The Viable System Model and Leadership

This post contains an excerpt of the book „Responsible leadership in a complex world“ (Zitat, so far only available in German) which is a co-production of Peter Gomez, Timo Meynhardt and me. Our work used the Viable System Model to offer a framework for Reflective Practitioners (according to the definition of Donald Schön). One of the key insights: Responsible leadership is defined by the concept of viability. Only if the viability of the organization and society is preserved, leadership can be understood as an responsible endeavor. Almost at the end of the book we offer an extensive list of questions that Reflective Practitioners could use to find out, if they meet our standards. Of course this list does not claim be complete, as we deal with a quite complex topic, but nevertheless this set of questions might be helpful to think about the matter.

The „syntax“ of this sequence is structured the following way:

– The specific subsystem of the Viable System Model

– Questions regarding self-management

– Questions regarding leadership in organizations

A short crash course into the model

If you are not familiar with the concept of the Viable System Model (VSM), this brief introduction might give you an idea what it is about. At first the visualization of the model to give you an impression of its beauty and elegance. If you look closer you can discover the fractal nature of the model.

 

Viable System Model - default version

Environment: No system can exist without its corresponding environment. And: There would be no environment, if there would be no embedded system. Both aspects are structurally coupled.

System 1: This subsystem is responsible to produce and deliver value to its customers. It is called the operation of the system and works in (relative) autonomy.

System 2: Balances the activities of System 1. It is responsible to harmonize the production flow. One could speak of the regulatory nature of this subsystem.

System 3: Has a privileged position in the model, since it oversees the activities of all System 1. It is responsible for the „fair“ distribution of resources and rules. It is accountable for the mid-term results of the organization.

System 3*: This subsystem takes care that „blind spots“ are detected. Originally Stafford Beer called it the Audit channel. In the context of knowledge work I prefer to use the term Retrospective system.

System 4: This subsystem is in charge to explore the environment and develops strategies and scenarios for the organization. Therefore it is also the place for innovation and the long-term development of „the whole“.

System 5: The ultimate authority of the organization, since it defines its identity. Even though it is far away from the operation (System 1) it is responsible for all actions of the system. It balances the interests of the „inside and now“ (System 3) and the „outside and then“ (System 4).

Wish you happy thinking!


System 1: The place of value creation for the customer

The following questions arise in the context of self-management:

  • Do I know my different roles as manager, colleague, family member or friend?
  • As the person in charge (of myself), am I in a position to lead my business unit autonomously – in all dimensions?
  • Do I know the expectations of my customers, and is my value chain consistent? Is my system designed to deliver value autonomously?
  • Do I have personal operational resources available to support a balance between my different roles?
  • Can I rely on my „leadership reflexes“ when processes don’t work?

The following questions arise during leadership in organizations:

  • Are our business units viable because they create immediate value for clients? And could they also be left on their own to maintain viability?
  • Do our business units have the necessary resources and capabilities to do so? Is there enough freedom for the units as well as a leadership team with the necessary talents and competencies?
  • Is the unit in regular contact with the customer to listen to him, or is it just speculation regarding the wishes and demands of the customer?
  • Does the unit have a shared understanding of how to exite existing and new customers?

System 2: Local and short-term coordination of day-to-day business

The following questions arise the context of self-management:

  • Am I personally prepared, as the person responsible for a business unit, to provide information and time resources for informal coordination with „others“ in a short-termed and transparent manner?
  • Do I resist the temptation to elegantly „get rid“ of annoying infrastructure tasks by delegating it to „others“?
  • How consistently do I design my „Time Boxing“, and am I able to prioritize?
  • Do I know my golden corridor of day-to-day business and development/project tasks? Do I know how to get into a productive flow?

The following questions arise during leadership in organizations:

  • Is the daily coordination of business units organized in a way, which beyond guidelines of the „command axis“, is able to give each other „informal“ support?
  • Can we deal with fluctuations/oscillations?
  • Do we have a system of Key Performance Indicators (KPIs) that identifies potential weaknesses in business unit productivity and capacity constraints? If metrics are in place: Are the units able to solve their problems by themself?
  • Is the current performance/capacity of the unit known? Are resilient structures in place?
  • Can forecasts regarding the consequences of reprioritisations be expressed?
  • Is System 2 being listened to? Is the relevance of self-responsible harmonization at the level of day-to-day business secured in order to ensure organizational efficiency?

System 3: Managing ongoing business

The following questions arise the context of self-management:

  • Do I have the necessary resources (time, strength, skills) to manage an ongoing business?
  • Do I involve those responsible for achieving the mid-term earnings of the „machine room“ in a way that takes their interests and „rituals“ into account? Do I motivate them in the best possible way?
  • With all my priority for efficiency, do I also install enough buffers to keep my promises?
  • Do I create synergies between my different roles?
  • Do I set the right mid-term priorities?

The following questions arise during leadership in organizations:

  • How do we structure this management level in such a way that it ensures a healthy med-term development of the company’s earnings ?
  • How do we achieve an optimal coordination of med-term earnings planning? How is it aligned with strategic goals of the company?
  • How do we coordinate the med-term planning process of the entire company? How independent is the planning and coordination of the day-to-day business, without the need for „Micromanagement“ which limits the autonomy of the Units?
  • Are the strategic objectives clear (System 4), so that at the level of the ongoing business is able to make „the right decisions“?

System 3*: Audits, introspectives and retrospectives

The following questions arise the context of self-management:

  • How do I protect myself from loss of reality (e.g. burnout, lack of sleep) and self-delusion (over-confidence)?
  • How can I design a warning system in such a way that trust of the operational responsible person is not damaged?
  • Do I take time to introspect? Do I allow myself to recognize my own mistakes, can I forgive myself and learn from them?
  • Do I have friends who help me to forgive myself by giving me honest feedback? Do I have people which reflect me critically?

The following questions arise during leadership in organizations:

  • How do we develop a corrective beyond the „command axis“ – analogous to the informal coordination of day-to-day business – which reveals „filtered information“?
  • Do I make sure that unexpected occurring errors in the organization are prevented by its own warning system? Are the signals discovered internally – or by the customers?
  • How do we ensure that this warning system is committed to neutrality, and is in the best interests of the company as a whole?
  • Do managers only know the „machine room“ from Excel diagrams? Are they at least occasionally at the scene of the events?
  • Does there exist a climate in which an objective research of root causes can be carried out, while the findings are perceived as enrichment to knowledge?

System 4: Exploring possible futures

The following questions arise in the context of self-management:

  • How Do I use my options of action to support the long-term development of the company?
  • How can I holistically grasp the environment in its contexts in order to
    not to develop strategies that simply update the status quo?
  • How do I transform inventions into innovations by linking the strategic and operational levels of the organization?
  • How do I achieve a change of perspective for myself and how do I motivate others to do that?
  • How do I use the concept of Public Value and how do I integrate in my considerations?

The following questions arise during leadership in organizations:

  • How do we ensure that all activities for the development of the company are not only coordinated among each other and across all hierarchical levels, but also that they are carried out in constant interaction with the environment?
  • How do we make sure that „the power of the wheels is brought to the road“? How does an optimal interaction between operational and strategic management works?
  • How do we use the instruments of networked thinking in such a way that it becomes the standard  process of strategy development?
  • How do we develop an early detection system for environmental developments that can be used to identify Megatrends?

System 5: The identity of the organization

The following questions arise in the context of self-management:

  • When was the last time I talked about my values, „purpose“ and goals? How do they relate to the company’s goals?
  • Am I able to articulate my own purpose and communicate it to others?
  • What does „Walking the Talk“ mean to me in terms of corporate values?
  • Are my actions related to the common good?
  • Do I question myself again and again by asking for feedback? Am I open for feedback that contains criticism? Do I actively search for it?
  • Am I willing and able to place my actions in a broader context of social and philosophical perspectives?

The following questions arise during leadership in organizations:

  • Can we even name our purpose? If not, why not?
  • How can we ensure that the company’s purpose is in line with the contribution it makes?
    Are our economic actions a contribution to the Public Value/Common Good?
  • How do we achieve that the communicated purpose of the company is combined with the real-life behavior (POSIWID)? Are we in a position – in everyday business – to establish the connections with the larger whole (recursiveness of the organization and total environment)?
  • What mechanisms do we need to productively resolve any value conflicts?