enables these functions
the easier will viability be assured.
The converse is also true.
System THREE
(Operational Management
in the
here and now
)

System Three
System 3 is responsible for the operational management of the System 1 units on a day to day basis so they function harmoniously and to exploit possible synergies.

It negotiates each System 1 unit's accountability mandate, roles, performance measures and resources.

It ensures the System 1 units are delivering the expected products or services at the highest level of efficiency and efficacy.

It does not intervene directly in System 1 units as it does not have the requisite variety. It uses System 2 and System 3* to do that, and only when System 1 cohesion is endangered.
System Three
System 3 intervenes by providing information to System 1 units about changes to the organization's aims, purposes, goals, resources originating from Systems 4 and 5, and how these are to affect System 1 operations.

System 3 also provides a number of support functions to the System 1 units which are not within the scope of System 1 unit mandates. In other words, services that do not form part of System 1 deliverables.

These services often include Human Resources, IT, Engineering, Sales and Accounting.
System THREE *
(Sporadic audit)

System 3*
System 3* is a support system for System 3, its main mission being to obtain information on how System 1 is working which cannot be accessed via normal communication channels.

The normal communication channels between S3 and S1 units, and via S2, are designed to filter complexity and preserve S1 autonomy.

When a S1 unit is in distress, S3* does a deep dive into S1 to quickly get at the core issue.

These dives may take the form of audits (quality, accounting, etc.), work studies (engineering), operations research, surveys, special studies, etc.
System FOUR
(Intelligence about the
then and there
)

System Four
System 4 is concerned with the adaptation of the organization to changes and evolving needs in the environment the system in focus is serving.

These changes can be, for instance, economic, technological, social, political, educational, environmental, commercial or legislative.

S4 must be vigilant to identify change early enough so that it can develop internal response strategies to preserve the organization's viability.

S4 includes such activities as Market Research, Technical R&D, and Corporate Planning, and ensures their convergence.
System Four
S4 must monitor trends in the environment and anticipate the impacts of change.

To do this, it may use prospective study tools (e.g., Delphi studies), scenarios planning, sensitivity analysis and simulation models (e.g., Systems Dynamics).

Decision making in S4 should be informed by:
Current real-time state of the organization's critical variables and their trends, with access to underlying data;
Simulation modeling of critical variables based on alternative future scenarios;
Multi-recursion visualization of the organization's functional (VSM) structure;
Access to internal and external data relevant for decision making (past plans, project plans, trends, images, etc.)
The System 3 - System 4 Homeostat
The function of a homeostat is to preserve internal stability amidst external change and stimulus.

While System 3 is concerned with efficiency in the here and now, System 4 pushes the organization to take steps to ensure its future relevance. System 4 relies on System 3 for operational data, and to integrate planned change into the System 1 routine operations.

The challenge of the S3 - S4 Homeostat is to introduce change while not disrupting the ability of the organization to function. This is essential strategic planning.

The e-Deliberation™ protocol was designed to support this homeostatic function by enabling a large group of persons explore multiple pathways of strategic change simultaneously, in integration, and using consent-based decision making.
(https://www.e-Deliberation.com)

System FIVE
(Identity)
Homeostasis
System Five
S5 provides the corporate ethos, the sense of identity of the organization.

S5 regulates the interaction between System 3 and System
4, resolving unsettled variety and differences, maintaining the organization's sense of identity (what it wants to be, and what it does not want to be) while making ultimate decisions about how to navigate change.

S5 typically is responsible to determine the vision, mission and strategic goals of the organization, its viability (the capacity to exist independently of changes taking place in the environment), its longevity.

The corporate ethos includes a sense of "fit" with the values of the environment the organization is immersed in. Indeed, it is a System 1 of a viable system of a higher recursion.
The Environment
Variety
The management of any viable system poses the problem of managing complexity itself, since it is complexity (however generated) that threatens to overwhelm the system’s regulators.

A precise measure of systemic complexity had been proposed as
Variety
, meaning the number of distinguishable elements in a system, or by extension the number of distinguishable systemic states.

Variety is always greater coming from the environment and up the VSM systems: The design of the VSM is to match that emergent variety with regulatory variety to minimize damage to people, cost and the environment.

Variety is communicated as information throughout the VSM, via a number of communication channels, such as the three to the left.
Communication Mechanics
In the design and use of communication channels, dysfunction and loss of signal can happen in several places.
In the encoding of information as a communication (language, etc.)
In the transmittal (noise and bandwidth)
When crossing boundaries
In the decoding at the receiving end
In the return
acknowledgement
path
Variety Management
Each communication channel is actually a two-way variety management device.

Attenuator:
channels and attenuates variety from a higher variety zone to a lower variety one
uses filters, classifiers, categories, standard forms, etc.

Amplifier:
channels information from a lower variety zone to a higher one
advertizements diffusion, dissemination

Each channel must be designed to effectively transact its variety.
Co-ordination
Accountability
Resources bargaining
Rules and instructions
Algedonic channel
Audit channel
The Algedonic Channel
An Algedonic signal is an alert signal that bypasses the normal filtering of other communication paths to alert about impending instability.

Comes from the Greek words “algos” (pain) and “hedos” (pleasure).

Organizational Pathologies
There are three general classes of organizational pathologies
Structural
These pathologies are related to problems with how the organization has sub-divided or partitioned the complexity from the environment it needs to deal with.

Appropriately structuring recursion levels allow the organization to not be overwhelmed by variety - structural pathologies enter when this is not done adequately.
Functional
These are pathologies related to the implementation of the five VSM systems - their existence and adequacy for the job.
Information Systems
& Communication Channels
These pathologies have to do with the adequacy of communication channels and, in wider terms, the information systems to manage the variety of information flow expected of them.
(Structural)
No Vertical Partitioning
A huge number of S1 units all at the same recursion level making it impossible for the organization to manage all the variety it faces.

Recommendation: Identify sub-environments and create sub-organizational units to deal with each.
(Structural)
Lack of a Top Level Recursion
While there are a number of S1 units, these do not provide coverage for the target environment. For example: ecological problems that transcend individual countries.

Organizations whose environment would involve the required wholeness do not yet exist.
(Structural)
Lack of Middle Recursion Levels
While there are a number of S1 units, these leave gaps in the coverage of the target environment. For example: Lack of service coverage in certain areas (cell phones, medical, transit, etc.)

How to provide needed coverage needs to be designed by extending the mandate of existing S1 units, or creating new one.
(Structural)
Entangled Ethos
Organizations may be related (embedded or embedding) to other organizations following different criteria, provoking mission-level conflicts. For instance, a for-profit outfit embedded in a non-profit NGO, or a political party advancing a partisan agenda in the legislature.
(Functional)
Ill-Defined Identity
At the S5 level, the organizations identity is ambiguous, ill-defined. Symptoms include lack of agreement on mission or purpose, target markets, or products that are dissonant with the image of the organization.
(Functional)
Split Personality
At the S5 level, two or more visions of the organization co-exist, pulling it in different directions.
For instance, an organization that is positioning itself both as a hardware and a software enterprise, with two different business models.
(Functional)
S5 Collapse Into S3
At the S5 level, S5 bypasses S4 to intervene directly in S3 day to day operations, lacking requisite variety and limiting S3 autonomy. This may negatively impacts S1 units, and the loss of meta-perspective internalizes the organizations focus, affecting its viability.
(Functional)
Identity Disconnect
To maintain the integrity of identity, the S5 from the various levels of recursion must be able to ensure identity coherence throughout the levels.
Identity disconnect happens when evolving identity at any level does not propagate, leading to incoherence.
(Functional)
Absent Navigator
When S4 is weak or absent, it manifests as failures to modify, when appropriate, the products or services offered by the organization, excessive time taken to change or adapt the latter to market needs, the weak introduction of new products, or introducing the wrong type of product.
(Functional)
S3-S4 Dissociation
When the S3 - S4 homeostat is weak or non-functioning, S4 is unaware of the internal status of the organization. S3 will see S4 as being unrealistic with it's plans and S3 will be seen by S4 as being non-receptive. This leads to an inability of the organization to adapt and a diminished viability.
(Functional)
Micromanaging
A too-authoritarian management style may lead to excessive intervention by S3 deep into S1 units, disrupting their autonomy, and overloading S3 with horizonal variety. This indicates poor S2 and S3* design, and an inadequacy of the 3 vertical channels. S3 interventions need to focus on fixing these.
(Functional)
Two-faced S3
S3 interfaces between the system (operational units) and the metasystem (S3-S4-S5 management triad). A polarization in either direction at various times will lead to inconsistencies, internal tensions and dissatisfied elements in both the system and the metasystem.
(Functional)
Free For All
When the relationship between S3 and the S1 units is weak, the latter lack the guidance required to achieve synergy and integration as a whole. Each unit behaves on its own, and S2, as it tries to impose it's coordination, will be seen as bureaucratic. S1 units end up working each for itself: local optimization at the expense of the whole.
(Functional)
S3 Hypertrophy
When S2 and S3* are atrophied, all vertical variety is then being absorbed by S3, often leading to an over-developed (and overwhelmed) S3 that micromanages the S1 units. This destroys subsidiarity (locating decision making close to the point of need), S1 autonomy, and whole system effectiveness.
(Functional)
Absent S3*
Frequently, S3* is simply not there. As a result, there is no audit/investigation modality, leading to all manner of undiscovered and unremediated behaviors which may be inappropriate, misaligned and even unethical.
Or sometimes S3* exists but is ineffective because audits are announced ahead of time or are covered up.
(Functional)
Ineffective S2
Signs of a dysfunctional, ineffective or missing S2 include a lack of collaboration between S1 units, no solidarity in competition for common resources, disjointed process flows, and other issues that force S3 to intervene "from above" to restore the peace.
S2 needs to be designed by the managers of the S1 units, with support from S3.
(Functional)
Bureaucratic S2
If S2 is perceived by S1 units as imposing certain work methods as opposed to it's core role of coordination, the result can be S1 unit non-compliance.
This can be fostered by the personality of the S2 incumbents, a weak S3, inappropriate/conflicting S1 unit mandates, etc.
(Functional)
Self-aggrandizing S1
This describes organizations whose individual goals are their only focus excluding any consideration for the framework of the larger whole. A medical analogy is a cancer growth, which eventually destroys the host.
This happens when a S1 unit is allowed to dominate and when S3 lacks sufficient power to remedy this.
(Functional)
S1 Takeover
When S1 dominates the management metasystem, the S1 units lose metasystem direction and alignment, degenerating into "each man for himself" behavior, and a collapse of corporate identity.
(Functional)
Pathological
Autopoiesis
This describes organizations which over time have replaced their original mission with the aim of perpetuating their own existence above everything else.

This results in a parasitic drain on the rest of the organization or community.

(Functional)
No Metasystem
When the metasystem (S5-S4-S3) are weak or non-existent, this gives an organization which is analogous to a comatose patient. The body keeps on functioning, but it's viability is seriously compromised.

(Info channels)
No Information
System
The issue here that there is no reliable infrastructure (computerized or not) to supply information about variety to be managed to each parts of the organization.
This is analogous to a severely damaged nervous system.
Decisions are reactive and made on an ad-hoc basis, without synergy or insight.

Fragmented
Information System
With this pathology, information systems do exist, but they are disparate and non-integrated, operating as islands. Optimization occurs locally, often to the detriment of the whole.
Coordination is very difficult, usually through endless meetings and conflicts, and operations are ineffective at realizing their mission.
(Info channels)
Muted
Algedonic Channel
The purpose of the Algedonic channel is similar to a pain signal: to alert quickly about dire, unexpected situations that exceed the normal variety expected by the organization.
If this signal is filtered out or there is no channel for it, it is like taking too much pain medicine - the organization will take a long time to find out and respond to viability threatening circumstances.
(Info channels)
Insufficient
Capability
The actual communication channels are insufficient to transmit the full requisite information, either because it is not well encoded / decoded, because of bandwidth issues, and/or because the information is not refreshed often enough.
This takes multiple forms - simplistic classifications, stale-dated data, ambiguity, etc. and results in comatose organizational effectiveness.
(Info channels)
The Viable System Model (VSM)
Key Notions
All viable entities (people, organizations, amoebas, etc.) persist because they all share
the same basic unvarying characteristics
.
These are called the 5 VSM systems.
The function of each of these systems is to
manage complexity
and to be
adaptive.
Recursivity: Each viable entity is embedded within other viable entities, and embeds viable entities within itself.
System 5:
Identity
S5 provides the corporate ethos, the sense of identity of the organization and is responsible to determine its vision, mission and strategic goals.

S5 regulates the interaction between System 3 and System 4, maintaining the organization's sense of identity (what it wants to be, and what it does not want to be) while making ultimate decisions about how to navigate change.
System 3:
Operational Mgmt
System 3 is responsible for the operational management of the System 1 units on a day to day basis so they function harmoniously and to exploit possible synergies.

It negotiates each System 1 unit's accountability mandate, roles, performance measures and resources.

It ensures the System 1 units are delivering the expected products or services at the highest level of efficiency and efficacy.
System 1: Operations
System 1 is responsible for the production and delivery of the organization’s goods or services to its environment (market, etc.).

System 1 is made up of operational organizational units, each itself a complete viable system. There can be several such units.

Each System 1 unit is responsible for a line of activity or product, etc. It is these units which “produce” what the organization is mandated by its environment to produce.
System 2: Coordination
The System 2 ensures the non-directive coordination between System 1 Units.

System 2 serves to buffer conflicts and oscillations between System 1 units which are each trying to achieve their own goals.

Ultimately, System 2 is the principal system responsible for providing System 1 units with the means to maintain their stability.
System 4: Intelligence
System 4 is concerned with the adaptation of the organization to changes and evolving needs in the environment: early detection & strategic planning.

These changes can be, for instance, economic, technological, social, political, educational, environmental, commercial or legislative.
Cerebral
cortex
Dience-
phalon
Autonomic and para-sympathetic
Systems
Sympathetic
Nervous
System
Organs
The Board
The People
The President
Market Research, R&D, Corporate Planning
Operational Management, Support Services
(Human Resources, IT, Engineering, Sales and Accounting, etc.)
Coordination
(Information systems, production planning or task scheduling tools;
coordination teams; personnel policies, accounting procedures;
operational norms intended to provide behavioral standards, codes of conduct, etc.)
Operations
(Production departments, work centers, detachments, restaurant kitchen, medical clinic - any entity that produces or supplies a product or service to customers/clients/patients/its environment)
The universal characteristics of viability
Lets look at how these 5 systems manifest in a human body and in an organization.

The Human Body

An Effective Organization (Functional Architecture)
For more info: VSM@e-Deliberation.com
References
The Viable System Model:
its provenance, development,
methodology and pathology, Stafford Beer, 1989
http://quantumcybernetics.org/Uni-Work/Papers_of_Interest_files/Viable_System_Model-1989%20CwarelInst.pdf
Beer, S. (1981). Brain of the Firm, 2nd edn. Chichester:
John Wiley.
Beer, S. (1979). The Heart of Enterprise. Chichester:
John Wiley
Beer, S. (1985). Diagnosing the system for Organizations.
John Wiley
Rıos, J. P. (2012) Design and Diagnosis for Sustainable Organizations - The Viable System Method
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