Viable system model


The viable system model is a model of the organizational structure of any autonomous system capable of producing itself. It is an implementation of viable system theory. At the biological level, this model is correspondent to autopoiesis.
A viable system is any system organised in such a way as to meet the demands of surviving in the changing environment. One of the prime features of systems that survive is that they are adaptable. The VSM expresses a model for a viable system, which is an abstracted cybernetic description that is claimed to be applicable to any organisation that is a viable system and capable of autonomy.

Overview

The model was developed by operations research theorist and cybernetician Stafford Beer in his book Brain of the Firm. Together with Beer's earlier works on cybernetics applied to management, this book effectively founded management cybernetics.
The first thing to note about the cybernetic theory of organizations encapsulated in the VSM is that viable systems are recursive; viable systems contain viable systems that can be modeled using an identical cybernetic description as the higher level systems in the containment hierarchy.
A development of this model has originated the theoretical proposal called viable systems approach.

Components

Here we give a brief introduction to the cybernetic description of the organization encapsulated in a single level of the VSM.
A viable system is composed of five interacting subsystems which may be mapped onto aspects of organizational structure. In broad terms Systems 1–3 are concerned with the 'here and now' of the organization's operations, System 4 is concerned with the 'there and then' – strategical responses to the effects of external, environmental and future demands on the organization. System 5 is concerned with balancing the 'here and now' and the 'there and then' to give policy directives which maintain the organization as a viable entity.
  • System 1 in a viable system contains several primary activities. Each System 1 primary activity is itself a viable system due to the recursive nature of systems as described above. These are concerned with performing a function that implements at least part of the key transformation of the organization.
  • System 2 represents the information channels and bodies that allow the primary activities in System 1 to communicate between each other and which allow System 3 to monitor and co-ordinate the activities within System 1. Represents the scheduling function of shared resources to be used by System 1.
  • System 3 represents the structures and controls that are put into place to establish the rules, resources, rights and responsibilities of System 1 and to provide an interface with Systems 4/5. Represents the big picture view of the processes inside of System 1.
  • System 4 is made up of bodies that are responsible for looking outwards to the environment to monitor how the organization needs to adapt to remain viable.
  • System 5 is responsible for policy decisions within the organization as a whole to balance demands from different parts of the organization and steer the organization as a whole.
In addition to the subsystems that make up the first level of recursion, the environment is represented in the model. The presence of the environment in the model is necessary as the domain of action of the system and without it there is no way in the model to contextualize or ground the internal interactions of the organization.
Algedonic alerts are alarms and rewards that escalate through the levels of recursion when actual performance fails or exceeds capability, typically after a timeout.
The model is derived from the architecture of the brain and nervous system. Systems 3-2-1 are identified with the ancient brain or autonomic nervous system. System 4 embodies cognition and conversation. System 5, the higher brain functions, include introspection and decision making.

Rules for the viable system

In "Heart of Enterprise" a companion volume to "Brain...", Beer applies Ashby's concept of Variety: the number of possible states of a system or of an element of the system. There are two aphorisms that permit observers to calculate Variety; four Principles of Organization; the Recursive System Theorem; three Axioms of Management and a Law of Cohesion. These rules ensure the Requisite Variety condition is satisfied, in effect that resources are matched to requirement.

Regulatory aphorisms

These aphorisms are:
  • It is not necessary to enter the black box to understand the nature of the function it performs.
  • It is not necessary to enter the black box to calculate the variety that it potentially may generate.

    Principles of organization

These principles are:
  • Managerial, operational and environmental varieties diffusing through an institutional system, tend to equate; they should be designed to do so with minimum damage to people and cost.
  • The four directional channels carrying information between the management unit, the operation, and the environment must each have a higher capacity to transmit a given amount of information relevant to variety selection in a given time than the originating subsystem has to generate it in that time.
  • Wherever the information carried on a channel capable of distinguishing a given variety crosses a boundary, it undergoes transduction ; the variety of the transducer must be at least equivalent to the variety of the channel.
  • The operation of the first three principles must be cyclically maintained without delays.

    Recursive system theorem

This theorem states:
  • In a recursive organizational structure any viable system contains, and is contained in, a viable system.
  • Society itself can be seen as a system of recursion. In this case, recursion refers to systems that are nested within other systems.

    Axioms

These axioms are:
  • The sum of horizontal variety disposed by n operational elements equals the sum of the vertical variety disposed by the six vertical components of corporate cohesion.
  • The variety disposed by System Three resulting from the operation of the First Axiom equals the variety disposed by System Four.
  • The variety disposed by System Five equals the residual variety generated by the operation of the Second Axiom.

    The law of cohesion for multiple recursions of the viable system

This law states:
  • The System One variety accessible to System Three of recursion x equals the variety disposed by the sum of the metasystems of recursion y for every recursive pair.

    Measuring performance

In Brain of the Firm Beer describes a triple vector to characterize activity in a System 1. The components are:
  • Actuality: "What we are managing to do now, with existing resources, under existing constraints."
  • Capability: "This is what we could be doing with existing resources, under existing constraints, if we really worked at it."
  • Potentiality: "This is what we ought to be doing by developing our resources and removing constraints, although still operating within the bounds of what is already known to be feasible."
Beer adds "It would help a lot to fix these definitions clearly in the mind." System 4's job is essentially to realize potential. He then defines
  • Productivity: is the ratio of actuality and capability;
  • Latency: is the ratio of capability and potentiality;
  • Performance: is the ratio of actuality and potentiality, and also the product of latency and productivity.
Consider the management of a process with cash earnings or savings for a company or government:
These methods can be similarly applied in general e.g. to hours worked in the performance of tasks or products in a production process of some kind.
When actuality deviates from capability, because someone did something well or something badly, an algedonic alert is sent to management. If corrective action, adoption of a good technique or correction of an error, is not taken in a timely manner the alert is escalated. Because the criteria are applied in an ordered hierarchy the management itself need not be, but the routine response functions must be ordered to reflect best known heuristic practice. These heuristics are constantly monitored for improvement by the organization's System 4s.
Pay structures reflect these constraints on performance when capability or potential is realized with, for example, productivity bonuses, stakeholder agreements and intellectual property rights.

Metalanguage

In ascending the recursions of the viable system the context of each autonomous 5-4-3-2 metasystem enlarges and acquires more variety.
This defines a metalanguage stack of increasing capability to resolve undecidability in the autonomous lower levels. If someone near process level needs to innovate to achieve potential, or restore capability, help can be secured from management of higher variety.
An algedonic alert, sent when actuality deviates by some statistically significant amount from capability, makes this process automatic.
The notion of adding more variety or states to resolve ambiguity or undecidability is the subject of Chaitin's metamathematical conjecture algorithmic information theory and provides a potentially rigorous theoretical basis for a general management heuristic. If a process is not producing the agreed product more information, if applicable, will correct this, resolve ambiguity, conflict or undecidability.
In "Platform for Change" the thesis is developed via a collection of papers to learned bodies, including UK Police and Hospitals, to produce a visualization of the "Total System". Here a "Relevant ethic" evolves from "Experimental ethics" and the "Ethic with a busted gut" to produce a sustainable earth with reformed "old institutions" becoming "new institutions" driven by approval from the "software milieu" while culture adopts the systems approach and "Homo faber" becomes "Homo Gubernator" .