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The VSM provides, what everybody needs

For a very long time, the horizontal and vertical division of labor was the basis for the breakdown of economic endeavors. The lack of availability and the slow flow of information required many handover points to propagate the intentions of the management and to create transparency of the business. At the same time, the tasks, authorities and responsibilities were designed in such a way that the actual value creators could fulfill their tasks without understanding the big picture. With the introduction of computers and their interconnectedness nowadays, all parties involved can reach the relevant information wherever and whenever, without the need for additional coordination expenditure. Since the companies reached the end of the one-way street of reducing costs, they are looking for new approaches, e.g. Holocracy, Platforms, Agility, Connected Company, etc. Although, there is already an approach available for a long time that fits perfectly with today’s requirements – the VSM.

The Viable System Model (VSM) describes the setup of a viable distribution of tasks. Stafford Beer introduced this model as early as 1959 in his book Cybernetics and Management. The VSM is part of a new view that has been developed for decades under the term System Thinking in the shadow of classical organizational theory. In this article we start looking at the model in general. Henceforth there will be more blog posts on this.

  • System 1 – Value creation (S1)
    In this area subsystems generate the deliverables. The products are manufactured respectively the services are executed. There is a direct contact with the environment, for example with the customers, the suppliers, and partners. This is where the value-adding activities take place. Each of these units is by itself a VSM with the corresponding components. In the new approaches these would be the sub-circles, the producers, the agile teams or the pods.
  • System 2 – Harmonization (S2)
    The value creation takes place in a small „company” (S1a) that behaves autonomously and self-organized. So that the individual subsystems interact, it is necessary to agree on the scope, the functionality and the interfaces. The vague exchange of information of the new approaches is made more specific in the VSM.
  • System 3 – Coordination (S3)
    Even though the everyday interaction in the S2 is harmonized, there is still a need in the here and now to focus on the big picture. For this purpose, the means to be used, the responsibilities and decisions are here made and disseminated in the operational units. Besides S3, an independent unit (S3*) is available in order to collect information that reflects the current state of the value creation as unspoilt as possible. The new approaches coordinate with, for example, backlog refinements and daily scrums, interaction platforms and governance.
  • System 4 – Alignment (S4)
    The company is constantly on the move in a direction that should be determined. This adjustment is influenced by the opportunities that arise in the environment. The direction of the company is determined by the leadership based on the new technical solutions that will be incorporated into future deliverables and on market opportunities that emerge. The insights will then be digested into a strategy and the associated planning that have an impact on all areas, including the development of employees and executives. In the new approaches, the alignment is left to the acting people.
  • System 5 – Final instance (S5)
    The areas of tension between the present (S3) and the future (S4) as well as between the company and the environment can not be resolved in Systems 1- 4. The last authority for such dilemmas makes the decisions that prevent the company from being damaged by its different internal interests. In contrast, the new approaches are based on a natural resolution of disputes through transparency and open exchange of positions.

Bottom line: Companies can not avoid putting themselves in a position that serves their purpose. The division of labor that eventually has a henchman performing simple activities dissolves. These same processes can nowadays be performed by machines and robots. The cascade for the distribution of information is also no longer needed due to the pervasive availability. As a result of the increasing digitization, there is a need to re-position the own company. The VSM provides, what everybody needs, since it allows realizing the bundling of tasks, authority and responsibility in one hand at the point of action as well as the agilization of lumbering companies.

BMX – the ideal metaphor for agility

Bicycles are a good example of how everything is becoming more and more fragmented. Here a small change and there a new principle and I already have a recumbent that connects a relaxed seating position with even therapeutic effects, increases safety and lowers the effects of accidents. The so-called track bicycle is designed to turn consistently fast laps – without brakes and gear shift. Due to the support of an electric drive, more and more people have rediscovered the bicycle, the e-bike. The technical possibilities are brought to the limits with the BMX bike – special materials and everything that increases the stability of axles, fork, crank and pedals.
The BMX bike shows its strengths in any terrain, in the city and in the hall. The riders master their bikes in all imaginable situations – halfpipes, stairs, and mountain tops and in the forest. This makes BMX (Bicycle Motocross) the ideal metaphor for agility.

However, the benefits of the BMX bike do not automatically make it the best bike for all applications. The same applies to agility in the company. Agility is hard to get working in the following cases.

  • Governance is binding
    The corset of rules and standards take companies the creative breath away. There is no room for agility, as innumerable external and internal regulations must be followed. The agile employees run the risk to break one or the other law out of ignorance – which of course constitutes misbehavior of the employee. Imagine a BMX rider worrying about compliance – and agility is nipped in the bud.
  • Processes set a stable framework
    The procedures are the determined steps for the most effectual action. Doing the right thing right is the corresponding mantra. After many years, these processes have been buried deep into a company. Always the same procedure can be handled in the shortest possible time with the least effort. Special cases bounce off the crash barriers and are therefore made impossible. Let’s imagine a BMX rider on a highway – and his willingness to bring in agility evaporates.
  • Hierarchs will not let go
    Big companies have a natural tendency to build a hierarchy. The officials receive special privileges – selected rewards and insignia of power (e.g., company cars, assistants, bonuses). They should make decisions, lead others and be responsible for the results. If you leave the task, the authority, and responsibility to the employees, it leads to fear of loss of the bosses, because they do not recognize what would continue to justify their status. Imagine a BMX rider who has to get permission to change direction – and all the manifestations of agility disappear.
  • Micro managers strive for total control
    A more complicated special case are the micro managers, who interpret their task in such a way that they have to influence everything down to the smallest detail (see also here). Cutting a long story short: Imagine the BMX rider with someone who constantly grabs the wheel – and already the agility lies on the ground.
  • Who doesn’t act at all makes no mistakes
    It is clear that the big companies counteract the image of the business servant. The path of least resistance is the result of our natural anxiety that is deeply rooted in our brain stem. There are many arguments to avoid acting and thereby making no mistakes – except perhaps the mistake of doing nothing. If one is then required by superiors to act in a certain way, they have the responsibility. Imagine a BMX rider who is afraid to fall – and immediately any potential for agility freezes.

Bottom line: Of course, everybody wants the autonomous, self-employed, risk-taking employee, who would not be much different than a BMX rider. At the same time, the path in which the riders should move is cemented with regulations. On the flag is written agility. However, the conditions are against this approach. Strict governance limits the leeway. Processes and their IT implementations determine every step. The leaders are not ready to let go and involve themselves at all levels. The employees have found their workaround – around the work. Agility can not function with these conditions. Just as a BMX rider can not act properly in a straitjacket. Since BMX clarifies the boundaries of the entrepreneurial actions of individual employees, BMX is the ideal metaphor for agility.