Viable Organizations with Beer

by Ray Arell

I am a strong believer that sound organizational models are the key to a company’s success and its viability in the complex world in which it must survive.

In the case of companies, the key ingredients in the organizational design are sometimes lost and the structures that are created don’t meet the test of a viable system. This leaves it prone to avoidable mishaps and loss and makes it slow to respond to change when needed.

What is a viable system?

A viable organizational system, as defined in Beer’s work, is fractal and recursive in nature. In fact, traditional hierarchies that you may work in today are fractal. First level teams typically report into higher-level teams that span out in size to accomplish something larger that can’t be done by just one team. Each staff has at least one person, typically a manager, who is responsible for consolidating status and taking direction from the next higher-up structure. The lowest level teams in the hierarchy are responsible for direct delivery of customer value and the highest is responsible for more of the strategic direction of all the teams under it. Aside from different responsibilities, they all relatively look the same regardless of what team you join.

Fractal is only one part that makes the organizational system viable. A VSM team is tightly coupled to stakeholders and the ecosystem/market segment it is maneuvering within. The VSM calls out a set of common subsystems that each team implements to accomplish the delivery of value to its stakeholders. This includes subsystems that accomplish the daily value delivery, balance what is needed today versus what is needed in the future, amplify and dampen goals depending on ecosystem needs, and strategically identify threats and opportunities in the ecosystem it is focused on. This combination of subsystems gives each team a greater level of concentration and situational awareness, thus tooling it to be able to maneuver independently and interdependently within its charter.

This is the overall structure of a VSM that makes up each individual team. These teams can be combined to make up a group, division, or company depending on the needs. Before talking about that aspect, let’s explore the key heuristics/patterns that make up each team.

The subsystem patterns of a VSM

The first subsystem handles the “here and now.” In other words, this is where the tactical value delivery to the stakeholders happens. This is the part of your team, regardless of delivery method, that is amplifying the delivery of things that stakeholders need while dampening the delivery of things that don’t.

The second subsystem handles the “there and then.” This is the strategic subsystem that is looking further down the road to identify threats that could slow down the first subsystem. Things like running out of resources, missing skills, or maybe competitive threats. It also looks for opportunities that can be exploited in the future, or to possibly pivot to, if they offer a higher return on investment.

The next key system coordinates between the first two systems. For example, the tactical system is focused on the overall daily value being delivered to the stakeholders, but, because of this focus, they may be blind to risks or other potential threats when performing that delivery. The strategic system is periodically probing the ecosystem looking for threats and amplifying concerns to the tactical system in order to mitigate those risks. Also, the tactical system is continuously updating the strategic system on things impacting or accelerating the delivery. It also provides critical stakeholders feedback that can be used to maneuver the team to the most viable area in the ecosystem to deliver overall higher value.

Viability and resilience are built with each team having internal systems that balance and coordinate the “here and now” with the “there and then.” The last key system is balancing the strategic system with the tactical system to the purposes, priorities, and policies of the team, group, or entire company. The team’s charter gives the team focus and is the key to keeping things in balance. All decisions are balanced against the charter. For example, if an opportunity is found but it is not within the focus of the team it may decide to amplify that opportunity to a unit that does have that focus. It could also expand, pivot, evolve, or undergo exaptation to swarm on better opportunities as the market shifts or matures.

Applying VSM in your company

Applying VSM is about creating independent teams that can be easily linked together to accomplish a larger goal. Getting existing teams to behave as viable systems is not really that hard and does not require additional resources. It just takes a bit of work to clarify charter and roles while implementing the VSM patterns.

For the past decade, I have built my teams with the VSM patterns. If the team had a small charter and focus, the responsibilities of the manager are focused on the “there and then” while the members of the delivery team are focused on the “here and now,” and as a staff run processes to ensure coordination and balance. In larger systems, one member of the team would also be responsible for the balance and coordination with other adjacent or higher-level teams. Delivery of larger solutions typically links teams in a hierarchy with a common high-level charter where each delivers an ingredient into a larger solution.

In all cases, each team, regardless of level, is interacting and gathering knowledge about the ecosystem market. So it is important to implement ways of capturing and sharing the insights and knowledge of the teams, making it easier to see market trends and to recharter and shift teams to a place of higher value as needed.

Structured for cunning business agility

Stafford Beer’s Viable System Model is by no means the only organizational model you can use. I find it to be the one that I keep in mind as I am doing organizational design due to its capabilities. The key point to remember is that this group of patterns makes it easier to reorganize, grow, shrink, etc. It is also patterned after how we as humans have remained viable for 200,000 years. Making each level of your company a viable system-delivering, learning, and adapting to build a successful company.

Supporting Agile Adoption Workgroup and the Agile Coaching Network

This is an Agile Alliance community blog post. Opinions represented are personal and belong solely to the author. They do not represent opinion or policy of Agile Alliance.

Originally published at https://www.agilealliance.org on January 7, 2020.

Agile Alliance is a nonprofit global member organization, supporting and serving the Agile community since 2001. AgileAlliance.org