Viable Systems Model1
Part 1 on Preventing Fragile Systems Collapse laid out a list of clear fault lines that, when fractured, lead to social system chaos and collapse – the ‘why’ of doing this. This blog (Part 2) aims to drive that social-psychological model down a level deeper into a systems analysis perspective – the ‘what.’ Theory is acceptable, but what do you do with it? First, it must be translated into an operational framework that can be used for diagnosis and analysis. And that’s where cybernetics comes in. Also, I will begin to weave in the threads of the target system under study: US Healthcare.
There are several variations on the application of cybernetic principles to the analysis of organizations. One of those with the most utility is the Viable Systems Model (VSM) and was developed by Stafford Beer back in the early ’60s. In general, cybernetics extends the classical information theory of Shannon and Weaver to the flow of information within an organization. Fundamental principles are information feedback loops, attenuators, amplifiers, and filters. The salient ideas of Cybernetics are:
- Recursion: a level of organization that contains all levels below it. Patterns of organizational interaction can be embedded in technology and made visible.
- Requisite Variety: the existence of numerous options for thought and action. Technology can be used to examine the potential impact of these various options.
- Homeostasis: internal stability of enterprise environment. Communication systems provide feedback throughout the system.
- Self-Referential: a system’s ability to maintain an identity, repair itself, and be aware of itself. Histories of its operation are kept in readily accessible databases and archives.
Basic Building Blocks
The key to an organization’s ‘viability is the maintenance of its identity. For Beer, the purpose is “what an organization does.” Beer takes these basic building blocks and constructs a general model of complex organizations as a diagnostic map. The essential parts of this model are environment, operations, and management.
In Beer’s conceptualization, organizations consist of five levels of activity nested within one another. You might think of it as a series of boxes within boxes, but each has the same general characteristics. These common characteristics are information-channel connections to the environment and one another. Each portion of the model has three elements: management, operations, and environment. There must be connections between its relevant management, operations, and environment for any system within the overall structure. As an example, think of an Emergency Room. Patients come in from the environment, doctors, nurses giving care, and the hospital administration for records, billings, and diagnostics.
These levels are numbered One through Five and begin at the activity level. Each system has a core management issue and is characterized by its unique focus on different activities that a viable system must incorporate. The implication here is that if an organization is missing one or more of these “systems,” it is by definition not viable and will cease to have a unique identity over time, become dysfunctional, and be replaced through the process of creative destruction.
Systems within Systems
This figure is a schematic of the overall Viable Systems Model showing the relationships among the systems. Notice that each System One is connected to various levels of the environment. The lines connecting the elements are information channels. Each of the information channels contains a two-way linkage, as well as attenuators and amplifiers.
System One This is the level of production. This is the base activity of the enterprise, be it production line, food gathering, or healthcare delivery. This is the level where we say the “real work” gets done. The key management issue is one of managing complexity. Moreover, it is the management of environmental complexity in which the entire organization exists. Many signals are coming at the organization, and they bombard System One continuously. System One is connected with information channels that embed attenuators (dampen flows) and amplifiers (multiply inputs). This is equivalent to first-line management and workers. Think of a doctor’s office or a department in a hospital (i.e., Surgery. OB/GYN, ICU, etc.)
System Two This system is charged with managing a state of homeostasis between Systems Ones. This is a coordination and balancing function. Critical issues for this system in our healthcare example are patient load, staffing, and supplies. This is the first level of the system in the VSM, where information crosses unit boundaries; therefore, channel capacity and transducers are included in the information links. This is roughly the same as our depiction of middle-management functions. How many ICU beds are needed, how many ventilators.
System Three The central task here is to manage the internal “here and now.” This is where the limits to oscillation are set. This system sets rules and makes resource bargains with System One’s based on the information it receives from System Two concerning fluctuation. This I where you get an overall picture of systems dynamics, those changing conditions coming from the environment. System Three serves an internal audit function by comparing “deliverables” against expectations and regulatory demands. This is the first specialized level of senior management where overall enterprise responsibility is found–vice presidents.
System Four The key management task here is looking outside and toward the future. Prediction or, as we would say, ‘strategic foresight.’ It is linked to System Three through tight feedback loops that settle the issue of balancing potential against the actual capacity of the organization. Here we find governmental departments of health, disease control, and research institutes. Most enterprise failures occur when System Four fails to test its anticipated actions against a model of correct overall functioning – COVID19 pandemic.
System Five System Five concerns itself with managing the identity and sustainability of the enterprise. This is the ultimate arbiter of questions and the wellspring of a sense of purpose. Systems One, Two, and Three struggle to maintain homeostasis; Systems Four pushes toward new directions. This fundamental organizational tension must be reconciled -System Five does that. This system contains a unique element that Stafford Beer has termed algedonic, where signals coming from System Ones are sensed to be alerting danger. The healthcare industry in the US can be seen to be deficient in its ability to process algedonic signals such as politicizing a public health crisis.
Application of the VSM
When you review the central tasks that each system in the VSM is supposed to be responsible for, it seems to make sense that all of them need to be happening in a successful organization. VSM makes visible those mysterious organizational processes that are ingredients of viability. A strong point of the VSM is its use in identifying the information-flow links among elements of an organization. A quick check concerning the existence of these can prove to be a powerful diagnostic. Do we have unimpeded connections across all systems in healthcare?
For example, what would happen if System Three were not present in an organization? This internal audit feedback loop from corporate to an operational unit is usually the province of the accounting corps. It is easy to predict what would happen if no financial audit procedures were in place in an organization—in our example, balancing cost of prevention like vaccines and masking against hospitalization cost – both short and long term.
Perhaps the most glaring problem today in American healthcare is the lack of a clearly defined System Five. This top-level system needs to incorporate a model of the entire system, develop and articulate a vision, and overall give a sense of purpose while responding to signals of alarm and pain. The utility of the VSM, as with any other mental model, is to provide the practitioner another tool to use in helping leaders develop a clearer understanding of what’s really going on.
Next, in Part 3, I will propose a quantitative diagnostic protocol to measure the systems fault lines before they fail and collapse occurs. I will also combine this with contemporary applied economics to prescribe managerial interventions.
Tanita take us out:
1 Abstracted from “The Digital Workplace” Grantham, C.E. (1993), VanNostrand Rhienhold: New York