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ORIGINAL PAPER A Set of Conventions, a Model: An Application of Stafford Beer’s Viable Systems Model to the Strategic Planning Process John Stephens Tim Haslett Published online: 12 March 2011 Ó Springer Science+Business Media, LLC 2011 Abstract In contemplating better ways to manage, Stafford Beer says the big problem is that you are not determining absolute facts: you are establishing a set of conventions. Hence his view, that a model is neither true nor false: it is more or less useful. And while this paper suggests Beer’s Viable Systems Model (VSM) is overwhelmingly more, rather than less useful, that the VSM and its founding theories are virtually unknown at the level of everyday management begs the question, why? Over time we have learned about the usefulness of the VSM compared to other management theories, when used in the contest of the organisational strategic planning process. Thus through a sequence of diagrams based on Beer’s original drawings, we show how the VSM came to underpin a process for strategic planning in one organisation. The paper has three aims; to attach an everyday ‘common speak’ understanding to some of Beer’s work, to demonstrate how we have learned to appreciate the usefulness of the VSM and its associated diagrams and con- ventions and to suggest a link between the Action Research change methodology and Beer’s work. Keywords Management Á Action research Á Stafford beer—viable systems model Á Ross Ashby—law of requisite variety Introduction In investigating better ways to manage Stafford Beer (1985, p. 2) says the big problem is that ‘you are not determining absolute facts: you are establishing a set of conventions’. ‘So This paper was the foundation of a presentation made at the 53rd Meeting of the International Society for the Systems Sciences (ISSS)—Making Liveable, Sustainable Systems Unremarkable. University of Queensland, Brisbane, Australia: July 12–17, 2009. J. Stephens (&) Á T. Haslett Greyhound Racing Victoria, Melbourne, VIC, Australia e-mail: [email protected] T. Haslett e-mail: [email protected] 123 Syst Pract Action Res (2011) 24:429–452 DOI 10.1007/s11213-011-9194-8
Transcript
  • ORI GIN AL PA PER

    A Set of Conventions, a Model: An Applicationof Stafford Beers Viable Systems Modelto the Strategic Planning Process

    John Stephens Tim Haslett

    Published online: 12 March 2011 Springer Science+Business Media, LLC 2011

    Abstract In contemplating better ways to manage, Stafford Beer says the big problem isthat you are not determining absolute facts: you are establishing a set of conventions.

    Hence his view, that a model is neither true nor false: it is more or less useful. And while

    this paper suggests Beers Viable Systems Model (VSM) is overwhelmingly more, rather

    than less useful, that the VSM and its founding theories are virtually unknown at the level

    of everyday management begs the question, why? Over time we have learned about the

    usefulness of the VSM compared to other management theories, when used in the contest

    of the organisational strategic planning process. Thus through a sequence of diagrams

    based on Beers original drawings, we show how the VSM came to underpin a process for

    strategic planning in one organisation. The paper has three aims; to attach an everyday

    common speak understanding to some of Beers work, to demonstrate how we have

    learned to appreciate the usefulness of the VSM and its associated diagrams and con-

    ventions and to suggest a link between the Action Research change methodology and

    Beers work.

    Keywords Management Action research Stafford beerviable systems model Ross Ashbylaw of requisite variety

    Introduction

    In investigating better ways to manage Stafford Beer (1985, p. 2) says the big problem is

    that you are not determining absolute facts: you are establishing a set of conventions. So

    This paper was the foundation of a presentation made at the 53rd Meeting of the International Society for theSystems Sciences (ISSS)Making Liveable, Sustainable Systems Unremarkable. University of Queensland,Brisbane, Australia: July 1217, 2009.

    J. Stephens (&) T. HaslettGreyhound Racing Victoria, Melbourne, VIC, Australiae-mail: [email protected]

    T. Haslette-mail: [email protected]

    123

    Syst Pract Action Res (2011) 24:429452DOI 10.1007/s11213-011-9194-8

  • remember: a model is neither true nor false: it is more or less useful. In this light, we

    believe Beers Viable Systems Model (VSM) presents a set of conventions that are

    overwhelmingly more, rather than less useful. But if this is so, why are the VSM and its

    founding theories and conventions virtually unknown of and/or unused at the level of

    everyday management?

    We think the (hefty for most) task of grasping even a rudimentary understanding of

    Beers intricate, idiosyncratic lexis, used predominantly in the first two of his better known

    headline trilogy1 is a reasonable place to start. For here on one hand, grasping an insight of

    both the words and interdisciplinary theory that underpins Beers useful model is not

    easy. However on the other hand, amid the Beer lexis, lie some relatively easy to make

    sense of diagrams. The diagrams have pivotal conventions which we think, usefully pro-

    vide for better approaches to everyday management. Thus, to spur rather than shun any

    detailed exploration of the Beer genius, we present a sequence of sixteen management

    diagrams which have evolved for us during a long term Action Research project.

    This paper has three aims. The first is to attach an everyday common speak under-

    standing to some of Beers work. The second is to demonstrate how we have learned to

    appreciate the usefulness of the VSM and its associated diagrams and conventions. Finally,

    we suggest a link between the Action Research change methodology2 and Beers work.In this light, those perturbed by the Beer lexis may draw breath knowing that while our

    diagrams are inspired by Beers original drawings, clearly, the masters hand is matchless.

    Thus our approach does not demand an intricate understanding of Beers lexis but rather,

    illustrates the practical use and/or adaptation of such diagrams.

    By way of background the particular organisation in focus, Greyhound Racing Victoria

    (GRV) is clearly a viable system.3 It has thirteen greyhound clubs as operational com-

    ponents. GRV and its clubs are therefore analogous to other viable systems; parent bodies

    with operating franchises, education systems with schools, petrol companies with service

    stations outlets. At GRV various management sub-systems correlate with functionalities

    of; the Board, the CEO and Senior Managers, Senior Management departments (finance,

    marketing, technology and human resources etc.), the registration and naming of grey-

    hounds, race programming and integrity services and so on. Individual clubs have com-

    parable structures to GRV, consisting of various sub-systems operating within their own

    viable systems. Thus the clubs manage their racing and training operations within niche

    communities of localised breeders, trainers and owners, suppliers and workers.

    Our work targets upper levels of everyday management however, pursuant to its

    founding theory; the fundamental conventions of VSM should apply at differing hierar-

    chical levels, in all organisations. For this reason, our diagrams begin at an elementary

    standard and aggregate for use at higher levels of organisational complexity.

    The first eight diagrams are simple. Via PICCO4 they engender a primal understanding

    of Viable Systems Diagnosis (VSD) and the Viable Systems Model (VSM)5 and some of

    1 Brain of the Firm (1972), The Heart of the Enterprise (1979), Diagnosing the System for Organizations(1985).2 We take Checklands (2000, p. 36) a succinct account of method and methodology. A methodology is at ameta-level with respect to a method. Methodology is a body of methods used in a particular activity.3 Organisational viability (Beer 1985, p. 17) is the ability to maintain a separate existence, albeit within adynamic environment.4 PICCO, an acronym for Policy, Intelligence, Control, Coordination and Operation (Stephens and Haslett2002a, b; 2005a, b; Stephens 2007) is a hybrid template derived from the VSM.5 The VSM is a model whereas VSD is a process.

    430 Syst Pract Action Res (2011) 24:429452

    123

  • their important conventions. With absolute respect to Beer, we think the simplicity of

    PICCO is required for three, albeit significant reasons. The first is that the fundamental

    conventions associated with these diagrams need to be comprehensible for a broad range of

    employee competency levels. The second is that particularly in regards elementary

    employees, diagrams need to be useful rather than absolutely truthful. The third, in keepingwith the first two reasons, is that our employees seem to relate better to one sequence of

    diagrams. Thus, in accord with Argyris and Schon (1974) our employees consciously6 use

    the diagrams and PICCO to learn and manage their responses to contextual organisational

    issues.

    The next six diagrams are specific to our strategic planning processes. They are

    applicable for higher levels of management. Nonetheless, their thinking recursivity7 might

    be applied at all levels, in any organisation.

    The final two diagrams are really for Action Researchers. They aggregate all of the

    conventions, approaches and theory-bases that have contributed to the preceding diagrams,

    and associate the theory based method PICCO at many levels of recursion, within emergent

    action learning frameworks.

    Finally, perhaps demonstrating the value and usefulness of our work we provide

    information about GRV performance over time (see above). Thus, while we do not suggest

    any direct causation here, in seeking some form of quantification of organisational pro-

    gression, the GRV Board had resolved that our overall AR [conducted between FY

    20012005] should be tangibly reviewed in conjunction with shifts in Key Performance

    Indicators (KPI) over time. The most significant KPIs for GRV are first, market share8

    (betting turnover as compared to the other codes) and second, annual growth. Other

    important KPIs include; financial contributions to clubs which provides for their opera-

    tions and stake money and, overall industry liquidity which provides for short term

    maintenance and longer term infrastructure developments. All of these KPIs have

    Table 1 GRV KPIs versus VRI for reporting period (SourceGRV annual reports 20012005)

    Key statistics for financial years (FY) 00/01 01/02 02/03 03/04 04/05

    GRV off course turnover ($m) 372.6 400.4 429.9 466.1 509.4

    GRV % increase in off course turnover 8.4 7.7 7.4 8.4 9.3

    RVL % increase in off course turnover 4.0 4.7 3.5 3.1 4.4

    HRV % increase in off course turnover 2.4 3.4 5.4 7.0 6.1

    GRV % market share 13.9 14.2 14.6 15.2 15.7

    RVL % market share 71.1 70.9 70.4 69.5 68.8

    HRV % market share 15.1 14.9 15.0 15.4 15.5

    GRV total income ($m) 27.6 30.5 30.4 32.5 35.2

    Prize money to participants ($m) 14.8 15.9 16.7 16.7 18.5

    6 Argyris and Schon (1974) organisational learning is the logic that learning is a primary process affectingthe way in which successful organisations consciously learn and manage their responses more successfullythan those who do not.7 In a recursive model a viable system always contains and is contained in another viable system. Hererecursivity is used in the sense that as a thinking process (rather than a viable system) PICCO alwayscontains and is contained within another thinking process.8 The overall Victorian Racing Industry (VRI) comprises Thoroughbred (RVL), Greyhound (GRV) andHarness (HRV) jurisdictions.

    Syst Pract Action Res (2011) 24:429452 431

    123

  • meaning because they relate to key elements of the GRV mission statement. Their col-

    lective determination hence may signify some accountability of overall performance.

    Importantly the cited trends of the reporting period have continued to this day. However

    clearly, rather than suggesting these figures may empirically demonstrate the usefulness of

    our work, we prefer to think that our AR has not disadvantaged performance at GRV. In

    other words, our diagrams are neither true nor false: they are more or less useful (Table 1).

    A Sequence of Sixteen Management Diagrams

    Management Diagram 1: Thinking About Management Principles

    In keeping with Argyris and Schon conscious learning nothing will come from

    doing nothingwith apologies to William Shakespeare (King Lear)

    For employees being introduced to some basic principles of management (and perhaps

    the strategic planning process for the first time) Diagram 1 is a useful template. This is

    because employees need not know the theoretical underpinnings of the diagram, or why

    certain management conventions apply at all hierarchical levels, in all organisations. But

    they do need to think about how the diagram and its conventions relate to particular

    operational systems. That is, via the diagram, individuals think about how they manage in

    the workplace. In this context we find the Beer (1959, p. 39) term purposive9 resonates

    well at various levels of employee competence. In a primal sense, Beers (1985, p. 20)

    purposive operational systems are operations that in total produce the system-in-focus

    whatever that might be. Hence, an advantage of starting with individual employees is that

    the principle of hierarchical decision making; from individuals to sub-groups, from sub-

    groups to Boards, from Boards to higher authorities (as likened to a favourite Beer10

    metaphora set of Chinese boxes or Russian dolls wherein each is contained within the

    next) quickly makes sense.

    M

    O

    We aim to manage (M) some purposive operation - (O)

    It is not uncommon for managers to think that they can manage their operations in a somewhat closed existence

    Managers need to thinkabout how open or closed their operational systems might be

    Diagram 1 Thinking aboutmanagement principles

    9 A purposive system is one organized to achieve some end, its aim is to do what it does.10 Beer (1979, p. 118).

    432 Syst Pract Action Res (2011) 24:429452

    123

  • Table 2 is not rigorous. From an introductory perspective, its simple aim is to surface

    some useful words and phrases about everyday management. The theory base column is

    indicative only.

    Management Diagram 2: Management of Operations Involves Recognition

    that the Controller is Part of the System that is Under Control

    A model is neither true nor false: it is more or less usefulBeer (1985, p. 2)

    Everyday employees may first view their locus of operational control from a somewhat

    cocooned or closed system perspectiveI work in this section, of this place, and nothing

    else matters. Hence conventions such as (a) Beers (1972, p. 25) axiom the first principle

    of control is that the controller is part of the system under control and (b) the thought of

    control emanating as operational feedback, are not likely to be (initially) well understood.

    Diagram 2 illustrates an essential conventionthe feedback loop.

    Table 2 Thinking about management principles

    Issues that may surface with everyday employees Commonsense thinking foreveryday employees

    Indicative theory base(if deemed necessary)

    Thinking about management may not be common inthe everyday workforce

    Understand that problemsoccur as part of everydaywork life

    CognitionSocio-technical

    Organizing more effectively must be a better way togo

    A new, better tactic may assist Cybernetics

    Those with management training may experience agap between what the textbooks say and whatactually occurs in practice

    There has to be a better waythan juggling how best youcan

    Open and closedsystems

    Systems thinking

    To manage better you need to start with somewhere Doing something is betterthan doing nothing

    Organisationalknowledge creation

    A template which links theory to practice is handy A template may provide forconsensus of understanding

    System dynamicsSoft systems

    methodology

    M

    O

    Managers control some aspects of their purposive operations.

    These operations provide feedback - managers need to learn from their operations

    Think about the feedback that you get from your operations

    Diagram 2 Management of operations

    Syst Pract Action Res (2011) 24:429452 433

    123

  • Table 3 is also not rigorous. Its aim is to surface some further words and phrases which

    may come to assist in employee thinking at differing hierarchical levels. The theory base

    column is again indicative only.

    Management Diagram 3: The Interaction of Management, Operations

    and the Environment (E)

    Homeostasis, the stability of a systems internal environment despite the systems

    having to cope with an unpredictable external environmentBeer (1985, p. 17)

    We find that when employees grasp the concept of operational feedback, their con-

    sciousness of interactions with a wider environment become more apparent, or in the least,

    it is more readily acceptable. However, clearly this proposition may require further

    investigation.

    With the inclusion of the environment (as in Diagram 3) employee thinking becomes

    less closed and less focussed on internal environmentsan acceptance of (a) a number

    We often think that we can manage at the RHS of an imaginary line. We close ourselves off from E. We think that we can absolutely control our operations and we may become agitated if our operations go out of control.

    Think about how a manager might become smart enough to turn up or turn down operational variety

    M

    O

    E

    Diagram 3 The environment, management and operations

    Table 3 Management of operations

    Issues that may surface witheveryday employees

    Commonsense thinking for everyday employees Indicative theory base (ifdeemed necessary)

    What is a closed (asopposed to open) system

    Can your operational system be a separateidentity, independent of other existences?

    Operational systemsCognitionOrganisational behaviour

    What is operationalfeedback

    Actions, reactions, learning from outcomes Operational researchOrganisational behaviour

    How might I control myoperation better?

    You have influence on the operation, as well thereare as responses from the operation

    You as controller are part of the system undercontrol

    Organisational structureCyberneticsVSD (Beer 1985)

    434 Syst Pract Action Res (2011) 24:429452

    123

  • and (b) a variety of management systems emerges. The concept of operational systems

    being stacked or embedded within each other (the recursive dimension as previously

    described) also becomes clearer. Thus a new mindset encompassing M, O and E as

    involving unpredictable, tripartite interactions may become part of everyday organisational

    thinking. Here variety11 might initially be interpreted by employees as a nuisance factor

    that raises its head only when their operations tend to go out of control. Table 4 thus

    follows our non-rigorous approach to some further words and phrases which may also soon

    become common to employees. While the theory base column is again indicative only,

    here it is specific to the Laws of Requisite and Residual variety.

    Management Diagram 4: All Levels of M Exhibit Control

    The big problem is this: you are not determining absolute facts: you are establishing

    a set of conventionsBeer (1985, p. 2)

    Diagram 4 presents an important amalgam of the management conventions introduced

    so far, and some rudimentary relationships common within strategic planning processes. At

    this stage, employees first grasp the concept of system variety (perhaps through experi-

    encing operational tension or confusion) as a measure of complexity, or the number of

    possible states that their organisational system might have and how filters such as leg-

    islation and strategy may affect that complexity.

    Table 5 follows our non-rigorous approach to some emergent words and phrases.

    Beers (1985, p. 45) second Principle of organisation involves a time base. It says that

    the four directional channels12 which carry information between M/O and E/Omust each

    Table 4 The environment, management and operations

    Issues that need to besurfaced with everydayemployees

    Commonsense thinking for everydayemployees

    Theory base (if deemednecessary)

    Environment An internal environment having to cope withan unpredictable external environment

    Ashbys (1956)law ofrequisite variety

    Conant and Ashby (1970)law of residual variety

    Homeostasis Keeping your operation under control throughself regulation

    General systems

    Open system Operational systems cannot survive in avacuum

    Open systems

    Recursion Stacks of viable systems that always containand are contained in another viable system

    Set theory

    Variety Complexity in the number of states whichmight apply to your operation

    Cybernetic approachesVSD (Beer 1972, 1979,1985)

    Management scienceBeer(1967)

    Variety dial How a manager might become smart enough toturn up or turn down operational variety

    Ashbys (1956)requisitevariety

    11 Beer (1985, p. 35). Variety is a measure of complexity: the number of possible states of a system.12 For clarity, this means attenuation and amelioration between E and O and also between O and M (via theregulatory centre).

    Syst Pract Action Res (2011) 24:429452 435

    123

  • have a greater 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.

    Beers second Principle can be simplified into at least two different and useful perspec-

    tives. One is that managers need to organise themselves so that they have sufficient time toconsider all information, before committing it to a strategic direction. The second is that

    they need to have competencies that enable them to make sensible decisions about that

    Tension - Confusion

    M

    O

    Strategy Budget Policies Rules Regulations

    Think about how we like to be in control of our operations. We begin to understand that we impose conditions such as legislation, value systems,

    strategies and budgets to take unwanted variety out of our operations. The environment provides us with external intelligence that influences our

    behaviours

    E

    Legislation Society values Value systems Suppliers Unknowns

    Tension - Confusion

    Tension - Confusion

    Diagram 4 Major and minorcontrol

    Table 5 Control

    Issues that need to be surfaced witheveryday employees

    Commonsense thinking foreveryday employees

    Theory base (if deemednecessary)

    Varitymay be practicallyexperienced as tension and confusion

    Managing complexityDirectional channelsHandling high varietyEnhancing low variety

    VSD, attenuation, amelioration(Beer 1972, 1979, 1985)

    Planning templates to lessen orincrease required complexity(variety)

    Budget, strategic planning, laws,conventions, value systems

    Organisational theoryOperational researchCybernetics

    Controlling variety to maintainviability

    Only variety can absorb varietyHomeostasisBecoming smarter than the

    situation we are managingA variety dialabeing able to

    turn up, or turn down variety

    Requisite variety (Ashby 1956)Residual variety (Conant and

    Ashby 1970)General systems (Homeostasis)

    a This new view of Beers work emerged from our assessment of Diagnosing the System (1985)

    436 Syst Pract Action Res (2011) 24:429452

    123

  • information. That is in everyday workplace terminology, they need to be smarter than thesituation they are managing.13

    Management Diagram 5: Thinking About Thinking is Difficult

    A mans mind stretched by a new idea will never return to its original stateOliver

    W Holmes

    Here we divert from the Beer based diagrams (Diagram 5) and consider the Four Stagesof Competency model which we attribute to Gregory Bateson (1973). This is because weare now getting away from the domain of everyday employees and entering the hierarchy

    of more senior management. Hereour experience suggests that managers are (increasingly)

    likely to have a tertiary qualification, but not necessarily in the disciple of management.

    The reasons for introducing this diagram at this stage are three fold. One is to assist this

    type of employee in thinking about their specific thinking processes and cognition in

    general. The second is to enable such employees to gain a better understanding of how the

    overall strategic planning process may be seen to evolve. The third is that we find Bate-

    sons model assists such employees in the linkage of the everyday issues and approaches

    that have been employed so far, to the referenced theory-bases.

    Management Diagram 6: PICCO

    A tentative road map, still indistinct and abstract, a target to which the organisation might

    aim to become generative. It is not a destination, but a never-ending journey. It is part

    fantasy, part psychology, and part struggleWatkins and Golembiewski (1995, p. 99)

    In returning to Beer, the aim of the sixth management diagram (Diagram 6) is to

    introduce this higher level of management [say a group of operational managers or an

    CI

    Consciously Incompetent

    CC

    Consciously Competent

    UI

    Unconsciously Incompetent

    UC

    Unconsciously Competent

    CO NS C I O U S N E S S COMPETENCE

    Stage One Unconscious Incompetence (UI)You are unaware that you have incompetence in a chosen area

    Stage Two Conscious Incompetence (CI)You learn and become aware of your incompetence in a chosen area

    Stage Three Conscious Competence (CC)You become aware of your competence in the area. You know what you are doing and you realize what you have learned

    Stage Four Unconscious Competence (UC)You do things and achieve in the chosen area without thinking about it. The process of learning is/has become of second nature natural to you

    Diagram 5 Four stages of competency (attributed to Bateson 1973)

    13 Dr. John Bartoninformal discussion Monash University 2002.

    Syst Pract Action Res (2011) 24:429452 437

    123

  • internal organisational Senior Management Team (SMT)14] to a quite distinctive template,

    PICCO. Based on VSD, PICCO is a suggested road map that may build on the sort of

    thinking that underpins the first five diagrams. However, to facilitate where we go from

    here, it is necessary to provide a briefing (follows) on the particular organisation in focus,

    Greyhound Racing Victoria (GRV) where the operational components are thirteen grey-

    hound clubs.

    GRV and its clubs are similar to a company with franchise stores or an education system

    with various schools etc. Here sub-systems [S5S2] correspond to the management at GRV

    headquarters. S5 is the GRV Board, S4 is the CEO and SMT, S3 is the various SMT

    departments (finance, marketing, technology and human resources etc.) and S2 is the

    registration and naming of greyhounds, race programming and integrity services and so on.

    Each individual club has a comparable structure to GRV, consisting of the five essential

    sub-systems within their whole viable system. The clubs manage their racing and training

    operations within their own niche community of localised breeders, trainers and owners,

    suppliers and workers. All clubs, as subsets of GRV could therefore develop individual

    VSMs with their own clubs as the particular system in focus.

    The PICCO anagram was formulated independently, but coincidentally with the same

    names, for the five systems as used by Espejo et al. (1996).15 Unfortunately, in the early

    introduction of the PICCO template, we find that employees may take it to represent a

    totally ordered and sequential process. That is, you start at S1 and progress sequentially

    (maybe spending equal time) through each system as you progress to making S5 policy.

    SYSTEM 5 [S5]: The part of the organisation which ultimately determines the strategic Policies that GRV will follow

    SYSTEM 4 [S4]: The engine room of the Brain. The Intelligence, the gathering of information through connection with the world outside of greyhound racing. Intelligence looks at providing information for planning, forecasting and predictive strategy for GRV

    SYSTEM 3 [S3]: The floor or base of the organisational Brain. A system that Controls the complexity of the organisational muscles and organs (the clubs) in system one and maximizes the inner functionality of GRV. S3 is often split to show the S3* audit system as a functioning operational feedback loop

    SYSTEM 2 [S2]: A system that oversees and keeps an eye on the clubs, a system that stabilizes their interaction. Identified by Beer as the sympathetic nervous system, it Coordinates or calms down any fluctuation or inconsistency in the (club) operating systems

    SYSTEM 1 [S1]: The GRV muscles and organs. The bits of GRV (clubs) that actually do things they run race meetings. They provide for the fundamental activities of the system. They can be described as the Operations that make GRV tick

    Diagram 6 The five systems that underpin PICCO

    14 A SMT might comprises CEO, Finance, IT, Marketing and various other departmental managers.15 Our reviewer says that Beer disagreed with Espejos (and hence our) interpretation and way of namingthe five systems.

    438 Syst Pract Action Res (2011) 24:429452

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  • While such a stance does not deliver devastating bad results per se, they eventually learnthis is notionally incorrect (for both PICCO and the VSM).

    However, by introducing the simple concept of five interconnecting subsystems, Policy,

    Intelligence, Control, Coordination and Operations as PICCO, we find that almost

    immediately three things happen. One is that that higher levels of management (here the

    Club managers, the SMT and/or a Board16) are able to focus on the template as one valid,

    useful and straightforward approach to better management at GRV.17 The second is that

    some ownership of the PICCO approach takes place. The third is that such higher levels of

    management start to think more systemically about the interactions and iterations that

    occur within the GRV operations. Of course this would normally occur using specific VSM

    theory.

    Management Diagram 7: PICCO and MODE at GRV

    You dont have to be a fantastic hero to do certain things to compete. You can be just

    an ordinary person, sufficiently motivated to reach challenging goalsSir Edmund

    Hillary

    The aggregation of the diagrams so far (albeit a simple reinterpretation of aspects of

    VSM) provides GRV with an underlying philosophy on how to determine the strategies

    that make System One (its clubs)the purposive operation of the organisationviable.Thus a significant management body, like the club managers or the SMT18 (as a path-

    ological viable system) can visualise a snapshot of the organisational strategic planning

    process MODE19 at any given point in time. Diagram 7 therefore considers how MODE

    may be constructed to suit a holistic System One in focus, at one point in time. However,

    the two-dimensional Diagram 7 has two parts.

    For the first part, on the horizontal plane, the purple blob symbolises information that

    comes to MODE in the form of intelligence from the external environment. The green

    circular disc symbolises the compilation of information that comes from all of the

    internal subsidiary parts of the GRV purposive operation. On the vertical plane, the blue

    square symbolises the organisational accountability for the content of MODE at a par-

    ticular point in time. The arrows above and below the blue square reveal that MODE

    gathers strategically important information from, varied hierarchical levels, both within

    and without the organisation.

    A reason for the two dimensional depiction in the first part of Diagram 7 is to get the

    Club managers (and the SMT and Board) to think imaginatively, but quite seriously about

    the structure of decision making processes (at the varied levels) that provide information as

    MODE strategies are progressed. When this new thinking occurs, questions such as How

    does GRV arrive at decisions which may influence strategy? or Who decides ultimate

    policy? or Can GRV decision making processes be improved? arise, and the need for a

    second, decision-making process part of Diagram 7 surfaces.

    16 For clarity, the club managers, the SMT and the Board are not viable systems.17 Greyhound Racing Victoria (GRV) is the organization responsible for the overall control of greyhoundracing (at 13 clubs) in the State of Victoria, Australia.18 Senior Management Team (SMT)GRV headquarters comprises the CEO and Finance, IT, Marketingand Racing departmental managers providing support activities for the organisation. For clarity, rather thanbeing viable systems, the SMT provide meta-systemic support to the clubs which provide the product/service of greyhound racing.19 Here GRV organisational strategic planning is termed MODE (Managing Our Dynamic Environment).

    Syst Pract Action Res (2011) 24:429452 439

    123

  • E

    GRV BOARD ACCOUNTABILITY

    O

    M

    OPERATION MODE

    Non - ordered thinking

    (a)

    (b)

    process is used by GRV Board to determine their S5 Policy for MODE in consideration of higher levels of recursion

    Non - ordered thinking process by SMT is used to propose their S5 Policy for MODE from lower levels of recursion (clubs)

    E

    GRV BOARD ACCOUNTABILITY

    O

    M

    OPERATION MODE

    System 5 - Policy Who or what will ultimately make the operational decision? System 4 - just who or what is to gather the required Intelligence? System 3 - Control Who or what is to enable operational self regulation? System 2 - Co-ordination - Who or what is to commence the organization of that operation? System 1 - Operation What does the operation concern?

    Diagram 7 Integration of the two parts, MODE and PICCO at GRV. a Part 1 of MODE. b Part 2 of MODE

    440 Syst Pract Action Res (2011) 24:429452

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  • The second part of Diagram 7 is shown below as a nebulous version of Diagram 6. HerePICCO symbolises a non-ordered thinking process that might apply for any club operation,at any hierarchical level of decision-making. In the most straightforward of cases, PICCO

    could be used to determine S5 Policy at lower levels of recursion on something like the

    purchase of club stationary supplies, but this would not be a GRV organisational strategic

    policy.

    In relation to this lower club subsidiary level of recursion, the accountability of pro-

    posed club S5 Policy is then able to be assessed at GRV Board level by considering

    questions such as Does this proposed club S5 Policy (received as GRV Board S4 Intel-

    ligence) provide for appropriate operational requisite variety? or Has the club been

    smarter than the situation we are trying to managing? If the answer is in the affirmative,

    then this S4 Intelligence is likely to become engrained into the GRV organisation, via the

    Board, quite possibly as S5 Policy. If however the answer is in the negative, then the S4

    intelligence is likely to be sent back for PICCO (re)consideration, so that (the lack of)

    requisite variety might be ameliorated. In other words, the yellow call out notations are

    simply symbolic of PICCO non-ordered thinking processes occurring at various organi-

    sational hierarchies. Some such processes may pull management thinking down to their

    level. Others may impose from above. That is, the PICCO thinking processes occur at

    various levels of recursion.

    Management Diagram 8: PICCO at Differing Hierarchical Levels

    Ecology is the branch of biology dealing with the relationships between organisms

    and their surroundings, including other organismsConcise Oxford Dictionary

    Diagram 8 shows how information contributions to MODE can be interpreted to flow to

    higher hierarchical levels (here the GRV Board), from lower hierarchical levels (the clubs).Thus by employing PICCO as a non-ordered thinking process, employees gain a better

    understanding of how their hierarchical roles unfold in the MODE strategic planning

    process. Diagram 8 is thus designed to relate the use of PICCO for individuals, Clubs/the

    SMT as collectives, and the GRV Board from differing hierarchical standpoints. The

    process is recursive in the sense that as a thinking process, PICCO always contains and is

    contained in another thinking process.

    The Board of GRV using

    PICCO

    Clubs/SMT in GRV using PICCO

    Individuals in GRV using PICCO

    SIS2S3S4S5

    S1S2S3S4S5

    S1S2S3S4S5

    Diagram 8 PICCO recursivethinking

    Syst Pract Action Res (2011) 24:429452 441

    123

  • The bottom loop is shown to illustrate the possibility of how highly specific information

    might flow from perhaps an individual inquiry or consultancy, directly to a Board, that is

    independent of the SMT, but this would be rare. Table 6 follows our non-rigorous

    approach to some further emergent words and phrases.

    Management Diagram 9: PICCO, Subsidiary Viable Systems, Thinking Recursively

    Different systems map onto the same model by sacrificing whatever variety is not

    needed for the purpose at handBeer (1974, p. 49)

    The next six diagrams, specific to the GRV strategic planning process, are applicable for

    higher levels of management. An upper (blue20) and a lower (brown) level of recursion

    have now been added to the first part of Diagram 7 shown earlier. The lower level of

    recursion is the S1GRV clubs. However, while not viable systems per se; the SMT andBoard are also important contributing factors as pathological viable systems that provide

    meta-systemic support to S1, when defining the GRV strategic planning processes

    (Diagram 9).

    Management Diagram 10: Reduplication of a Cybernetic System of Regulation

    What we are doing is to reduplicate a cybernetic system of regulation recursively that

    is over and over again, using the same components with appropriate variety

    adjustmentsBeer (1974, p. 42)

    20 The actual colors are irrelevant. They simply distinguish between levels of recursion.

    Table 6 Words and phrases that have evolved from Diagram 8

    Issues that need to be surfaced with more seniormanagers

    Commonsense thinkingfor more senior managers

    Theory base (if deemednecessary)

    Non ordered thinking processes PICCO VSDBeer (1972, 1979,1985)

    CognitionOrganisational behaviour

    Stability of a systems internal environment despitethe systems having to cope with an unpredictableexternal environment

    HomeostasisSelf regulation

    General systems theoryvon Bertalanffy (1968)

    Language that you can make sense of TransductionEncoding/decoding

    Cognition

    Hierarchical stacking of systems Recursion Set theory

    Coping with variety Being smarter than thesituation beingmanaged.

    VSD/cybernetics1st, 2nd and 3rd

    Principles oforganisation

    Ashbys (1956)law ofrequisite variety

    Conant and Ashby(1970)Law ofresidual variety

    442 Syst Pract Action Res (2011) 24:429452

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  • Diagram 10 shows the contributions to MODE specifically coming from the lower

    recursive levels (Clubs). This also occurs at higher recursive levels (Government policy,

    relevant Acts etc.) as shown in Diagram 9.

    Management Diagram 11: An Ever-Spinning Wheel

    Like a circle in a spiral, a wheel within a wheel, never-ending or beginning on an

    ever spinning wheelBergman and Bergman

    As outlined in Diagrams 9 and 10, the Clubs truthfully act as subsidiary viable sys-

    tems and the SMT act as pathological viable systems for GRV. Usefully they are both just

    part of the one viable system (GRV) which defines MODE (Diagram 11).

    At a layer of recursion one level down from MODE, the Club and SMT departmental

    operations sit side by side each other, with their next layer down individual objectives

    being regulated by the strategic requirements of MODE. If the holistic GRV organisational

    strategy contained in MODE can then be envisaged as being contained in the green disc in

    MODE layer one, that disc may spin in either direction, and at varying speeds, depending

    on the need to attenuate or ameliorate variety arising from the whole operation of the GRV

    organisation.

    It follows that when the green disc in MODE layer one spins, the recursive brown disc

    in layer two (and the 13 club subsidiary viable systems) must also spin. Recursively, they

    use the same components, with appropriate variety adjustments at MODE layer two, one

    level of recursion down.

    E

    O

    Government policy, relevant

    Acts etc

    E

    E M

    O

    O

    GRV MODE

    All clubs responsible for primary activities as subsidiary viable systems

    Diagram 9 PICCO, subsidiary viable systems (clubs)

    Syst Pract Action Res (2011) 24:429452 443

    123

  • Information from MODE filters down and permeates each club and the SMT support

    activities. PICCO formulated information from the clubs and the SMT support activities

    also moves up to MODE layer one as proposed strategic policies, and down to lower

    management levels as defined strategic policies. A yo yo process is developed which

    leads to better MODE policy decisions emerging from contributions from each of the

    recursive layers.

    Management Diagram 12: Strategic Balance

    Control is simply the process by which a system realises its vision and goals, in

    constant adaptation to the milieu into which it is embeddedEspejo (1996, p. 65)

    The twelfth management diagram (Diagram 12) is a simple depiction of how GRV sets

    out to control strategic balance in accordance with the cited Espejo, Schuhmann et al.

    (1996) edict.

    At GRV, the principle aim of MODE is to maintain a delicate balance between Eco-

    nomic Rationalism and the Social Fabric as required by the industry.21 Integrity, appro-

    priate communications and an organisational learning philosophy support that balance.

    These virtues are encapsulated in the first layer of MODE (designated by a green fulcrum).

    Club F

    Club E Club D

    Club A Club B

    Club C

    M

    E

    Operation MODE

    Diagram 10 Reduplication of a cybernetic system of regulation

    21 As a legislated semi-government authority, GRV has responsibility in upholding both the social fabricof the industry and accountability, in a fiscal sense.

    444 Syst Pract Action Res (2011) 24:429452

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  • Using the same cybernetic components with appropriate variety adjustments, information

    then flows between the clubs and SMT support activities (brown support) at layer two and

    MODE at layer one. Each Club and the SMT support activities then embed the MODE

    virtues into a third support layer (Blue) as required. Finally, each club and the SMT support

    activities instil managerial requirements into their specific departments via a fourth

    (Maroon) support layer.

    Management Diagram 13: GRV Hierarchy of Systems

    The set of formal hierarchical roles in an organisation embodies a particular shared

    belief (paradigm) on how the opposing forces of integration and division are best

    arranged at a particular timeRalph Stacey (1993, p. 378)

    Club F

    Club E Club D

    Club A Club B

    Club C

    M

    E

    GRV MODE

    Economic rationalism (Budget)

    Integrity Communications Learning (improvement) Social fabric

    Club and SMT objectives

    MODE LAYER ONE

    MODE LAYER TWO

    MODE LAYER THREE

    Diagram 11 An ever-spinning wheel

    Syst Pract Action Res (2011) 24:429452 445

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  • Importantly, the various SMT operational activities within GRV are able to provide

    vital information, as well as meta-systemic support to MODE. This occurs through SMT

    department objectives, SMT departmental requirements and SMT managerial require-

    ments. The SMT departments can thus be envisaged as an organisational hierarchy of

    various pathological viable systems rather than viable systems themselves (reiterating

    truthfully as primary support systems they are part of the one viable systemthe GRV

    organisation) (Diagram 13).

    In line with Stacey (1993) the compilation of strategies within each SMT department

    then requires a formal documentation of processes with attention to appropriate support

    system variety adjustments.

    Diagram 12 Strategic balance

    Diagram 13 Operationalrecursive levels

    446 Syst Pract Action Res (2011) 24:429452

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  • Management Diagram 14: PICCO a Theory-Based Emergent Learning Framework

    A play should give you something to think about. When I see a play and understand

    it the first time, then I know it cant be much goodT.S.Eliot

    System 5 - Policy Who or what will ultimately make the operational decision? System 4 - just who or what is to gather the required Intelligence? System 3 - Control Who or what is to enable operational self regulation? System 2 - Co-ordination - Who or what is to commence the organisation of that operation? System 1 - Operation What does the operation concern?

    The PICCO method came to be the glue that usefully holds together the strategicplanning process of GRV. Thus in concluding Diagrams 9, 10, 11, 12, 13, and 14 and the

    role that PICCO plays in the GRV strategic planning process, we have come to relate

    PICCO to the Espejo and Harnden (1989) view of the VSM, as a pointer for understanding

    and actionfor we think it allows S1 and operational activity employees to think

    S5Policy

    S4Intelligence

    S3Control

    S2Coordination

    S1Operation

    S5Policy

    S4Intelligence

    S3Control

    S2Coordination

    S1Operation

    Simple PICCO showing information flows from the area of application [operation] to formulation of policy

    AR change method PICCO detailing Beers (1985) VSD, Checklands (1991) SSM template iteration

    F Framework of ideas involves how S3 and S2 will decide on what intelligence is required at S4

    M Methodology of AR brings to the model iteration. In this case Batesons (1973) Four Stages of Competency particularly in each of S2, S3 and S4

    A Area of application is

    S1

    Diagram 14 Linking PICCO to action learning

    Syst Pract Action Res (2011) 24:429452 447

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  • creatively about the parts they play in GRVs operational management. Clearly a repre-

    sentation of VSM, as a non-ordered thinking process, PICCO may be applied for any GRV

    club operation, at any hierarchical level of decision-making. Thus the unpretentious

    Diagram 7b allows PICCO to work as a rudimentary method22 for learning and action in

    the workplace, particularly for everyday employees.

    However, the learning which evolved for GRV employees does not entail a detailed

    elucidation of the theory-bases that underpin PICCO. Thus, primarily for the consideration

    of experienced AR practitioners, we think that PICCO can is viewed as a simple, yet

    effective, emergent action learning framework. Hence, in integrating the theory bases that

    are common to our thinking, the purpose of Diagram 14 is to refer the PICCO theory-based

    method, back to an emergent Action Learning framework by way of mirror image. Further,

    we see Diagrams 14, 15, and 16 as linking the theory-based method PICCO to emergent

    Action Learning frameworks.

    On the left hand side of Diagram 14, PICCO is compressed down to its most rudi-

    mentary format, a simple non-ordered way to think while managing. Simultaneously, the

    right hand side of the diagram is a diagrammatical depiction of but one AR change methodjourney aka an emergent Action Learning framework. That particular framework emergedthrough our consideration of work from in the main, Checkland (1991), Bateson (1973),

    Beer and Argyris (1982). But it has also included work and theory-bases from to others. A

    schematic coming together of the PICCO method and the emergent learning framework is

    therefore shown as Diagram 15. Thus Diagrams 15 and 16 are for the consideration ofexperienced Action Researchers.

    Management Diagram 15: PICCO as a Theory-Based Method in an Emergent Action

    Learning Framework

    We must not cease from exploration and at the end of all our exploring will be to

    arrive where we began and to know the place for the first timeT.S. Elliot

    Diagram 15 emerged from some reflective thoughts about how our work is inextricably

    linked to Beers first principle of control; the controller is part of the system under control.

    However, in aiming to promote the usefulness of the VSM to management, PICCO does

    not present different or improved theory; it really is just another way of presenting the

    VSM (and in particular cybernetic concepts) in simplified form. The paper thus concludes

    with reflections that highlight how our entwined controlling roles contributed to the

    emergence of PICCO as a rudimentary AR change method.

    Our reflection has considered our interwoven roles as (a) the controller of an organi-

    sational management process and also (b) the controller of this AR change process. Fur-

    ther, an assessment of the role of the controller of this one organisation is probably best

    judged internally at the organisation concerned, by reflecting on whether the organisation is

    realising its vision and goals, in constant adaptation to the milieu into which it is

    embedded Espejo et al.(1996, p. 65).

    As the contextual systemic interaction of five components, we find that PICCO, in

    observing VSM principles, may generate order into the initial randomness of organisa-

    tional behavior and flexibilityonly if employees manage to reorganize and improve their

    ways by learning to deal with organisational complexity. PICCO thus usefully uses a mostbasic format of the VSM whereby the surfacing of local, sometimes tacit knowledge

    22 See footnote 3.

    448 Syst Pract Action Res (2011) 24:429452

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  • ORGANIZATIONAL

    INCREASING PICCO FEATURES AND COMPLEXITY

    Rudimentary learning, trying to get better with

    a focus on systems thinking

    ADD -Checklands SSM, FMA, Argyris SLL,

    ADD -Batesons Four Stages Model

    ADD -Beers VSM

    ACTION RESEARCH

    INCREASING COMPLEXITY OF EMERGENT ACTION LEARNING FRAMEWORK

    Rudimentary PICCO as shown in Diagram 7(a)

    PICCO as shown as Diagram 7(b)

    PICCO also including the features of Diagrams 5, 7 and 8

    PICCO also including the features of Diagrams 9, 10, 11

    PICCO also including the features of Diagrams 12, 13

    PICCO

    ADD - Action and learning, AR, learning in reflective cycles

    Diagram 15 PICCOtheory in an emergent action learning framework

    Syst Pract Action Res (2011) 24:429452 449

    123

  • creates a responsive mechanism that is valuable in addressing complexity in the real

    workplace. PICCO thus simplifies the operative components of the VSM by the articula-

    tion of questions that are animate and contextual. Finally PICCO, as a distinctive way of

    thinking, adheres to what we believe are three fundamental tenets of management. The first

    Diagram 16 a The nature of a scientific modelBeer (1966, p. 114). b Beers account of scientificmodeling (Midgley 2003, p. 272)

    450 Syst Pract Action Res (2011) 24:429452

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  • tenet is becoming smarter than the situation being managed (Ashby). The second tenet is

    an understanding that control is not only imposed onto an operation, it also emerges from

    that operation (Beer). The third tenet is the principle of recursion where strategies and

    thinking are all contained within the next level. Diagram 15 is therefore a depiction of how

    these interconnected controlling roles contributed to the emergence of PICCO.

    Management Diagram 16: The Linkage of the VSM and Emergent Action Learning

    Frameworks

    Finally, in not under estimating the difficulties of attempting to link scientific theory with

    social practice (Kast and Rosenzweig 1972; Emery 1981; Argyris and Putnam 1985) our

    view is that the cybernetic foundations of Beers VSM are aligned with AR change

    processes and the pursuit of management learning and knowledge production. In AR, we

    see researchers as part of organisational learning-laboratories [the controller is part of the

    system under control]. We accept that objective knowledge is impossible because

    researchers are always part of the context they study. However as an interpretive research

    methodology, AR is characterised by common elements that appear in its methods, models

    and inquiry strategies. In reiterating that PICCO might best be described as a learning tool

    for introducing the VSM, and in particular cybernetic concepts to organisations in a

    simplified form, for clarity, we are not suggesting PICCO presents new theory or a new

    scientific model (Diagram 16).

    Thus while Beers account of scientific modelling process does not prescribe the use

    of the VSM, it does prescribe that the success of theory-based management methods is

    reliant on their application in action learning frameworks. We show this via the devel-

    opment of Beers (1966) original view on the nature of a scientific model, into Midgleys

    (2003) most recent depiction.

    Hence in using Midgleys expressiona VSM (simply represented as PICCO) has

    mapped a management method onto a firm. It is now up to others to test a second, third,

    and so on VSM against the scientific modelby the now classical criterion of falsifiability.

    Conclusion

    We have provided everyday managers with a simplified and useful approach to the VSM

    and its founding theories. Through a sequence of diagrams based on Beers original

    drawings, minus the lexis, we have demonstrated how the VSM may underpin a process for

    strategic planning in one organisation. Comprehensible for a broad range of employee

    competency levels, the diagrams show how the AR method PICCO, became the glue that

    holds together the strategic planning process for the organisation. We have also demon-

    strated how the cybernetic foundations of Beers work align with AR change processes, the

    pursuit of management learning and knowledge production. This distinctive way of

    thinking rather than a specific concrete subject (Bateson 2000) has thus created a unique

    theory based AR change method for this organisation.

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    A Set of Conventions, a Model: An Application of Stafford Beers Viable Systems Model to the Strategic Planning ProcessAbstractIntroductionA Sequence of Sixteen Management DiagramsManagement Diagram 1: Thinking About Management PrinciplesManagement Diagram 2: Management of Operations Involves Recognition that the Controller is Part of the System that is Under ControlManagement Diagram 3: The Interaction of Management, Operations and the Environment (E)Management Diagram 4: All Levels of M Exhibit ControlManagement Diagram 5: Thinking About Thinking is DifficultManagement Diagram 6: PICCOManagement Diagram 7: PICCO and MODE at GRVManagement Diagram 8: PICCO at Differing Hierarchical LevelsManagement Diagram 9: PICCO, Subsidiary Viable Systems, Thinking RecursivelyManagement Diagram 10: Reduplication of a Cybernetic System of RegulationManagement Diagram 11: An Ever-Spinning WheelManagement Diagram 12: Strategic BalanceManagement Diagram 13: GRV Hierarchy of SystemsManagement Diagram 14: PICCO a Theory-Based Emergent Learning FrameworkManagement Diagram 15: PICCO as a Theory-Based Method in an Emergent Action Learning FrameworkManagement Diagram 16: The Linkage of the VSM and Emergent Action Learning Frameworks

    ConclusionReferences


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