The Viable System Model – Part 3

If cybernetics is the science of control, management is the profession of control.

Stafford Beer

Authority vs. Providing Service

The design of a Viable System is not hierarchical and is not authoritative. A Senior manager’s role is defined as a ‘Service Provider’ rather than a point of authority, and there is a very good reason for that: Laws of Variety.

It is simply impossible to have an operational unit capable of effectively and efficiently dealing with a multitude of varieties in its environment and being directed all the time.

System 1 sub-systems are intentionally designed with the maximum autonomy possible. The only thing limiting this autonomy is that their defined purpose is aligned with the overall organizational purpose.

Let’s have a closer look at other parts of the Viable System design:

​System 2 –Coordination and Conflict Management

As mentioned earlier, there is a need for something that we call ‘System 2’ to ensure the cohesion between different processes.

Without it, multiple horizontal managements will try to maximize their own goals without noticing that they are inside the boundary of a larger system and all affect each other. Maximizing one part might have a negative effect on the other part and vice versa.

Different parts of a system (an organization) have different purposes and roles; by definition, they will demonstrate conflicting interests.

Conflict: A Discomforting Difference

Embrace Happiness – The Art of Conflict Management, Ali Soleymaniha, 2014

Conflicting interests will create instability and disharmony between these parts, and if left unchecked, this will eventually lead to the destruction of the whole system.

To go back to our previous example of a manufacturing company, maximizing the goal of the financial department to decrease the inventory levels to the minimum level will negatively affect the sales department’s ability to satisfy customers in a timely manner. They will push to increase the inventory levels, and by doing so, they will negatively affect the financial metrics, hence the oscillation behaviour of the system and disharmony between sub-systems.

System 2 does not have an oppressive nature; to the contrary, it has rather a ‘service provider’ nature. The type of control this system exerts is considerably different from the usual perception of the term ‘control’ and its somewhat negative connotation. System 2 ensures cohesion and harmony and avoids oscillation.

A good example of this would be a ‘timetable’ to coordinate vacation time for project team members. The timetable’s purpose is not to dictate what to do and what not to do; it merely provides a straightforward service so everyone can coordinate their vacation time in a way that the project tasks are always covered.

System 2, in organizations, has this unhealthy tendency to become a Viable System itself, trying to exercise more and more control and, in the process, becoming a massive bureaucracy by itself.

Reaching the point of equilibrium is a very delicate matter: to avoid both extremes of ‘no coordination’ and ‘over control.’ This is one of the significant factors for today’s organizations’ failures.

It is critical to understand System 2 as a ‘service provider’ for coordination, sharing information, common standards, and shared values. System 2 is a repository of the organization’s information and knowledge.

​System 3 – Optimization and Synergy – The Internal Eye

So far, in our organizational design, we have environments, processes, managements, and a function to ensure cohesion and avoid oscillation (System 2). Do we need anything else? What are we still missing?

Having System 2 to ensure cohesion and sharing of the information will, to some extent, enable the organization to manage some conflicts that could happen between System 1 sub-systems.

All these horizontal systems are fully engaged in managing their complex processes and even more complex environments. There is a need for some functions to monitor, observe, control, and ensure the optimization of all activities.

System 3 is responsible for simultaneously observing the state of all sub-systems (the horizontal managements) and ensuring the overall functions of all sub-systems are tuned towards maximizing the overall goal. In other words, System 3 is an internal eye responsible for operations planning and control and internal and immediate monitoring and control of the organization.

System 3 can be thought of as a middle point between multiple operations. Each operation is focused on meeting its environment’s demands. System 3’s purpose is to identify opportunities to optimize the overall process and create synergy.

It does not have a superior existence. Similar to System 2, System 3 is there to provide a service to ensure the operations are effective, efficient, and optimized.

System 3 will perform the following functions to ensure optimization and efficiency:
Goal setting and resource allocation

1. Goal Setting and Resource Allocation
2. Corrective actions
3. Conflict management
4. Conflict Management

1 - Goal Setting and Resource Allocation

Aligned with the organization’s overall objective, System 3 will define operational goals for System 1 sub-systems. The goal will clearly state the target to be achieved and the resources (time, finances, people) to be utilized to this end.

Resources in any organization are limited, and System 3’s function is to allocate resources between System 1 sub-systems in accordance with the whole organization’s purpose and objectives.

This creates an opportunity for sub-systems to develop ideas to increase effectiveness and/or improve efficiency and start a bargaining process for more resources to implement those ideas.

This dialogue plays an important role in identifying and implementing improvement opportunities across the organization.

2 - Operational Accountability

Having goals set and resources allocated, System 3 must ensure that each sub-system (operational element) adheres to the defined goals and resources.

Operational elements, in turn, need to be accountable for their actions and be able to present their progress against set goals. System 3 will monitor and check the results against defined criteria, creating operational accountability.

However, it might sometimes be impossible to gather all the results and data from all operations across the organization, and if gathered, it will be a considerable workload for any function to manage.

To solve this, Stafford Beer looks to the human body to understand the brain’s control mechanism.

Receiving information from its sensory organs (System 3*), the Human brain creates its holistic model and perception of the environment.

As soon as it understands the concept of gravity, for example, it will know for sure what would happen if it released a glass of water, an apple, or anything else: they will all fall.

Knowing the ‘Model,’ the human brain will have a particular understanding of the possible outcome of many operations and tasks. All the organs (System 1) are doing their defined tasks, and all the information is sent to the brain. Brain, however, does not take action on every single one of them. As long as the operation is inside its defined boundary, the data will be stored (or discarded).

System 3 will receive an ‘all OK’ sign if everything goes according to the plan; otherwise, it will be notified immediately to take corrective actions.

3 - Corrective Actions

In case of any deviation from the defined plan, System 3 will get involved with corrective actions. These might be in the form of updating System 2 to manage the new problem or conflict or in the form of direct interventions.

Considering that each intervention will reduce the autonomy of sub-systems (and hence reduce their variety), it should be performed with the utmost care and only when the overall cohesion of the organization is at risk.

Synergy and Autonomy
The generation of synergy while maintaining autonomy is the essence of System 3.

It is essential to understand that intervening is not a frequent task of System 3. It only happens when there is an absolute need, which is always short-term. After the situation is resolved, a new understanding will be developed, and new knowledge will be acquired on how to deal with the specific problem. This knowledge will be cascaded down to System 1 and System 2 to avoid a similar situation to reoccur.

4 - Conflict Management

Many potential conflicts that might arise between operational elements can be proactively managed by effectively designing System 2. However, there might be conflicts that need an escalation to be managed. These are the times that System 3 will briefly intervene to manage the conflict.

After the situation has been resolved, the intervention will be complete, and System 1 sub-systems will return to their previous autonomous state.

The difference between System 2 and System 3 can be summarized as follows:

Stability vs. Change
The primary purpose of System 2 is to ensure stability, while System 3’s mission is to create change for optimization.

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