Anthony Stafford Beer (1926-2002) was a British leadership theorist, best known for his work into management cybernetics, including his Viable System Model (VSM) of operational interactions.

Stafford Beer and Cybernetics

Anthony Stafford Beer, better known as Stafford Beer, was a pioneering British consultant and leadership theorist who is best known for his theories regarding management cybernetics, and how to apply them to human organisations. The most famous of his theories was his Viable System Model (VSM), developed over a period of 30 years of observation of various different businesses and institutions. 

The effect principle was that organisations should maximise the freedom of their participants, within all practical constraints of the requirement of them to fulfil their purpose. He blended the field of cybernetics with that of management in order to try and formulate organisational systems which ticked these criteria. The VSM was subsequently designed in order to help identify organisational problems and shortcomings, and to re-design organisational systems and processes.


The Basis of Variety

The main basis of Beer's VSM was that organisations are far more complex in terms of their control systems that we would often like to believe, or understand. The framework by which control is exerted throughout an organisation or system relies heavily upon multiple interconnected layers, communicating with one another. Organisational charts, describing hierarchies and job roles, often neglect the processes through which the business or system truly functions. Relationships between individuals, departments and groups are, in reality, far more nuanced than managerial control. 


What is Variety?

  • Variety, with regards to cybernetics, is simply a descriptor of the number of possible states within a system.
  • For example, a light switch has a variety of 2 (on and off), whilst a single die has a variety of 6 (1, 2, 3, 4, 5, 6). 
  • The number of states of variety depends on what can be sensed by the observer/the context (e.g. infinitesimal changes of light by a dimming switch may not be detected).


Variety grows exponentially with the size of organisations and major systems, creating vast amounts of complexity with regards to its interactions. Some real-world systems have levels of variety which are effectively infinite. However, our perceptions attenuate ('filter-out') any variety which is irrelevant to what we are trying to observe. 


'The lethal variety attenuator is sheer ignorance.' 

- Stafford Beer


Attenuators within human beings are formed by our physiology and by social conditioning, and similar processes/bases for attenuation exist within organisations. However, these business attenuators often filter out information which can be crucial to operation, thus being damaging to the success and effectiveness of organisations.

Similarly, we often attempt to increase our own production of variety as an adaptive strategy to deal with high levels of variety intruding from our environment. The obvious example within humans is our brains - millions of neurons, synaptic connections and subsequent systems which create innumerable combinations and levels of variety. Within humans, the complexity of our brains and their systems created a repertoire of strategies and capabilities which could deal with unexpected variety produced by all kinds of environment. 


The Structure and Purpose of Organisations

Whilst the environments that humans live in may change, they are still able to retain a sense of identity and purpose. This is something which also occurs in human organisations - which are known as  purposive. Purpose can be controlled by many things, but is often expressed through various routes such as mission statements, objectives and goals, as well as the overall culture and values of the organisation. Organisations need to identify - what do we want to achieve? Why do we exist?

Organisational purpose allows for the infinite recreation of the relationship between various components, regardless of whether the components themselves may change. This is known as self-organisation, or  autopoiesis. Any organisations which is unable to maintain its purpose is prone to collapse due to failure to create the necessary relationships between components.

Self-organising systems often possess a hierarchy of purposes at different levels; however, these all need to remain viable for the organisation to function. Though self-organising systems may not consciously realise it, there are underlying structures present which need to be functioning in order to keep these purposes viable, and this is what makes up the basis of the Viable System Model

There are three main elements which are involved with influencing any self-organising system:


  1. Operations - elements which do things.
  2. Management - elements which control operations. 
  3. Environment - the surroundings within which the other elements function.


The variety in the environment will always exceed that of the operations, and the variety within the operations will always exceed that of the management. 


The Flow of Variety


An example of variety interaction between operations and the environment would be operations amplifying its variety through the medium of advertisement, and would subsequently also try to attenuate variety passing the other direction through market research. The management level generally receives all of its variety from the environment through the level of operations, as shown above (direct channels exist, but rarely).

The entire system will become unstable if a single level cannot attenuate the variety entering it through another channel. If the balance, or condition of homeostasis is lost, the organisation is at risk of collapse. However, this is difficult - the model as displayed above simplifies the process, and in reality, there are many different systems and sub-systems embedded within one another. Numerous operations within a single viable system can often be associated with a number of management functions, and also each can operate within an independent environment. 

Whilst flow continues between these levels, it will also occur between different operations (think feedback between organs within a human body, all of which perform different functions). The balance needs to be achieved between these various operations, as well as between levels. In an organisation, this can be achieved through various methods, such as shared operational plans and objectives, or managers which oversee multiple functions and operations. Having an overarching purpose to the organisation as a whole can aid in producing congruence between operations.


Ashby's Law of Requisite Variety

Control can be obtained only if the variety of the controller is at least as great as the variety of the situation to be controlled.

- i.e. Variety absorbs variety

This means that only complex systems, capable of producing a significant level of variety (e.g. a brain) can react to similar levels of variety being produced by the environment. It also forms the basis for Stafford Beer's Principles of Organisation.

All channels within the organisation, used for communication or regulation, must have requisite variety to handle the transmissions. In fact, channels need to hold higher capacity than the variety of various transmissions, such as reports, in order to cope with any errors which may have been included in their production.

 For example - if senior management dictates a regulatory policy on operational management, the policy must be clearly and effectively communicated down to them, in its correct form, and they need to have the capacity to implement it at an operational level, or else it is wasted. This is related to Beer's Second Principle of Organisation.


Senior Management's Methods of Control

Senior management can try to exert overall control within an organisation by striking a resource bargain with levels of operational management. This means: operational levels carry out certain specific functions in exchange for a share of the resources (e.g. capital, manpower, facilities) which are available within the total system. By controlling the resources, senior management can limit the levels of variety which are possible for the operational level to produce. 

In addition, operational management needs to be accountable for their actions to senior management - i.e. take responsibility for the operations and functions within their department or team. Accountability is another effective attenuator of variety at this level. These operations and their managers are also judged against policies which are created and implemented by senior management, as well as by external forces such as legal and regulatory requirements.

NB: Senior management should always hold a regulatory position, rather than an intrusive one, in order to retain balance with the operational management level of the organisation. 


Systems within the VSM

Beer described five different subsystems which are encapsulated within a single level of the viable system model, all of which can be mapped onto various aspects of an organisation's structure. Systems 1-3 are generally considered with how the organisation operates in the present environment, whilst system 4 is concerned with the future - any external, environmental, or future demands in any other field - and system 5 is concerned with giving balance to both the present and the future through policy directives which allow the organisation viability and sustainability. 

Here is more of a breakdown of each system:


  1. Often referred to as Implementation, Beer's first system is generally concerned with all of the basic, primary operations of the organisation, which justify the existence of the system as a whole, and the management of these operations. This does not include senior management, who operate as a set of services to system 1 but instead concerns the primary level of leadership. There are often multiple operations at this level, and the environments of each may overlap, or they may be entirely separate.

    An example would be the operations of iron ore extraction and steel production in the steel industry. 
  2. System 2, also known as Coordination, consists of centres designed to regulate activities in System 1, and also an overarching regulatory centre within senior leadership. It also represents all of the communicative channels which allow the operations managed by System 1 to interact with one another, and subsequently, allow System 3 to monitor and coordinate all of the activities present in System 1. Much of this regulation and communication occurs through informal channels, such as conversations over lunch, and thus is often difficult to monitor and control.  
  3. The third system, Control, represents all of the structures that are put in place by senior leadership to dictate rules, rights, resources and responsibilities within System 1, and also to provide an interface for interaction with Systems 4 and 5. This system represents the broad view of all the operations active within the first system. In simple terms, it is the everyday control of the organisation which is exerted by senior leaders. There is little variety within the activities which occur within the third system. 
  4. System 4 - Intelligence - is responsible for looking externally from the organisation or overall system, at the environment in which it operates, and establishing which factors may impact operations, and how it needs to adapt in order to remain viable and sustainable. There are also channels leading each way between System 4 and System 3, as any necessary changes must be implemented through flow down towards the Control systems, but also System 3 must provide information regarding the organisation in its current form. This allows System 4 to formulate a clear model containing both the organisation and the environment, which forms the basis of adaptive strategies.
  5. System 5, also known as Policy, is the Organisation Ethos, encompassing all policy decisions within the organisation, balancing demands from all of the other systems, and steering the entire system in a single, cohesive direction. This is the system which holds the overall control, though not necessarily directly, as it forms the culture and values of the organisation, and thus dictates policy decisions that control all of the below systems. This system should always be maintained as separate from the control exerted by System 3.


The structures made up of Systems 3, 4 and 5 are often described a metasystemic to those made up of Systems 1, 2 and 3. 

This, in simple terms, just means that the former structures lie above those of the latter in terms of control. 

System 3 is effectively the link between the two meta-structures, which is why it is often interpreted as holding command over the whole organisation - though this is not strictly true.


Beer's Principles of Organisation

Principle 1

Managerial, operational and environmental varieties, diffusing through an institutional system, tend to equate; they should be designed to do so with minimal damage to people and to cost.

This should really be quite intuitive - organisations should naturally search for the most for the most efficient way to institute variety, without making major wholesale changes to any areas of the organisation and still preserving individual freedom.


Principle 2

The four directional channels carrying information between the management unit, the operation, and the environment must each have a higher 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.

This is the first instance in which time is included in the scenario. Communication along any channels must be fast enough to maintain pace with the rate at which variety is generated, otherwise, there is a risk of instability. Importantly, the stability of the system is dynamic and constantly changing, rather than remaining static.


Principle 3

Wherever the information on a channel capable of distinguishing a given variety crosses a boundary, it undergoes transduction; the variety of the transducer must be at least equivalent to the variety of the channel.

Every entity within an organisation operates with its own unique 'language'. For example, you can envisage how the language used differs between the staff operating on the production line and those occupying executive and senior managerial positions. Often, these languages are mutually incomprehensible. 

Subsequently, language crossing a boundary between entities needs to be translated, or transduced. These should be present at all boundaries and are crucial for clear communication between different levels of an organisation.


Principle 4

The operation of the first three principles must be cyclically maintained through time without hiatus or lags.

Though organisations often refer to activities using discrete time periods (e.g. a quarter, or a week), real-world activity does not operate in the same way. Managerial processes need to occur continuously for organisations to cope with changes in variety which are dictated by the environment. Therefore communication and response to changes must be fast enough to keep up with fluctuations in the environment.


Axioms of Management

axiom 

/ˈaksɪəm/

a statement or proposition which is regarded as being established, accepted, or self-evidently true.

a statement or proposition on which an abstractly-defined structure is based.


First Axiom of Management

The sum of the horizontal variety disposed by all of the operations elements

=

The sum of vertical variety disposed on the six vertical components of corporate cohesion.


The First Axiom of Management, as coined by Beer, basically states that any surplus variety that is transferred from the environment to the operations, and then into the management of the operations, has to be cancelled out by the vertical channels of System 3 (Control).

For function, the variety does not necessarily need to be quantified; instead, what matters is that variety coming from uncontrollable sources is cancelled out by that coming from control systems. As Ashby's Law of Requisite Variety dictates, the system must always be balanced between variety and nullification of it. 


Second Axiom of Management

The variety disposed by System Three resulting from the operation of the First Axiom

the variety disposed by System Four.


Effectively, System 3 and System 4 must be in total balance - that is, the organisation must adapt as much as to match the variety being inputted from the environment. Any new technologies, legal changes, etc. must be matched by changes in operations to capitalise on current conditions. But also, changes in the variety produced by System 3 (e.g. new activities) should reflect changes or expected environmental changes - there is no point producing new products or services if they are to be rendered obsolete by technologies developments. 

System 4 is often the limiting factor in real organisations, as they are too busy coping with the current demands and stresses of operations to spare time and resources to examine the external environment for clues as to future changes, and therefore activities in this system are cut back. 


Third Axiom of Management

The variety disposed by System Five

=

the residual variety generated by the operation of the Second Axiom.


The means that the System 5 is required to 'absorb' any variety that is not balanced by the operations occurring between Systems 3 and 4 (the homeostatic system). 

This may be a difficult process to perform, especially if the balance between Systems 3 and 4 is very unequal due to a malfunction or lack of investment in either of these Systems. System 5 must, therefore, be prepared to become more active when action is required, which often may be unexpected. 


Algedonic signals

  • All systems have processes prepared for unbalances between any two connections - these are known as the 'algedonic signals', from the Greek for pain and pleasure.
  • Signals between Systems 1 and 3 should be continuously monitored, and if an emergency condition is detected, an emergency signal will be sent directly to System 5.
  • In turn, System 5 wakes up, requesting emergency corrective action from Systems 3 and 4. 
  • This process gives System 1 management a chance to correct any major errors, before waking up System 3 management if it proves serious and non-correctable at that level. 
  • Similarly, it opposes any unnecessary intrusions from System 3 management into the actions of System 1 management during non-emergency situations. 
  • These are used to preserve a balance between centralisation and decentralisation, freedom and effectiveness.


Measuring Authoritarianism

An organisation’s authoritarianism can be measured by comparing the variety exerted by System 1 management to that exerted by System 3.


The control that System 3 (senior management) exerts over System 1 management has often been used as an indicator of the level of authoritarianism within an organisation or institution. High levels of centralisation can be catastrophic to the organisation over the long term. 

Excessive control from System 3 is often caused by a focus on maximising profits for shareholders, at the expense of the individuals operating within System 1. This generally is reflected in high levels of stress of those affected - for example, front-line managers who are allowed limited independence and freedom. 


Summary of the VSM

  • The model is recursive - i.e. there is a possibility of multiple different iterations of the Systems and occurrences, creating multitudes of activity combinations.
  • Each of the Systems are nested within one another, creating a smaller VSM at each level. 
  • Each level could be considered to operate as a System 1, should there be a higher level of recursion above it. 
  • There are often numerous departments within organisations, and organisations operate in multi-institution environments, each of which operates as a VSM in its own right.
  • The functions described in the VSM do not necessarily have to correspond to a single role description, team or department - multiple functions can be operated by a single individual/group, and simultaneously functions can be shared between many. 
  • For example, senior individuals often carry out the functions of Systems 3, 4 and 5, which may cause confusion (i.e. those concerned with System 5 functions may intrude into System 3). Any transmissions coming from above should be concerned with regulation, not control, unless absolutely necessary.
  • Every single level of the organisation must hold requisite variety - being able to amplify their own variety when necessary, and attenuate any input - whilst channels for communicating variety must hold higher capacity than their transmissions in order to account for errors.
  • Beer believed the VSM was a solution to the balance between effectiveness and control. He postulated that governing bodies could still exert effective control and guidance at a higher level, whilst allowing those within lower Systems (e.g. the general population or the workers) freedom to operate.


Suggested Reading

  • Beer, S. (1974). Designing Freedom. CBC Learning Systems, Toronto.
  • Beer, S. (1975). Platform for Change. John Wiley, London and New York.
  • Beer, S. (1979). The Heart of Enterprise. John Wiley, London and New York.
  • Beer, S. (1981). Brain of the Firm. 2nd eds. John Wiley, London and New York. 
  • Beer, S. (1985). Diagnosing the System for Organizations. Wiley, Chichester.