Conference PaperPDF Available

Defining identity by structural coupling in VSM practice

Authors:
Conference Paper

Defining identity by structural coupling in VSM practice

Abstract

This paper looks at the traditional approach in VSM practice of defining the identity of systems by ascribing purpose, looks at some of the conceptual and practical issues this raises and questions where this approach is helpful and where it creates problems for the modeller, especially given the in-built capacity with VSM for modelling systems with multiple purposes.. We go on to set out an alternative methodological approach to defining identity based on the work of Maturana on structural coupling. The paper concludes with some of the practical and theoretical implications of such an approach .
Defining identity by structural coupling
in VSM practice
Abstract
This paper looks at the traditional approach in VSM practice of defining the
identity of systems by ascribing purpose, looks at some of the conceptual and
practical issues this raises and questions where this approach is helpful and
where it creates problems for the modeller, especially given the in-built
capacity with VSM for modelling systems with multiple purposes.. We go on
to set out an alternative methodological approach to defining identity based
on the work of Maturana on structural coupling. The paper concludes with
some of the practical and theoretical implications of such an approach .
Key words: Viable System Model, Structural Coupling, Identity, Strategy, Strategic
Risk.
The identity of a system can be generated by naming it as an observer, and it can be
assumed by someone working within the system as being in some way obvious. The
unity implied by identity, the sense that a system hangs together in some important
way, implies a system boundary. The concept of system boundary can also be
understood in the sense of observer choice and in the sense of what is “natural” to an
insider.
It has become standard practice in formalised methodologies for using Beer’s Viable
System Model to define the identity of the system of interest by ascribing a purpose to
it: the purpose implies, and can be used to ascertain, both boundary and identity. This
approach broadly follows the conceptual approach of Soft Systems Methodology -
though frequently using a different approach in the detail of application.
Where the methodological context is similar to that envisaged in SSM (dealing with
some sort of problem however ill defined or understood) using VSM in this way can
work well. However, there are a number of circumstances in the use of VSM where
this approach of basing the study on an observer definition of the identity of the
system according to an ascribed purpose throws up some significant problems both
conceptual and practical. Furthermore, whilst the definition of identity by purpose is
essential in an approach like SSM, it isn’t in VSM. Some very different options for
dealing with the modelling problem of definition of the identity of the system to be
modelled are made available by VSM.
One key differentiator between contexts here is that when problem solving it is
essential to define purpose. Problems are not things in the real world. A problem is a
gap or mismatch between a perception of how the world is and how the world
“should be”, so understanding how a stakeholder or preferably all key stakeholders
perceive the purpose is essential to understanding the “should be” in this equation. A
fundamental difference in modelling approach though is whether to use this ascribed
purpose as the basis for defining the system (which makes perfect sense in SSM) but
doesn’t always in VSM. If, given my purpose, I have a problem, is my purpose an
appropriate way of understanding what my system of interest is?
Just to be absolutely clear, I am not arguing here that in VSM the system only has one
purpose or that the purpose(s) are in some way independent of the viewpoints of
particular stakeholders. Quite the reverse. The argument is around whether purpose
(however and by whoever defined) should be the basis for defining the identity of the
system, which is a totally different question.
Three conceptual problems
There are a number of quite serious conceptual problems in VSM in using the purpose
based definition of identity. Two of the three conceptual problems here are problems
of circularity akin to the time traveller’s problem can you change the past to create a
future in which you are unable to go back to change the past.
1. If purpose is used to define the system and then the system is modelled to try
and understand the dynamics of purpose(s) there is an unpleasant circularity
2. The invariant expressed in POSIWID gives us a dilemma: if we use the notion
of the purpose we have understood from the working of the system it is merely
a tautology and if we use some other definition of purpose we generate a
contradiction
3. From an observer position, systems can appear to change their purpose in
unexpected ways or to have purposes that do not make sense to the observer:
how can the roots of this behaviour be understood if system is defined from
purpose?
Firstly, in VSM we are interested in organisational systems and one of the issues that
concerns us is the way in which organisations create, maintain and change their
purposes. You cannot do this properly if all you study is a system as defined by an
ascribed purpose. The very process of defining the system in this way reduces the
system to the ascribed purpose, so the modelling inevitably precludes consideration of
how other purposes are simultaneously held, maintained, nurtured, destroyed or
created anew. If the system defines purpose(s), then the purpose cannot be used to
define the system. When we are asked to solve a problem, this issue does not arise,
because the perspective of the system is focused on the purpose that relates to and
defines that problem. So, the observer sits outside the system and views the system as
if it had “a purpose”. The conceptual standpoint is that the observer is somehow
external. In working out how the system creates purpose, the cybernetics of the
observer are quite different and we need to understand how the system works upon
the observers inside it with their multiple perspectives of multiple possible purposes,
not just one ascribed one.
Secondly is the POSIWID problem. Bound up in the theory underpinning VSM is the
view that “the Purpose Of a System Is What It Does”. Not what the designer intended
it to do, not what the manager or any other stakeholder we might be concerned about
would like it to do or not to do. Purpose is what it does. So again, we face a problem
of impossibly circular logic. If purpose is an outcome of what the system does, and
the system as modelled is an outcome of the purpose, then using the purpose to define
the system is tautological. In practical terms for the modeller, if, as is so often the
case, what we are interested in is what an organisational system does or doesn’t do,
then basing the model of the system on a pre-determined purpose (what it does) then
the modelling can only show us what we decided beforehand a sterile exercise.
Thirdly we have the broader problem that “being” and “doing” are not the same thing.
The identity of organisations, like the identity of people is very much richer and more
complex than just what the system does. My dog is a Scottish Deerhound. She doesn’t
“do” Scottish Deerhound since she doesn’t actually hound deer in Scotland. However,
you cannot understand any deerhound unless you know they are deerhounds. This is
not about their doing (not hounding of deer in Scotland), it is about their being a
deerhound. There are lots of things that deerhounds do that only make sense when you
know what they are. The practice of grabbing your elbow or taking your cap off as
they race past you at 30mph only makes sense when you know it is practice for
bringing down a red deer by grabbing its hock or its ear whilst charging down a
mountain at 40 mph. Without an understanding of what the deerhound system is, we
cannot understand what it does and why there is 100lbs of dog flying past you at head
height to snatch your baseball cap from your head. Definition of the system by
purpose does not help us to understand a whole set of systemic properties including
latent behaviours and potentials and unintended emergent properties. In some
organisational modelling projects, these are the most important issues.
Modelling beyond problem solving
The different contexts in which a methodology can be used were referred to in the
introduction. We need to draw out the distinctions and differentiations mentioned
there.
The difference between a problem solving approach and other uses of systems
modelling are critically important here. Where we have a remit to solve a problem (as
in SSM) then a purpose defined model is fine as far as it goes. But this is far from the
only area of application of systems approaches and for the VSM practitioner it only
represents a subset of application. So, just one other example is Conant-Ashby.
Conant-Ashby theorem is one of the underpinnings of VSM and states that “every
good regulator of a system must have a model of the system”. In other words, in an
organisational context, management needs a model of the organisation as a system
and the effectiveness of management will depend on the utility of this model. This is
not modelling the system to solve a problem of the system being modelled, it is
modelling the system to inform management a fundamentally different activity that
demands that we seek to see the system as it is in and of itself, how it operates in
practice, and deliberately don’t assume any particular purpose for it.
Organisations have multiple purposes which are emergent properties of the system.
For us to understand how the organisation works as a system, we need to be able to
model multiple purposes, how these interact and how they have been generated by the
system, are being generated currently and are likely to be created in the future. This is
essential if we are to understand the organisation as a whole and after all,
understanding wholes and emergence is the essence of a systemic approach.
In VSM, the ability to model multiple purposes is fundamental. It is built into the
structure of the model and of course is the reason for the model’s recursive or fractal
structure. Each level of recursion deals with a different set of logical concerns and
different types of complexity in its operating environment to the levels embedded
within it and to the levels in which it is itself embedded. This inevitably means each
level has different purposes. Viable system models are inevitably and explicitly
models of systems with multiple purposes. This doesn’t just mean that it isn‘t
necessary to focus on “one” purpose for the system, since VSM inherently involves
multiple purposes, it also means that where we are defining the system by purpose -
whether this is a conscious and formal step in the modelling process or an
unconscious one, we inevitably reduce the richness of the model. Of course, the
purpose of models is to reduce the complexity of a real world situation to its essential
elements. Critically though, in studying organisations which is what we are usually
doing when using VSM one of the crucial elements is very often how the
organisation’s multiple purposes interact.
A Practical Problem
In practice, stated purpose may be deficient or defective. Strategies go unimplemented
and organisations are destroyed by factors they did not consider to be risks to their
purpose. How can we get systemic insight into things that are off the map?
Just one example of the sort of practical problem we encounter, was when modelling
the nuclear industry with specific reference to nuclear waste. The nuclear industry was
not conceived to create nuclear waste. Nuclear waste has always been an unintended
consequence of the industry. The management of nuclear waste has always been an
afterthought, where dealing with the problem of waste has always lagged behind the
creation of the waste.
So what’s the difficulty with modelling this? We can define our system of interest as a
“system to manage nuclear waste” whether one exists that we think is unsatisfactory
and needs attention or whether there isn’t one and we want to design one using a
systemic approach. And that would be fine if we’re content to wait until a problem
has been created in the world before we decide to model the system. Trouble is that
part of the problem of nuclear waste is precisely that it was largely ignored by the
industry because it wasn’t part of their purpose. Part of the problem is that the delay in
dealing with it has confirmed the lack of confidence of the anti-nuclear lobby that the
industry is a) serious about tackling the waste problem and b) actually competent to
deal with it after all if they had the answer why the delay?
So, the modelling problem here comes back to why we need models. If we’re content
to model problems once they’ve happened, purpose based system definitions are fine.
If we want to help organisations to avoid falling into crises that are not direct
consequences of their purpose, that are in fact unintended consequences, we need to
be able to model the system beyond its purpose however and by whomsoever that is
defined.
The nuclear waste example is not unusual. It is fairly typical of a huge set of
organisational issues the ability to model unintended consequences is fundamental
to dealing with strategic risk. This is a widespread issue. Even before the recent
interesting events in the financial markets, organisational failure was endemic, not just
amongst start ups and small companies, but amongst the most successful corporate
giants 85% of the original S&P 500 (the 500 most successful businesses in the US)
have failed and are no longer in business. Most of these organisations succumbed to
strategic risks and in 35% of failures due to strategic risk, the risk came from a
direction the company had never even considered as an area of concern. It wasn’t just
that they didn’t see it coming, it had never occurred to them to look in that direction.
Modelling how organisations create strategic risks that are outside of their stated
purpose is far from being a trivial or uncommon need.
Structural Coupling
Having wrestled with both the conceptual and practical limitations of purpose based
modelling for some years, my starting point for developing a different approach was
Maturana’s work on structural coupling.
When one system is an important part of the environment of another system and vice
versa the second system forms an environmental element for the first, clearly when
one system changes the other will tend to change too. The compensatory change in the
first to change in the second will produce further change in the environment of the
second such that it too will tend to compensate. Structural coupling says that in
practice systems change together, often sympathetically. In this paper we are
interested in the tension between this notion of necessary adaptation and notions of
conscious purpose.
Maturana’s work is rooted in cellular biology and describes the process by which
organisms change continuously through adapting to their environment at a cellular
level. One example cited by Maturana is the evolution of the eye. At a macro level,
we can look at the co-evolution of a humming bird and the flowers on which it feeds.
As each adapts to the other at the species level through successive generations, both
humming bird and the flower become more individuated, more specialised, more
uniquely themselves. When Darwin talked about “survival of the fittest” what was
meant then by “fitness” was the fit between the organism and its chosen environment,
not necessarily the ability to run fast (although in a cheetah or a Thompson’s gazelle
the two types of fitness are the same). What Maturana sought to do with structural
coupling was to explain the process that delivered evolution.
As with arguments that have raged for some time in the systems community about the
transposition of Maturana’s related concept of autopoiesis from the domain of cellular
biology to the domain of human activity systems, so there may be similar doubts and
confusions about the transposition of the concept of structural coupling on the same
route. Within cybernetics there is an established approach to the transfer between
different conceptual domains which is to look for aspects that are invariant at the
conceptual level and aspects that differ at the ontological level between domains. In
both cases: autopoiesis and structural coupling, therefore, the key for me has been to
see where and to what extent the theory “grounds” at the human system level. In other
words does it explain actual findings in real world situations. So, this is a two level
analysis, does it transfer conceptually and to what extent does it transfer practically?
At the conceptual level, structural coupling transfers very easily to the organisational
domain. Interestingly, it is also remarkably easy for practicing managers to grasp. So,
at the conceptual level, organisations interact with key aspects of their environments,
or key players within the environment in such a way that they adapt to the
environment or adapt the environment to themselves or both. So, structural change
occurs in both system and environment and the two co-evolve. Since with VSM what
we are modelling is activity systems, the structural changes we are looking for in the
system of interest are changes to those activities: either the creation of new activities,
or the increase of some activities or diminution of others, or changes to activities
(which in modelling terms are the creation of new sub-activities, increases or
diminutions at another level of recursion). The significance of the ease with which
managers take up this idea is that it shows that the concept explains issues and
phenomena that are very real and relevant to them.
Defining Identity using Structural Coupling
The structural coupling view has as its starting point the interactions between the
system and its environment. In terms of how we define identity, this is very different
to definition by purpose. It is definition by establishing the boundary - a literal
interpretation of “definition” of the finite limits of the system and what the
organisation interacts with, establishing what sits at the boundary, at the edge of the
system.
With an appropriate sense of a system delimited from its environment we can ask
important questions from the structural coupling standpoint. Essentially we can ask
whether the system we are focusing on makes sense as a unit that both influences, and
is influenced by, other systems in the environment. Are the parts of the system more
tightly coupled than the interactions? Or does a different system boundary make more
sense in describing change?
The definition of identity then is by reference to the key relationships the system has
with its environment. This is relatively straightforward, it can be done simply by
naming the relationship and the nature of the interaction within that relationship. More
specifically we can do it by defining the nature of the structural coupling in that
relationship how it is changing the system in focus, and how the system in focus is
changing the coupled systems(s) in the environment. This is not a definition according
to what we do. It is a definition according to what shapes us and how our interactions
shape others.
If I am the system of interest, I have a set of structural couplings which may be used
to define me as a system, so I have relationships: as a member of a family, within my
business, with clients, with other consultants, with other systems people, with
academia, in the wider sphere, with friends, with people I sail with, with others that I
cycle with, with people in my village etc. etc. Those couplings mould me as a system
and I affect all of them. Some of them may be new, some may be old (some indeed
are with people who are dead), some may be very tight, others much looser, but they
are all relationships that help define who I am.
From a modelling point of view, the selection between these relationships is simply
one of focus: it becomes a simple matter of selecting one subsystem at however many
levels of recursion to study. But that focus sits within a much wider understanding or
definition of a complete person. So, I have a set of activities that are to do with my
family relationship, another set that are to do with work etc.
The same is true of organisations of any size or complexity and their structural
couplings. This is fundamentally different to the way this complexity is handled in a
purpose based approach, where a purpose is ascribed to the system from a named
perspective and other purposes from other perspectives are explicitly and deliberately
put aside. For VSM with its inbuilt capability to model recursively structured systems
pursuing multiple purposes, there is no need to exclude these perspectives and the
resultant model is more realistic and more powerful. My other couplings are directly
relevant to the set of couplings that I have as a consultant, to ignore them in the
process of building a model is a dangerous delusion.
I can state what my purpose as a system is, and modelling conclusions can be drawn
from that. I can pay attention to what makes me what I am, and a rather different set
of modelling conclusions can be drawn. If I have a problem enacting my purpose,
which is the normal business situation, I may want to understand the potentially
contradictory implicit purposes in the second model. If I feel that my choices are
being determined by others in my environment, that I am passive, then I may want to
get a better understanding of the first model.
The key issue here is in understanding not merely that relationships exist, but how and
in what way each relationship changes the system in focus. So, at a personal level,
how does this relationship change me and how do I change the counterparty? This is
in a very real sense, the definition of identity the identification and modelling of
how a system’s identity is created defined and continually redefined, and not merely
from a modelling perspective. If as an example in the organisational field, we go back
to the example of the nuclear industry and the problem of waste, the reason the
industry struggles with waste is because of the anti-nuclear lobby. Otherwise they
would simply dig holes in the ground and bury the waste. What stops them from
doing this is the protest movement. The industry and the protest movement are
structurally coupled. Indeed they are so strongly structurally coupled that the industry
created the protest movement. And the protest movement has fundamentally changed
the industry. For decades now the expansion the nuclear industry seeks has been
paralysed by the failure to adequately address the waste problem. The protest
movement quite literally defines (sets the limit on) the industry whilst the industry
conjured the protest movement into being from nothing. You cannot understand the
identity of either without understanding this relationship and specifically
understanding what is going on in the structural coupling.
Some implications and applications
Using structural coupling to define identity helps in understanding, predicting and
diagnosing a whole set of system failures at both the individual and organisational
level and can provide a completely different approach to some long standing
organisational issues. There are three areas where this has been particularly useful in
our work to date: Identity crises, strategic risk and organisational strategy.
Identity Crisis
If our structural couplings define our identity, then it follows that any failure of
structural coupling gives rise to problems of identity. At a personal level it is called an
“identity crisis”, at the organisational level, it doesn’t really have a name, but it
betrays all the characteristics of an identity crisis.
Breakdowns in structural coupling can happen in one of two ways, either the coupling
breaks, the link or relationship starts to unravel and the process of co-evolution starts
to fail resulting in a loss to the system of the stimulation that drives evolution.
Conversely, the relationship can become so close and such a perfect fit that no
stimulation takes place and the evolutionary process stops. In either case, the system
starts to atrophy and die through lack of stimulation. The former case of breakage is
easier to spot and also to predict. In the personal domain, it can be absolute, as when
someone close dies or moves away, or for an organisation when a contract or alliance
is cancelled or ended. It can also be incremental or partial.
Classic examples for individuals are for people who have a strong investment in the
structural coupling with their children and the reappraisal of their life when the
children leave home and become independent. For organisations, an equivalent is a
group that fails to redefine its identity following an increase in operational autonomy
of its strategic business units I have seen groups literally fall to pieces because of
this. Similarly, an organisation we worked with was threatened with the loss of its
single most important contract had an identity crisis as a result. Using conventional
approaches was extremely difficult this demanded of them that they base their
strategy on a “vision” for the company, but when they tried to do this, their vision was
of being what they already were. It didn’t deal with their core underlying problem- the
threat to their structural coupling and the need to form new structural relationships on
the same model which turned out to be an extremely easy problem to solve.
Strategic Risk
The widespread problem of strategic risk has already been alluded to. There are a
number of problems in dealing with this. One is the problem of categorisation what
is a strategic risk? In other words how is a strategic risk different from any other sort
of risk? Defining identity by structural coupling provides us with a ready answer: a
strategic risk is one that breaks our positive structural coupling with the environment
thereby threatening our future evolution and survival. Structural couplings are value
neutral, they can take us in a direction we want to go in, or not. So in the nuclear
waste case, the structural coupling between the industry and the anti-nuclear lobby is
a structurally coupled relationship that takes the industry in a direction it doesn’t want
to go in and threatens other potentially positive structural relationships: ones with
government, regulators, investors and the public. Identifying strategic risks as threats
to and from structural coupling is relatively straight forward and clearly differentiates
strategic from other risks (although of course operational risks can become strategic
where they break structural couplings). As well as this being an issue of classification
of risk, it also helps in dealing with the problem of blinkered vision. 35% of fatal
strategic risks to organisations come from directions they hadn’t even considered as
risk areas. Typically, organisations focus on their own purposes, not on the effects
that either they have on aspects of their environment, or that their environment has on
them. The blinkers are because we don’t focus on the structural nature of our key
relationships: we think we are viable independent entities who have autonomous
choices about who to deal with, and this often turns out to be less true that we thought.
Of course this is precisely a breakdown of modelling of the sort we are describing.
The second technical problem when looking at strategic risk is anticipation. Here
again, viewing the problem as one of structural coupling provides answers both
conceptually and practically. Structural coupling relationships have a trajectory
that’s their nature. The defining characteristic of structural coupling is structural
change derived from interaction with an element in the environment that drives
evolution. The humming bird evolves its long beak at the same time as the plant it
feeds on evolves a deep flower, where the nectar is hard to reach and requires a long
beak. This relationship has an evolutionary trajectory. If someone starts to blackmail
us, there is no excuse for imaging that the blackmailing will not escalate: the
trajectory has its own logic.
The same is true in structural coupling applied to organisations. The strategic risk to
the nuclear industry posed by the structurally coupled anti-nuclear lobby was apparent
long before it became critical and potentially fatal to the industry. It could have been
anticipated as soon as the first flickerings of concern were expressed. If the industry
had concerned itself with its structural couplings rather than its stated purpose, the
waste issue could have been dealt with several decades ago, before the anti-nuclear
lobby had grown in strength.
An IT company that provided and maintained software for a much larger
manufacturing business was experiencing problems with the relationship. Often the
software was late and unreliable. As a result, the manufacturer aware of its
dependence on the software came to perceive the IT company as their biggest
strategic risk. As the manufacturer represented around half of the IT company’s
business, they perceived the manufacturer as their biggest strategic risk. Both were
dependant on the other and neither trusted the other. This was a toxic structural
coupling which had its own trajectory moving from increasing levels of mutual
mistrust towards litigation and the eventual breakdown of the business relationship.
Strategy
A third area where defining organisational identity by structural coupling has
profound implications is that of strategy.
Conventional management approaches to strategy are linear and deterministic. They
are based on positing a future state for the organisation and moving towards that in a
fairly linear manner. This approach has several conceptual shortcomings. Firstly, it
assumes a single purpose for the organisation (which as discussed earlier is inherently
a system with multiple purposes) This means that strategies that are based on and try
to enforce a single purpose are rarely bought into by parts of the organisation
formulating and intent on pursuing their own strategic intentions. Secondly if the
environment changes faster than the strategy can be implemented, the organisation
may end up trying to implement something that renders it totally unfitted to its
environment. Thirdly, the traditional approach simply doesn’t work. Ackoff remarked
that around 98% of US government strategic plans were not implemented. Banker
reported that “over 90%” of corporate strategy fails to be implemented.
There is a real conundrum here. It may be no great surprise to a systems thinker that a
strategic plan and strategy implementation process based on linear deterministic
thinking fails so often, but, despite this failure, all around us we do see change. So if
this isn’t the planned change of the corporate strategy, what is it? And where does it
come from? If one organisation loses market share to a competitor, there is no doubt
that both organisations will go through necessary adaptations as that situation
progresses. They are for the time being structurally coupled whether they
acknowledge the fact or not. The scope for purpose lies in understanding the nature of
the coupling why it exists and how it works.
So one possible answer to the question of where change comes from is that it comes
from structural coupling in organisations in just the same way as it does in biological
systems. In practice, all that is needed for this thesis to be valid is that organisations
would be adapting to pressures and opportunities in their environment at an
“unconscious level” i.e. one that fell below strategic decision making. In other words,
if organisations respond at an operational level to their environment, this will have
profound effects on the organisation that effectively will constitute an unconscious
strategy. The mechanisms of this process are very simple and very powerful. Firstly,
by adapting to the environment at an operational level, the organisation will change its
boundary conditions, thereby opening itself up to a new set of environmental stimuli.
The nature of each adaptation will determine the new stimuli that are available.
Consciously or unconsciously the organisation is determining its future opportunities
and threats with each adaptation. Secondly, organisations can only receive and handle
the sorts of information they are structured to hear and handle. If you doubt this, try
complaining to an organisation that doesn’t have a complaints process or structure to
handle your complaint the individual you complain to may hear you, but with
nowhere to pass that information to, the information dissipates and the organisation as
a system cannot hear it. The structure determines the information the organisation can
handle and the availability of information limits what decisions the organisation can
take and act on. Certainly it remains the prerogative of senior management teams to
formulate strategies that are not bounded by the information the organisations current
structure makes available, but the probability that decisions taken in this way will be
acted on are fairly low as evidenced by the figures quoted by Ackoff and Banker.
So, if organisational decision making deciding which opportunity spaces in the
environment we should try to move into - is effectively determined by structure and
structure evolves by structural coupling, that would mean that “real” strategy the
direction of travel of the organisation as opposed to the corporate plan, is effectively
determined by the process of structural coupling. This may seem simplistic, but the
implications are anything but simplistic. What this would mean is that apparently
small decisions of local adaptation to the operational environment may take the
organisation down an evolutionary pathway which will change its activity structure
and thereby its ability to receive and process different types of information and along
which it is presented with new opportunities or threats. In this view, very small
decisions may have very big long term consequences for the type of organisation it
becomes: which parts of the environment it engages with, what it is able to do there,
what information it can receive and what decisions it is able to take and enact. The
corollary of this is that organisations are doing “real” strategy all the time and that
they would do well to study the nature of their structural couplings to see where those
relationships are taking them and what sorts of organisation they are likely to turn
them into.
The change in emphasis here is subtle but decisive. Instead of modelling the
organisation as essentially static except where intentionally changed by management
purpose, it is being modelled as adapting as it can to a changing set of relationships,
and where it cannot adapt, failing. In a static model the question about the
environment is whether important changes are noticed and handled intelligently. In
the structural coupling model, the key question is whether anyone can understand the
future significance of the default adaptation that is happening continually. The stuff of
tragedy is misunderstanding the significance of what is happening, not just being in
the dark. This is IBM giving Microsoft the contract for a PC operating system.
Conclusions
Conant-Ashby insists on an internal model for an organisation if it is to be properly
regulated. Structural coupling when modelled in this way starts to show why Conant-
Ashby must be true. What I need to know as a manager is how the other organisations
I deal with are affecting me and how my organisation is affecting them. The choice of
system boundary and the notion of identity in these models is crucial, life or death.
Purpose tells us the scope of a system that supports that purpose, but in doing so
obscures where that purpose came from and what its status is. We can explain
systemically to a manager why his purpose is problematic in a given system, but we
cannot tell him on this view why his purpose is one thing and the set of purposes
implied in the way his organisation is coupled into the environment will tend to trump
his purpose every time. Put more positively, developing a strategy that allows an
organisation to choose between its available futures might be a better use of time than
developing one from the mission statement.
References
Ackoff R (2006) Personal communication with author
Allen N. & Beer L (2006) Strategic Risk its all in your head www.bath.ac.uk
Ashby, W.R. (1956) Introduction To Cybernetics London, Chapman Hall
Banker, R. (2006) PMA conference keynote address
Beer, S. (1981) The Brain of The Firm, Chichester, John Wiley
Beer, S. (1974), Designing Freedom, Chichester: John Wiley.
Beer, S. (1979), Heart of Enterprise, Chichester: John Wiley.
Beer, S. (1985), Diagnosing the System, Chichester: John Wiley.
Beer S. (2010) Think before you think Wavestone
Checkland P.B. (1981) Systems Thinking, Systems Practice John Wiley Chichester:
Conant R. & Ashby W.R. (1970) Every good regulator of a system must be a model
of that system International journal of Systems Science vol. 1
Espejo R. (1989) The Viable System Model, Wiley Chichester
Hackett G. (2006) PMA conference keynote address
Hoverstadt P (2006) “Measuring the performance of management” PMA
Hoverstadt P (2008) The Fractal Organisation building sustainable organisations
using the Viable System Model Wiley Chichester
Maturana, H, and Varela, F. ‘The Tree of Knowledge’ Boston, Shambala,
Maturana, H. (2002) Autopoiesis, Structural Coupling & Cognition, Reidel Dordrecht
Mintzberg H (1994) “The rise and fall of strategic planning” Prentice Hall
Ringland G (1997) "Scenario Planning" Wiley Chichester
Van Der Heijden K (2005) "Scenarios" Wiley Chichester
... Also, the identity exists independently of whether or not it is explicitly known to and maintained by the organization. Managing identity without really knowing what it is may be disastrous for the organization [5], thus understanding its own identity, i.e., how the organization is seen by the others, should precede any active actions related to identity management. This understanding is also needed for planning any radical change aimed at changing the organizational identity, as such change needs to be visible outside. ...
... However, in this article, we are interested to look at the identity from a system theoretical perspective, to see whether such perspective can give interesting insights in the area of identity management. Reviewing articles on identity from the systems theory perspective, especially related to VSM and its System 5, we have chosen to test an approach suggested in [5]. This approach is based on the idea that maintaining identity is equal to maintaining structural couplings to the key elements of the environment in which the organization operates. ...
... While [5] defines the idea of using the concept of structural coupling to understand identity and identity management, it does not present a systematic procedure of how to find all structural couplings and how to use the findings in identity management decisions. In this article, we try to narrow this gap by suggesting a new approach for (1) identifying and (2) managing identity. ...
Article
Full-text available
There are several ways of defining organizational identity and identity management. This article considers a less exploited one, namely, defining identity as a set of structural couplings that the organization has, and identity management as an activity aimed at maintaining these couplings. The concept of structural coupling comes from biological cybernetics, and it means that a system during its evolution becomes entangled with few other systems. The system at hand evolves together with these systems, adapts to them and causes them to adapt to it. The concept of structural coupling is applied in a study of an institution of higher education. To identify structural couplings, the authors use a so-called Fractal Enterprise Model that presents both internal structure of an organization and its business environment. The article analyzes to which elements of the environment an institution of higher education is structurally coupled and how the identity maintenance is arranged. The article provides examples of how well maintaining identity works in practice based on reflections on the authors' experience of working in the department. The article concludes with suggesting a generic procedure for identifying structural couplings and defining a strategy of maintaining these couplings.
... However, in the domain of organizational systems, which are socio-technical systems, the usage of the concept of structural coupling is not widely spread. Actually, we have found only two works that apply the concept of structural coupling to the organizational/business world [4], [5]. ...
... The first work [4] suggests using the concept of structural coupling for the purpose of defining the notions of organizational identity and identity management. According to Hoverstadt [4], the identity is defined as a set of structural couplings an organization/enterprise has to other systems/agents in the organizational/business world, such as markets, customers, partners, vendors, regulators. ...
... Besides being coupled to an external pool as an input, an organization can be structurally coupled to a pool where one of its outputs, e.g. waste, goes, as discussed in [4]. A typical example of such coupling is an institution of higher education that provides new entities to a work seekers pool, see Fig. 2, as an overflow of this pool (not enough job for the graduates) will substantially affect the business. ...
Chapter
Full-text available
The concept of structural coupling, which comes from the biological cybernetics, has been found useful for organizational decision making on the higher level, such as management of organizational identity and strategy development. However, currently, there is no systematic procedure for finding all elements (other organizations, markets, etc.) of the environment to which a given organization is structurally coupled, or will be coupled after redesign. The paper tries to fill the gap by employing enterprise modeling to identify structural couplings. More specifically, an extended Fractal Enterprise Model (FEM) is used for this end. FEM connects enterprise processes with assets that are used in and are managed by these processes. The extended FEM adds concepts to represent external elements and their connections to the enterprise. The paper drafts rules for identifying structural couplings in the model by analyzing FEMs that represent different phases of the development of a company which the author co-founded and worked for over 20 years.
... As regards the application of VSM, Rizolli (2013) indicates that it can be used for modeling and diagnosing a certain situation in the real world, aiming to identify mistakes, weaknesses or even the absence of essential elements from the viability point of view. For modeling and diagnostics using VSM, it is suggested that the organization's identity be established from the systems perspective (Hoverstadt, 2010b). The organization's identity from the system perspective consists of defining what is the system of interest, what is its purpose, what are its limits and what are the system's environment (Rizolli, 2013). ...
... The organization's identity from the system perspective consists of defining what is the system of interest, what is its purpose, what are its limits and what are the system's environment (Rizolli, 2013). Moreover, Hoverstadt (2010b) indicates the importance of understanding that the system structure is changing in a continuous way, so the organizational identity in the system perspective is not something that could be considered fix and static. ...
... Thus, this approach is related to the conceptualization of identity from the perspective of systems, since it verifies how the system, that is, the relationship between stakeholders, is created and continually redefined because of its changing structure (Hoverstadt, 2010b). So, it is possible to relate the place brand management with systems identity, when understanding that the place brand identity management addresses the relation that exists among its several stakeholders and that it should be done in a continuous way, because the identity is considered fluid and changing (Kavaratzis and Hatch, 2013;Dinnie, 2017). ...
Article
Purpose Sectoral brand management processes have presented planning, development and implementation challenges. With the aim of reducing these managerial problems, the purpose of this paper is to revise the structure and the processes of the sectoral brands management. Design/methodology/approach This is a qualitative exploratory study, with its unit of analysis being the process of managing the brand of the Brazilian fashion sector. Primary data collection was obtained through in-depth interviews with the seven industry associations and with the company responsible for the brand consulting. The secondary data used were reports about the branding process of the brand provided by respondents. Data analysis was provided by using the VSM to modeling sector structure and BPMN to processes modeling. Findings The results present a new sectoral brand structure and process to reduce existing barriers. Three sections were carried out: analysis and modeling of the current structure and processes of sectoral brand management; presentation of the current structure and processes problems; analysis and modeling of future structure and processes of sectoral brand management. Research limitations/implications A theoretical contribution is provided in the literature of systems, processes and sectoral brands, since there are no previous studies that elaborated a system structure and process for sectoral brands. In addition, other theoretical contribution is the presentation of a future process model that relates brand management process with its system structure, that is, it relates BPM analysis with VSM. Practical implications It is also possible to indicate that VSM and BPM can contribute to the management of sectoral brands, through the structural and process problems identification and also by making possible to suggest future management improvements to reduce the barriers that were identified. Originality/value The present study originality is the approach of the first analysis of sector brand management with emphasis on its structure and processes that were experienced by the Brazilian fashion sector.
... Though the works on identity from the Management field give many insights about the organizational identity, we have not found in them a ready-made model that could be used for the practical purpose as discussed above. Reviewing articles on identity from the systems theory perspective, especially related to VSM and its System 5, we have chosen to test an approach suggested in [5]. This approach is based on the idea that maintaining identity is equal to maintaining structural coupling to the key elements of the environment in which the organization operates. ...
... This work could be considered as testing a hypothesis that the idea of using structural coupling for identifying and maintaining identity from [5] could be applied to an institution of higher education, such as a department, faculty or a school of a university. The goal is to create a model that can help in analyzing past decisions related to maintaining the organizational identity, and could be used for making informed decisions in the future. ...
... The goal is to create a model that can help in analyzing past decisions related to maintaining the organizational identity, and could be used for making informed decisions in the future. Though [5] presents a number of examples of using structural coupling for understanding and solving identity problems, none of them concerns an educational institution. In addition, as far as we know, no other research paper describes application of this concept to the task of modeling and maintaining the identity of such an institution. ...
Conference Paper
Full-text available
An extended version of this paper is available: https://www.researchgate.net/publication/353772330_Identity_Management_in_an_Institution_of_Higher_Education_A_Case_Study_Using_Structural_Coupling_and_Fractal_Enterprise_Model. This paper presents an ongoing study on defining and maintaining organizational identity of an institution of higher education, such as a department or school. The theoretical background used in the study is the concept of structural coupling that comes from biological cybernetics. The study concerns the authors own department. The paper presents proposals of to which elements of the environment such an institution is structurally coupled and how the identity maintenance is arranged. The paper provides examples of how maintaining identity works or not works in practice based on reflections on the authors' experience of working in their own department. It also shows that maintaining identity may requires changes in different components of the socio-technical system, e.g. methods, people, technology.
... How this tension is articulated and resolved structurally is a key theme in VSM. This view is also consistent with Maturana and Varela's work (Maturana & Varela 1992) on structural coupling between a system and its environment (Hoverstadt 2010). ...
... In this view, organisations get locked into strategic directions and invest resource (energy) into these, aiming to do more of the same thing, and generally more efficiently. In systems theory, this investment into a strategic direction is a form of "structural coupling" (Maturana 2002Hoverstadt 2010, it's a very strong evolutionary driver and represents an entrainment of energy. In many organisations this operates as a "default strategy" -a natural process where change is driven largely by adaptation to the structurally coupled environment. ...
Conference Paper
Full-text available
This paper takes a systemic perspective on agility in organisation design. Starting with Beer's Viable System Model as an organisation design framework that describes the architecture for designing agility, we then look at measuring and building organisational agility. We explain the formula we developed for measuring agility and its application to business turnaround as an extreme case of agility requirement. We use a case study of designing agility in a large IT firm and the results. We discuss the application of this agility formula as an organisation design metric and its use in planning strategic manoeuvres.
... Even though it is developed to better support the design of the process of digitization of smaller firms, the proposed model is actually an enterprise model for SMEs based on interaction levels: the main supportive literature is cited in the subsection 'integrating interaction' above. In these concluding remarks, its usefulness in complementing other approaches is briefly shown by reference to the work of Osterwalder and Pigneur [27] and to the Viable System Model literature [3,13]. The first authors are concerned with the identification of the key components of a business model, which constitute their Business Model Canvas, and with the iterative process that allows for an appropriate model to be built. ...
... Of the complex architecture and evolution of systems that are viable, that is "capable of independent existence" explained by Beer [3], one basic rule is of interest here: the way a system, with its subsystems, interacts with its environment is key to his viability (paraphrased, ibid p. 14). Within the systemic approach, Hoverstad and Ward [13] highlight the interactive and generative character of organizations: "organisations have multiple purposes which are emergent properties of the system. For us to understand how the organisation works as a system, we need to be able to model multiple purposes, how these interact and how they have been generated by the system, are being generated currently and are likely to be created in the future." ...
Chapter
Investments in information technology related to the e-business adoption represent often crucial decisions for small and medium sized enterprises (SME). Therefore e-business design and implementation are key factors in minimizing risks and in promoting valuable outcomes. However, there is an inclination in the IS literature to adopt approaches and models that have been criticized for their techno-centric and mechanistic character. Here a pragmatist perspective is adopted “that allows for conceiving of technological and social aspects of work practices in an integrated way” (Alonso-Mendo et al in Eur J Inf Syst 18(3):264–279, 2009 [1, p. 40]). Given that e-business is distinguished by different levels of information exchanges among both the actors of the firm and its suppliers and customers, the paper proposes an interaction-based model to orientate both entrepreneurs’ choices and designers’ research and practice. © 2019, Springer International Publishing AG, part of Springer Nature.
... The system focuses on reacting to changes in these elements or trying to change them, while more or less ignoring other elements (systems) in the environment. Applying the idea of structural coupling to defining organizational identity was suggested in [10]. It amounts to defining the maintenance of identity as maintaining structural coupling with the important elements of the environment. ...
Article
Full-text available
The article links two seemingly different fundamental theoretical concepts of autopoiesis and homeostasis and tries to apply them to the realm of socio-technical systems with the use of the Fractal Enterprise Model (FEM). Autopoiesis is the property of a system that constantly reproduces itself. Homeostasis describes a way a complex system constantly maintains its identity while adapting to changes in its internal and external environment. To be able to use FEM for this task, the original version of FEM has been extended by adding special elements for representing the system's context – part of the environment to which the system is structurally coupled. The approach taken in this article differs from other works in the same field in having the focus on the “body” (concrete elements being reproduced) of the socio-technical system, as well as on identifying concrete processes that reproduce the system, and demonstrating concrete ways of how a specific system adapts or can adapt to the perturbations in the environment (i.e. internal and external disturbances that affect the system).
... Many commentators (Banker 2006, Ackoff 2007, Keichel 2010Kaplan and Norton 2003Hoverstadt 2008) have pointed out the failure rate of business strategy. Whilst there are many reasons why strategy fails quite as often as it does, one factor is the lack of coherency in how organisations build a full and sensing decision and action cycle for strategic decision making. ...
Conference Paper
Full-text available
This paper looks at the role of performance measurement in linking:  strategy,  the business environment it seeks to affect,  the organisation enacting the strategy  organisational changes to be able to enact the strategy. We argue that provision of information about these four elements and the links between them, expressed as performance measures of different types, is critical for strategic decision taking. It clarifies the design of an integrated, strategic performance management framework, identifying informational shortfalls and allowing clearer integration of existing measures. Such an integrated framework supports the " Patterns of Strategy " approach to strategic decision making developed by the authors.
Conference Paper
Full-text available
Performance measurement of asset management systems remains a poorly understood area both in terms of industrial practice as well as academic research. Continuous improvement of asset management systems require a robust performance measurement system that will allow organisations to understand the performance of various elements within the asset management system – thereby ensuring that (i) organisational KPIs and targets are achieved; and (ii) corrective actions in terms of "fine tuning" those elements of the asset management system that are not performing well. This paper will answer the following questions regarding the measurement of the performance of asset management system and how this can be linked back to business performance: (1) What is the state of play of performance measurement for asset management systems? (2) How to develop performance measures for organisations' asset management systems?
Article
The design of a complex regulator often includes the making of a model of the system to be regulated. The making of such a model has hitherto been regarded as optional, as merely one of many possible ways.In this paper a theorem is presented which shows, under very broad conditions, that any regulator that is maximally both successful and simple must be isomorphic with the system being regulated. (The exact assumptions are given.) Making a model is thus necessary.The theorem has the interesting corollary that the living brain, so far as it is to be successful and efficient as a regulator for survival, must proceed, in learning, by the formation of a model (or models) of its environment.
Strategic Risk – its all in your head www.bath.ac Introduction To Cybernetics London The Brain of The Firm
  • N Allen
  • L Beer
  • W R R S Ashby
Allen N. & Beer L (2006) Strategic Risk – its all in your head www.bath.ac.uk Ashby, W.R. (1956) Introduction To Cybernetics London, Chapman Hall Banker, R. (2006) PMA conference keynote address Beer, S. (1981) The Brain of The Firm, Chichester, John Wiley Beer, S. (1974), Designing Freedom, Chichester: John Wiley.
PMA conference keynote address Beer, S. (1981) The Brain of The Firm
  • Allen N Beer
Allen N. & Beer L (2006) Strategic Risk-its all in your head www.bath.ac.uk Ashby, W.R. (1956) Introduction To Cybernetics London, Chapman Hall Banker, R. (2006) PMA conference keynote address Beer, S. (1981) The Brain of The Firm, Chichester, John Wiley Beer, S. (1974), Designing Freedom, Chichester: John Wiley. Beer, S. (1979), Heart of Enterprise, Chichester: John Wiley. Beer, S. (1985), Diagnosing the System, Chichester: John Wiley. Beer S. (2010) Think before you think Wavestone
Strategic Risk -its all in your head www
  • Allen N Beer
Allen N. & Beer L (2006) Strategic Risk -its all in your head www.bath.ac.uk Ashby, W.R. (1956) Introduction To Cybernetics London, Chapman Hall Banker, R. (2006) PMA conference keynote address Beer, S. (1981) The Brain of The Firm, Chichester, John Wiley Beer, S. (1974), Designing Freedom, Chichester: John Wiley. Beer, S. (1979), Heart of Enterprise, Chichester: John Wiley. Beer, S. (1985), Diagnosing the System, Chichester: John Wiley. Beer S. (2010) Think before you think Wavestone