The Foundation of the Model
To design a Viable Organization why re-inventing the wheel when we have access to the most viable system of all: Human Beings?
Humans have successfully evolved and adapted to their ever changing environments and have presented a considerable degree of viability. We can learn a great deal by studying this system to see how the brain of this system controls and manages the human body in direct interaction with this harsh environment.
This study of human brain has been Stafford Beer’s inspiration to develop the Viable System Model, leading him to identify the following inter-related systems governing the human body:
- System 1 – All the organs and doers: parts of the body that perform an operation.
- System 2 – The Sympathetic Nervous System, maintaining the human body homeostasis and regulating the interactions of organs, ensuring the stability of the body.
- System 3 – The Base Brain: overseeing muscles and organs, optimizing the internal operations.
- System 4 – The Mid Brain: the connection of the brain to the external environment through sensory systems. Responsible for projecting, anticipating, and future planning.
- System 5 – Higher Brain: the identity of the human being.
The Development of the Model
Three major questions drive this endeavour:
- Can we build a ‘model’ to describe an ‘organization’ regardless of the type and functions it is performing?
- How to identify the underlying principles that describe the dynamics of any type of organization?
- And, what are the prerequisites to ensure the organization is viable?
Every organization is formed to “manage” a “process” in an “environment”:
- A bank manages the process of providing financial services for its clients in its environment.
- A hospital manages the delivery of health services to the society it’s operating in.
Therefore, for any organization we can identify three main elements:
- an environment,
- in which a process is happening;
- for which, there is a management in place.
Complexity and Variety
The existence of the environment and the process seems obvious to some extent; however, what is the main responsibility of the ‘management’ in any organization?
In a traditional sense, the management is there to manage money, people, material, and equipment. Now that we are developing a model, is there a uniform basic ‘thing’ that we could identify, which is the same in every management process?
If there is only one way to go, then, ‘management’ would be pointless! The more we have options to choose from, the more we need to decide and manage. The role of any management function is to deal with the complexity and “manage” a complex situation.
For everything we try to manage, we need something to measure it with; and for the complexity we need a measure to understand the size of a given complex situation. In Cybernetics it is called variety: the number of possible distinct states of a system.
The more complex a system gets, the more its variety becomes (and vice versa). Now, here comes the complicated part:
This apparently convoluted concept, which is known as Requisite Variety (first introduced by William Ross Ashby) plays a fundamental role in systems approach to engineering and management.
To explain this, consider an environment you live in (e.g. your room), where you need to ‘control’ the temperature so that you feel comfortable in that environment.
If it is winter time and the temperature has only 2 states for you (comfortable and uncomfortable), then all you need is a control device (thermostat) with the variety of 2: to turn ‘on’ and ‘off’ the flow of warm air to your room. This way you can keep the temperature of the room in a comfortable range.
On the other hand, if you are more energy conscious, you may want to reduce the energy consumption when you are out of that room: reduce the load of the heating system when you are not using the room.
In this situation, the environment has more than 2 varieties, and you need a device with appropriate number of varieties to control accordingly. You need to be able to tell in what temperature the room should be in specific time ranges: sleep time, morning time, out of room, before coming back, at home, etc.
You can further increase the level of complexity by differentiating between working days and weekends; hence more variety to manage, and a more complex thermostat.
Variety in the Model
Going back to our basic model of the management-process-environment, it is obvious that the variety of the environment (total number of possible states) is much greater than that of the process; and the variety of the process is, in turn, considerably bigger than the possible distinct states that the management can handle.
As an example, imagine a manufacturing company with an environment filled with myriads of complexities (competitors, legislation, suppliers, customers, creditors, etc.)
Also, when you look at the processes (internal manufacturing processes, material handling, quality control, people interactions, training, maintenance, etc.), it definitely presents a greater deal of variety than that of the manager.
This is where we encounter our first problem designing our organization: How can we handle such a great number of varieties in and outside of the organization?
Simple. By increasing or decreasing the variety, of course!
If the variety of the management is less than that of the process, the logical solution for it, to be able to control and manage the whole variety of the process, is to amplify its variety, and/or in the meantime, attenuating (decreasing) the variety that is flowing from the process towards the management.
As an example of the attenuation: instead of creating an information overflow for the management team, let’s give them a simplified and effective dashboard with summarized reports.
The same thing goes between the process and the environment. The process needs to amplify its variety (e.g. through advertisement, marketing campaigns) and attenuate the huge numbers of variety in the environment (e.g. market research, segmentation, market engineering).
Every management technique can be described as one or a combination of these 4 relations of amplifying or attenuation between management, process, and environment:
- Team-based management,
- Learning organizations,
- Total quality management,
- Market research,
- Process re-engineering,
- Management by objectives