The presentation introduces the Viable System Model (VSM), a cybernetic framework for understanding and improving organizational functioning. It argues that current organizational structures, focused solely on anatomy (structure) and physiology (process), are insufficient to handle complexity, leading to systemic crises. The VSM offers a "neurology" dimension – control and communication – derived from biological systems, to enhance adaptability and long-term viability.
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so hello everybody we will be talking
about something that uh I
guess probably none of you or very few
people are already familiar with and uh
that's the so-called viable System model
uh before I start two words about myself
as you can hear I speak a perfect accent
without the slightest English and it's
because I'm a Swiss so once in a while
maybe somebody needs to help me with one
word or other in English I'm 58
consultant since about well more than 30
years active in Europe mainly but also
in Americas and in Asia and my focus is on
on
structure um the Bible System model that
I'm going to introduce you has been
there's many books about it my books
there's one in German there's one in
English and at the end of the today you
get also link if in case you like to
know more about it that would be the
purpose of this session actually to get
you interested in that topic why is it
relevant I would like to start with that
why do I think that everybody nowadays
needs to deal with that model it's not
it's more than a management fed or one
model more about which you could or
could not deal with it the point is the
following uh the point is that I think
we all feel every day that our world
isn't really working uh we are getting
from a situation 20 years ago where we
had many crisis uh the Y 2K crisis the
new economy crisis
911 uh Leman Brothers 2008 crisis
migration crisis climate crisis and so
on today we have multi crisis in society
but we also have more and more crisis in
our economic organiz ation in our
businesses uh and the interesting fact
is that although never in the world was
better educated management more people
that have been well educated as
managers never in the world we had
better science better products better
almost everything more knowledge about
everything more better technology and
nevertheless it's getting worse somehow
and in that situ typically one calls for
better leaders but let's be realistic we
have the leaders we have and leaders can
also become misleaders as history has
shown so I suggest another uh
perspective on the question and that's
my second point I believe that we have a
problem with our organizational
structures which make it very difficult
for managers for leaders uh to do their
jobs uh what is missing organization if
we talk about organization we talk about
structure and process two dimensions and
my hypothesis is this is not enough what
is needed is not something different we
don't need other organizational
structures or other processes even more
agile processes that's not the point the
point is something is missing we need
something additional a third dimension
in organization so to speak and the good
message is that there's a sign behind
this the science is called cybernetics
and that cybernetic has led to a
revolution in Technical Systems since
the 50s so everything we have
nowadays um automation computers even AI
goes back to cybernetics it's the signs
of functioning so to speak and where we
have whereas we have applied it to
Technical Systems we didn't do that for
social systems the social systems are
hungry for it and if we do it that might
to lead to a second revolution over the
technical Revolution also to a
revolution of the functioning of our
social systems be the state be the NGO
be the business be the project whatever
it is so I hope I um raised some
curiousness about what is coming now um
the point is the following we are coming
from a model of the organization that's
based on the machine in the 20th century
and nowadays we're going to to another
perspective on organizations we are
starting to become interested in
biological models because they can deal
better with complexity they're adaptive
resilient uh many other characteristics
and if we look at an organism then we
can see that there is three dimensions
of organizations there is an anatomy
organizational units we find these in
the structure in the orc
charts typically managers talk about
organizations they're taking flip chart
and and drawing orc charts then we have
a physiology in the organism that's a
processes we've been doing a lot about
processes agile and so on in the last 20
years and nevertheless nobody's
satisfied and everybody's asking
yourself well after we defined our
processes agile and we even could do
better but somehow there's it's still not
not
working and if you look at the organism
it becomes clear that there's a third
dimension which is the neurology and the
neurology is so important because we
deal with complexity with our neurology
not with the processes not with Anatomy
that's all needed as well but the
neurology is decisive what is the
neurology it's about control and
communication it's steering it's
mechanisms like coordination
optimization adaptation identity self
steering and so on and so on in other words
whereas at universities we still learn
that organization is about structure and
process I'm using my laser pointer now
to guide you a little bit structure and
processes so organizational units the
anatomy the physiology we need start to
deal with the Neurology of our
organizations the steering organization
the decision structure and the communication
communication
structure and we have a model derived
from cybernetics the model is derived
from our own way of functioning so
that's a nervous system here of a human
being and what you see on the right that
is the model that we're going to deal
with it it's a bionic model it's the
best model that nature has developed
over four billions of years and the idea
is how what can we learn from that idea
for the structuring of our social
organizations if we look at very
different organisms then we can see we
have a human being we have apee a cat
dog a snail even very small organisms
there's always five elements two
principle it's hardly by coincidence
that we can find these similar things in
every or organism is the invariance inv
viability that we can detect here and
that's the idea to structure
organization so that it's viable in the
long run able to maintain and separate
existence in the long run not only doing
business but staying in business in the long
long run
run
now on the left side can you jump can
you jump back can you maybe the the
viable part is clear but what about the
invariance in viability can you can you
explain that again in other
words yes um that's what science is
doing uh uh generally right find the
general in the particular
so what are invariant things for inv for
viability and that was the science
behind it Stafford beer was the inventor
of that model or the found the finder of
the model he found it in very different
organizations so if you take everything
out of these organizations that make
sure that an organism is viable then you
you are coming to these five elements to
steering AIS to this one
principle okay okay mhm so
um here again we have a very simple
model of an organism with an environment
that is surrounding it like an americ
shape here we have the large part of our
brain the middle part small part we have
uh the spine when here we have the
organs muscles heart lungs liver and so
on and if
we are getting close a little bit to the
model you see that we draw the
environment in model on the left side
although actually it's around the model
but that has to do with the steering
relationships that we want to deal with
so our brain is uh steering in its total
environment here and uh the muscles have
their own environment the heart has its
environment and there's coordination
mechanisms and so on and from that the
model is derived in the end so um you
could think that there's five systems
these are the five elements I've been
talking about five systems that are must
be in place in every thing that is
viable be it an organism or be it a
business or be it a project or whatever
and that's a big advantage of that model
that you can apply it to everything that
needs organization whole state and it
has been done to different states you
can apply to the European Union if you
like you can apply to your team you to
your project to uh whatever needs
organization so there's five elements
and what you see as lines here are the
communication channels in 30 years of
Consulting I've haven't seen one
organization that wouldn't say we have
big communication problems and these
communication problems are as difficult
daddies not necessarily bilateral
communication problems but it's about
the interconnection the informational
interconnection of the organization
these are the channels that must be in
place so that an organization is really
functioning and that's the model with
which we can diagnose an organization
say well here we have we have some
pathologies here we have some problems
that we need to solve or also to design
one from
scratch that's the basic model and I'm
going to explain another the
model and I explain what if you look at
organizations through that model some
typical pathologies that we can detect
with it uh if you look at different
kinds of organizations that's what I'm
trying to do and if you like while I'm
developing the model and explain it um
you have a PowerPoint slide in the chat
you can download it and that's the what
the page I'm showing here and you can
take notes about your own organization
whatever that is if you're responsible
for a team appli to your team or if
you're responsible to a project to the
project or a business unit or a division
or you can uh also applied in the
private area if you're working with the
in a football club apply to the football
or whatever uh is of interest for you so
that's uh um how you could uh while I'm
explaining already a little bit think
about and applying it to your situation
if you like yeah um so I try to um send
it in the chat uh for whichever reason
it so far doesn't go through um it
doesn't want to feel I'm Z so there's a
sending deliver mistake yeah I would try
to to send it again if it doesn't work
then just everybody has to take notes uh
in a different in a different way but I
will try to send it Martin yes okay
that's fine so let's start with the
model itself uh here are some familiar
shapes there's the Amic shape of an
environment and the and there's an
operation that's the circle that's what
an organization is doing providing
education mineral water um and whatever
kind of products for the automotive
industry and the box here is the
management box so there's always three
elements environment operation and
management and because we need to say
something about the steering
relationships we draw it in the model
environment on the left side operation
in the middle and management on the
right side and now typically in every
organization we have several of these
these
entities and I'm going while explaining
the model I'm going to applying it to
very small and very large organization
so that you can can get the idea let's
start with a system one out the first of
these five systems the operative
units consisting always of an
environment of an operation and of a
management if you apply that to a family
for example that would be mother father
son and daughter for example right if
you apply to a business we could say
General mode Ms we have Cadillac with
the Cadillac customers the Cadillac
plans and everything and the Cadillac
management and then there's Bo and
there's Pontiac and there's Chevrolet
and so on and so
on if you applied um to a project we
would have the sub projects here and
every sub project has their own task has
their resources the team and they must
have a management that is dealing with
it if you apply to a state like Germany
we have the countries here we have
Bayern and B wenberg B wenberg has its
own geographical environment it has also
its operations like uh the energy
schools and everything that is relevant
and there's a government of p as well as
there's a government for Bavaria and so
on so if you apply to your own situation
the first question is what are my
operative units you can't find them in
your chart because you must distinguish
them from supporting functions like uh
for example in uh in in setf you have an
HR function but HR is not a operative
unit because it's not purpose fulfilling
the system one elements are the ones
with which you fulfill your purpose so
they're doing what the customer pays
for right in a business they must be
able to independently manage the
complexity dynamics of their own
environment like in a family we said in
a family these are the family members I
have a daughter my daughter has her own
environment she has her own operation
she's digesting and breathing by herself
I don't need to do that for her and it's
interesting that organ the Nature has
organized it like that because in
businesses we do it very often not like
that and she has her own management she
has her own will as my wife as myself
that doesn't make the things always very
easy but it's necessary so they need to
deal with their own complexity in a
self-organizing way right
therefore they need High
autonomy their own resources and of
course they surrender part of their
autonomy to the whole must abide by the
greed rules of the game so Bavaria B for
example has everything it needs to be
viable deals with their own complexities
solves their own
problems and nevertheless uh is part of
a larger hole and there are some
restraints uh for its
autonomy now
since we have overlaps in the
environments and since we have always
dependencies between operations because
we we have we're sharing resources for
example um a procurement Department
typically would be an example or a
common architecturing and software
business for example that's restricting
autonomy we dependent on each other and
here when we have for example same
customers in different environments then
we need to coordinate these things also
everything that is orange here needs
coordination and we can exactly detect
for a given organization what needs to
be coordinated and then we ask ourselves
what is our second steering function
remember we talk about the neurology
here the second steering function that
is there to coordinate things to provide
self-coordination oscillation damping
also providing Pro preventing conflicts
for example that otherwise would
arise it involves all supporting
coordinating services and systems is
self-coordination also of the operative
units if they come up with their own
rules and and regulations and so on and
meetings to coordinate
things um examples in a business would
involve planning Control Systems
secretariats meetings committees rules
and regulations guidelines eo's
tradition implicits rule of the games
standards shared services and so on and
so on so we would diagnose in a given
situation and you can do that for
yourself if you draw your system once
for whatever you're applying it ask
yourself where are the environments
overlapping and where are the operations
dependent from each other and what
therefore must be in place to coordinate
these things and to
support the operative
units that is not yet enough it's
necessary but not yet sufficient as the
mathematicians would say so it's the
there's a need for another steering
functions which is the system three and
the system three
is responsible for inside and now of the
whole thing it optimizes the cooporation
between opal units so it makes sure that
the whole is more than the sum of its
parts together we are stronger but that
must be organized synergies are part of
that of
course right the you of experience use
existing uh potential for success make
sure that the high market share is
really also turned over in the in in in
adequate cost structures for example and
decisions are here taken to optimize the
whole thing and here we have
communication channels again that are
restricting the autonomy with exactly
that purpose in a business that would
involve operational planning budget
planning full year targets defining
rules of the game case by case decisions
and C conflicts corporate intervention
compliance and so
on system three so decisions are taken
for the optimization of today's business
in the state that would be the
administration the ex executive the
executive function of a state for
example whereas here we have laws for
example we have culture we have the
socialization of
people um speaking the same language
maybe also even having the same religion
is coordinating people in state things
like that but also of course uh even
more formal
mechanisms executive function in a
family that would be probably uh
decisions about uh um
optimizing uh the the the the time that
you spend together in in a family
optimizing uh things in the short term
and in the existing family it's not
about the future about should we have
another child that are decisions that
must be taken as well but that's will be
a system for function then to look into
the future so system 3 is about inside and
and
now our the the the smallest part of our
brain so so to speak in the organism now
because in decisions are taken to
optimize the whole we need another
function we can learn that from nature
that's the so-called system three star
which is providing real life information
for better decisions in the systems Tre
knowing what is really going on in the
operations not being dependent on the
reporting of the management of the
system on of the operative units not
being dependent on statistics that we
get from support functions uh in the
computer but going there and have a look
by yourself at talk inspections Factory
walks direct contacts with customers of
Staff service mystery shopping of course
also internal auditing service
studies provide unfiltered information
it's an information Channel and not an
intervention channel so it's not about
intervening in the operations because
that's the job of the management here
but no what is going on
here everything necessary but still not
sufficient why not because there's
always a larger environment that's the
businesses you're not doing for example
already or the child that you're not
having yet or the region that were were
you not active in and did that total
environments there's a the green one
there's a specific one which is about
opportunities and threats for your
organization system 4 is dealing with
outside and then with the communication
with the whole environment larger than
the environment of today's
business and then in regards of the
future in a state that would be the
parliaments and the parties and so on
the legislative function in a business
we have strategy development r&t
recruitment technology strategic
marketing communication and so on um in
a family that would be the decisions
you're taking whether you want to
acquire a dog or whether you want to
move to America with the family things
like that who is taking these decisions
is a second question first of all we're
looking at the neurology and ask ourself
whether everything is in place that
these decisions are can be taken and
typically businesses we are very strong
in system 3 management very often weak
in system two very often strong in
system one and typically there's not
enough time in system
four to deal with the challenges and the
opportunities of the future and here in
that Loop here between systems three and
four asking ourselves what is right for
to tomorrow and what is right for today
and how can we take the right decisions
in that interface
because for all for example in the
automotive Industries which is in crisis
again also um nowadays there is the
development of the combustion
engine according to S curves and there's
electromobility coming a new technology
a new solution to the same problem of
mobility and the question is here the
critical decision Zone when do we take
resources out of the existing and
allocated to the new here maybe too
early here maybe too late and since we
see what we can see today the
expectations typically would be well red
curve goes along like that and these are
the people who are just burning our
money that we have earned for crazy
stuff so that's a critical thing and
that has to do with the adaptability and evolution
