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Viable System Model (VSM) - no we are not talking IT

PART 1: What is VSM?

1. What does it mean when say an organisation is a complex system?

Daniel H. Kim defines a system as “any group of interacting, interrelated, or interdependent parts that form a complex and unified whole that has a specific purpose”. In that lies the complexity of a system.

The defining characteristics of a system are; systems have a common purpose that holds all the parts together, all the parts in the system must be present in order for it to work towards its purpose, the order in which the parts of the system are arranged impacts on the performance of the system and the system maintain its stability through feedback in order for it to make corrective adjustments when needed.

Organisations are complex systems in that all parts in the organisation are interacting with one another all the time not only in a linear way but also across departments and processes. All the parts in the organisation have a complex interacting and interconnected relationship. One action by one part in the organisation can have multiple impact on various other parts within the organisation. Decisions and actions taken anywhere in the organisation not only impact on other parts in the organisation but also the organisation as a whole.

Think about it, your organisation decides to expand operations into other parts of the world, or just simply to offer another product/service or just to change an internal process; what parts of the organisation are impacted by these decisions, and does it change the organisation?

2. What are Systems thinking?

Kim defines system thinking as “a way of seeing and talking about reality that helps us better understand and work with systems to influence the quality of our lives”.

We view the real world from multiple levels of perspectives namely events, patterns and systemic structures.

  • Events are the things we experience and come across daily.

  • Patterns are collective meanings we give to events over time that form recurring trends when we put them together.

  • Systemic structures are how the parts in a system are organised that creates the patterns and events we see.

Our perspective of what happens in our organisations are generally rooted at the event level. We can easily see the events that happen in our organisation oppose to the patterns and systemic structures that are the drivers of the events we see.

3. What does VSM mean then?

Not only are organisations complex systems but so are the environment in which they operate.

For organisations to not only survive but thrive into the future they must be able to create viability in order for them to be able to adapt to the environment. The traditional hierarchy model in organisations today still mirror a power or blame structure but does not help one understand what an organisation does, how it does it, how and where performance is managed in the organisation, how all the parts work together, how the organisation adapts to change, how it takes decisions based on what information and where does that information come from.

Stafford Beer was not satisfied with the conventional methods of thinking and management in organisations. He developed a new thinking or approach through his own understanding of systems theory and cybernetics and applied the principles from cybernetics to the working of the human body. By applying his VSM model it allows us to answer questions to better understand our organisations so that we can diagnose why or why not they work and adapt to correct or enhance its functioning.

VSM was developed through the applied understanding of the principles of cybernetics to the working of the human body. Organisational cybernetics studies how organisations function as a system with a focus on the communication and control in the system.

4. Some key concepts about VSM to understand.

Let’s make it easy and replace the word system with organisation.

We need to understand some concepts about VSM in order to use VSM to model and diagnose the viability of the organisation.

  • A viable organisation has the capacity to keep its own existence throughout time regardless of changes in the environment due to its ability to solve problems.

  • An important characteristic of any viable system is recursion. Recursion refers to the principle in VSM that every viable organisation consists of smaller viable parts that forms part of a bigger viable organisation or department.

  • Various agents make up the environment of an organisation where it performs its activities such as legislation, competitors, customers, technology etc. Information about the current and future environment in which the organisation operates must be obtained for the organisation to adapt to changes in the environment. Organisations must be able to deal with the variety from the environment which refers to the complexity an organisation must deal with to be viable.

  • For the organisation to deal with this tremendous task of dealing with the complexity from its environment it must have requisite variety which is the ability of the organisation to respond with equal or more variety to the variety of the environment.

  • Management use attenuators and amplifiers to create balance between the variety from the environment and the operations of the organisation. Attenuators are activities that reduces the variety that the organisation needs to deal with for example putting similar complex tasks into departments. Amplifiers are activities that increases the variety that the organisation needs to deal with for example increasing marketing activities to the market.

  • Information and communication channels and flow are what connects all the parts of the organisation with each other and with the environment and is also used to adjust variety.

  • Another key concept of VSM is autonomy. Autonomy means that all parts of the organisation must be able to self govern with the necessary resources it requires to do so within clearly defined boundaries and aligned to the organisation as a whole.

  • Autonomy however often threatens cohesion throughout the organisation. Cohesion is the aligning of the interests and purpose of individual parts of the organisation with that of the whole organisation. Cohesion together with adaptation is required for viability.

  • Adaptation is the ability of the organisation to adapt to and align the internal and external environment.

5. So why the fuss about VSM?

By using VSM to diagnose our system in focus, the organisation as a whole or part thereof, we will be able to identify organisational pathologies. Organisational pathologies are the result of a shortage, absence or defect in the organisation. This will in turn allow us to design to correct these pathologies.

Keep an eye out for Part 2 when we will look at the VSM model and explain its various parts.

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