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Covid-19: why did the virus take us by surprise? What we can learn from Covid-19 about the control of systems and organizations based on the Viable System Model

Authors:
  • Qwinnt Management Institute & Peter Drucker Society Europe

Abstract and Figures

The Covid-19 crisis is a cataclysmic event and caught us all by surprise. It is considered a health and economic crisis, but at the same time and rarely discussed, it also reveals the weaknesses in the systemic processes in our society and organizations. The Viable System Model (VSM) by Stafford Beer allows us to structure the various weaknesses and to put them into a coherent framework. The VSM postulates that all social systems need a minimum set of systemic functions to become viable. This article explains the vital role of these systemic functions during the Covid 19 crisis. It discusses how their (in)adequate functioning decides about the prevention and mastery of the crisis. The VSM offers thus a formal framework to better understand the systemic processes needed for the prevention and mastery of crisis.
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Author: Wolfgang Lassl 1 / 12
Covid-19: why did the virus take us by surprise?
What we can learn from Covid-19 about the control of systems and organizations
based on the Viable System Model
Wolfgang Lassl
Crises like Covid-19 are hectic times. But they are also insightful times. They bring (social) systems such
as states or organizations to their limits and show with unprecedented clarity how they work and what does
not (yet) work.
The truly astonishing aspect of the Covid-19 crisis is that we were genuinely caught by surprise. It now
transpires that while the specific virus was unknown, the scenario of a global pandemic was not new at all
(WHO, 2017). Covid-19 hit us relatively unprepared. Thus the crisis exposes in what areas we have not
taken sufficient steps to prepare ourselves. Covid-19 is not only a health crisis, it is also an organizational
and systemic crisis. To put it more precisely: it reveals the weaknesses that we “afford” ourselves too often
regarding how we manage our society and organizations. These weaknesses allowed the virus to catch us
by surprise.
From an organizational perspective then, what can we learn from Covid-19? What must we do at the
organizational level to prevent such surprisesin the future? To answer these questions, we use the Viable
System Model (VSM) by system theorist Stafford Beer (1994, 1995). This model addresses the question
which processes a social system or organization needs to become viable.
This article is not intended to provide technical advice on crisis management. It intends to draw a map of
the fundamental organizational mechanisms that organizations can and must use to deal with a crisis. This
map shall shed some light on the organizational dimension behind Covid-19 and shall enable us to better
understand how organizations function. It should ideally also make us more aware of what we overlook in
everyday life. Images provide orientation; they define what we see but also what we do not. In this sense,
this article would like to open a novel perspective and make more explicit what we overlook. It should point
us to what is vital for the adaptability and resilience of an organization but which is insufficiently depicted
in standard organizational images such as the organizational chart. The article is aimed at those interested
in organizations and those who want to understand the VSM better.
We begin this article 1 with a brief introduction to the VSM. We then analyze the relevance of Ashby’s Law
for the organizational dimension behind the Covid-19 crisis. Using a simplified model of a national health
care system, we will discuss some of the organizational processes and mechanisms needed to deal with
a crisis in greater detail. In the final section, we will shed light on some of the organizational challenges
regarding the international cooperation of states.
1. The Viable System Model - a (very) brief overview
The starting point of the Viable System Model2 is
the dynamic interrelation between the environment
and organization (Fig. 2). Choosing this relationship
as a basis is not arbitrary. The livelihood of every
organization is, in the end, founded in its ability to
produce a benefit for its environment.
1 I wish to thank Prof. Markus Schwaninger for having reviewed this paper and his insightful comments.
2 All representations of the VSM are or contain adaptations of Beer 1995.
To exist, companies need to produce products that
are useful to their customers, schools have to teach
children well, and hospitals must cure the sick. If an
organization cannot fulfill its purpose for its target
environment, it becomes obsolete.
Author: Wolfgang Lassl 2 / 12
But this relationship is not a one-way street: The
environment is also shaped by the organization, its
products, and services. The smartphone has
probably changed our everyday life and social
behavior like no other device in recent history. What
we can do and achieve in everyday life we owe to
organizations and their products. The environment
also lives from its organizations and is shaped by
them. As already mentioned: the environment and
the organization exist in a mutual relationship
exchanging resources and products.
Stafford Beer's Viable System Model attempts to
detail this relationship and to work out the
organizational processes that are necessary for the
long-term viability and performance of an
organization. We cannot discuss the VSM in its full
depth here, but the following brief overview already
suffices for our purpose:
In the VSM (Fig. 1), the environment (left half of the
model) is divided into three logical spheres: the
sub-environments (dark blue shapes) of the
operational units, the overall environment (light gray
shape), and the future (yellow shape with the
question mark).
The organization on the right half of the model
consists of all the operational units (dark blue
shapes) that produce the organization’s purpose.
These operational units are again divided into the
operations (circles) and their management
(rectangles). In the VSM, the operational units are
called the System 1.
Let us take a simplified model of a nation’s health
care system which consists only of hospitals. Then,
the operational units are the hospitals (“H”). The
operations of the hospital consist, in essence, of the
doctors and nurses. They create the concrete
purpose of the health care system, namely the
healing of the sick. The management of the hospital
consists of its managers.
However, the individual hospitals as such do not
constitute the health care system. Every
organization or social system needs various higher-
order organizational processes to forge a larger and
more targeted unit out of these individual
operational units. The VSM groups these processes
into so-called “system functions” (in brief:
"systems").
The processes that serve the coordination of the
operational units form the so-called "System 2"
(light blue triangle and the corresponding
channels). System 3 processes (green rectangle)
such as budgeting are responsible for the allocation
of resources and the generation of sufficient
synergies. System 3* (green triangle) is responsible
for auditing and optimizing the operational
processes.
For the long-term development of the organization,
another system function is required, System 4
(yellow rectangle), which includes all those
processes that deal with the overall environment
and the future. This system function is responsible,
for example, for the detection of trends, for the
development of strategies and for innovations.
System 4 is the organization’s “look-out” post and
catalyst for the organization’s strategic adaptation
and transformation.
Changes often also require fundamental decisions.
Developing the necessary decision-making criteria
Fig. 1 Health care system with three hospitals (simplified
and schematic) - Lassl 2019a adapted from Beer 1995
Fig. 2 Organizations and the environment are dynamically
interrelated (Lassl 2019a adapted from Beer 1994).
Author: Wolfgang Lassl 3 / 12
and making these decisions, is the task of System
5 (purple rectangle). It bundles all those processes
that help an organization to develop its fundamental
principles and values. System 5 plays an important
role, particularly in the case of a country's health
care system, which faces many complex ethical
issues. Concretely, System 5 can be set up, for
example, in the form of an ethics committee.
There is no social system that can function long-
term without any of these system functions. If a
system function is missing, dysfunctionalities arise,
which seriously limit and imperil the life, adaptation,
and performance of an organization (Lassl, 2019;
Pérez Ríos, 2012; Hoverstadt, 2008; Espejo & Reyes,
2011).
2. Eigen-variety – an overlooked dimension with severe consequences
Based on this introduction to the VSM what can we
say about the Covid-19 crisis? The VSM points us
first to an essential dimension of organizations that
is not reflected in any other organizational model:
the processing of variety. What does this mean, and
what are its practical implications?
2.1. Ashby’s Law Newton’s Law of Gravity for
Organizations3
To start our in-depth discussion, let us return to the
relationship between environment and organization
(Fig. 2): This relationship is subject to Ashby’s Law.
This fundamental law of system theory states that
an organizations eigen-variety must correspond to
the variety of its relevant environment
(Schwaninger, 2006). This eigen-variety consists
more specifically of its resources, competencies,
machines, or infrastructure. It can be understood as
the organization‘s “capacity-to-act”. Ashby’s Law
states that this capacity must correspond to
whatever performance is expected of the
organization by its environment. This capacity or
eigen-variety determines an organization’s level of
performance, adaptability, and resilience.
Fig. 3 In the Corona crisis, the environment’s variety increases
to such a large extent that it overwhelms hospitals (Lassl 2019)
Covid-19 and its effects on the health care system
show us how fundamental Ashby’s Law is for an
3 In: Beer, 1984.
organization’s survival and our understanding of
organizations. The specific challenge of Covid-19 is
that the health care system cannot comply with
Ashby’s Law: Its capacity-to-act or eigen-variety is
too small given the number of cases and the rapid
spread. The health care system lacks sufficient
intensive care beds, doctors, ventilators, and
protective clothing - the health care system and
society are overwhelmed by Covid-19 (Fig. 3).
However, if the eigen-variety is insufficient, the so-
called residual variety4 emerges (Fig. 4), i.e.,
unprocessed environmental variety. In the case of
Covid-19, this is, ultimately and sadly, the deaths.
They result from the imbalance between the
environment’s variety and the organization‘s eigen-
variety.
Fig. 4 Insufficient eigen-variety or capacity-to-act "produces"
residual variety, i.e., unprocessed variety (Lassl, 2019).
However, residual variety can also arise in regular
times. In the environment, it appears, for example,
in the form of dissatisfied customers. Insufficient
or poorly trained salespeople frustrate customers
and cause them to leave the shop in anger. Inside
organizations, in turn, a lack of eigen-variety leads
to stress, burn-out cases, or poor product quality.
If you have too little eigen-variety, you do not have
4 See Espejo & Reyes, 2011; Lassl, 2019b; Pérez Ríos,
2012; Schwaninger, 2006.
Author: Wolfgang Lassl 4 / 12
enough time and the possibility to focus, to work
diligently, and to regenerate.
2.2. Savings or resilience? - The key question for
management, customers, and society
This leads us to an important consequence for our
understanding of organizations: The past decades
have been characterized by a focus on efficiency
and savings - especially in the health care system.
However, savings are only one side of the coin and
this fact is often forgotten. Focusing only on
savings does not allow us to see the other side.
Savings reduce not only costs, but they also
diminish an organization's eigen-variety and thus
the organization’s ability to adapt and fulfill its
purpose.5
Choosing only efficiency and savings as objectives
is thus an approach that is too narrow. We must
also keep the eigen-variety and therein the
resilience of an organization in mind, and precisely
for cost reasons: the consequences of too little
eigen-variety and too much residual variety can
often be astronomically expensive. The
investigation reports on the BP oil spill in the Gulf of
Mexico show us how significant the costs can be
for both the organization and the environment if
eigen-variety is sacrificed to efficiency and is
economized at the wrong place (Hill, 2020). "There
is no free lunch" - and that also applies to savings,
paradoxically.
The VSM thus opens up a new perspective on
organizations and reveals a dimension that has not,
so far, found sufficient space in the management
literature. It invites us to consider organizations not
only in terms of efficiency and savings but
holistically from the perspective of eigen-variety or
its capacity-to-act.6
Organizational design, therefore means also
determining the right degree of eigen-variety.
Having too much eigen-variety is inefficient;
however, too little leads to a loss of quality and can
even be life-threatening, as in the case of Covid-19.
What matters is the calibration of eigen-variety.
What does this mean more specifically? First and
foremost, it means we must not close our eyes to
reality. Anyone who is ultimately responsible for an
organization or a country must equip it with the
appropriate eigen-variety or must at least ensure
that the necessary level of eigen-variety can be
reached quickly in the event of a crisis.
Those who fail to do this will continue to be regularly
surprised by crises in the future. Ashby’s Law and
the necessary balance between environmental
variety and eigen-variety cannot be ignored long-
term. In complex and dynamic crises in particular, it
has become clear how important reserves and
buffers are and how dangerous it is to aggressively
drive social systems or organizations to their limits.
This applies to public systems as well as to
companies, global supply chains, and networks.
When we change organizations or systems, we
must, therefore, keep a closer eye on the aspect of
eigen-variety to achieve long-term viability. This is,
however, easier said than done in a society where
the lowest price counts and executives are
rewarded for squeezing out the last drops of
efficiency reserves.
Ultimately, this will require societal dialogue and
changes in our understanding of leadership and
how we manage social systems and organizations.
Or to put it into the language of the VSM: it requires
a change in System 5 of our society and our
economy.
2.3. How do we restore the balance?
How can the health care system and any
organization respond to the imbalance created by
Covid-19? In principal, a balance can only be
achieved either if the eigen-variety is increased or if
the environmental variety is reduced. Essentially, all
measures can be reduced to this logic.
In times of crisis, however, the existing eigen-
variety itself might be in addition in danger. As a
result, the eigen-variety or access to it (e.g., to
foreign commodity markets) must be protected.
Furthermore, crises are characterized by ambiguity.
If we want to reduce the environment‘s variety, we
need to know where to start and what the best
strategies are. This requires transparency and, thus
appropriate sensors.
5 Unless this reduction can be compensated for by other
methods. “Smart saving” means not only reducing, but
also compensating for the loss of eigen-variety through
other measures.
6 The reason for this one-sidedness might be due to the
fact that none of the usual organizational models
integrates and adequately represents the aspect of
eigen-variety.
Author: Wolfgang Lassl 5 / 12
Let us discuss these points in greater detail:
a. Emergency plans - the airbags the organization
needs to reinforce its eigen-variety quickly
According to the VSM, the first option of an
organization to react to an imbalance consists of
increasing the eigen-variety of the operational units
(Fig. 5), e.g., by purchasing new beds and additional
equipment or by reactivating retired doctors.
Fig. 5 One option to mitigate the Covid-19 crisis consists of
increasing the eigen-variety of hospitals.
For this, organizations must have prepared
stabilizers such as reserves and emergency plans.
The very purpose of reserves and emergency plans
consists of restoring the balance between
environment and organization as much as possible
in a short time.
From a control perspective, reserves and
emergency plans are thus a central element of an
organization‘s adaptability and they shield the
organization against large fluctuations in variety -
comparable to the EPS and airbags in cars.
However, in many organizations, lean management
approaches and financial leveraging strategies that
were applied too aggressively have reduced
reserves to a level that is far too low. Regarding
emergency plans, the situation is not much better: if
they are available, then, in practice, they are often
lacking the required quality.
Emergency plans are often perceived as a
necessary evil since they do not contribute directly
to the immediate success of a business and oblige
to deal with unpleasant and difficult issues and
decisions. As a consequence, recommendations
are elaborated and implemented only half-heartedly
and incompletely, especially regarding possible
bottlenecks.
One other reason for the lack of reserves and good
emergency plans is that they do not typically appear
as organizational elements in any organizational
chart and process chart. However, what we do not
see explicitly, we will not think about. In the future,
we will, therefore, need new organizational images
that draw our attention to the relationship between
the organization and the environment and how it
needs to be managed and kept in balance.
b. Securing eigen-variety - keeping access to
critical supply environments open
Another challenge for organizations is that parts of
their eigen-variety need to be constantly renewed.
Eigen-variety becomes consumed or deteriorates
over time. The organization lives from its
environment and the constant supply of resources.
Raw materials, intermediate products, and spare
parts must continue to be purchased, and access to
labor and knowledge must be secured from the
environment.
During major crises, boundaries are raised, and the
race for scarce resources intensifies. Keeping the
access to the environment open, which replenishes
the eigen-variety, and securing that access is
essential for the organization’s viability in the event
of a crisis.
For many western countries, Covid-19 was a Eureka
moment regarding how few of the critical products
such as masks they produce themselves and how
strongly they, therefore, depend on imports from
other regions. However, one could have actually
anticipated this - why have we not anticipated this
as part of the industrial policy?
Ignorance is a possible reason, but half-
heartedness, other priorities, non-systemic thinking,
or blind spots in the perception patterns of decision-
makers (e.g., disregarding the negative effects and
risks of globalization) are other possible
candidates.
c. Protecting eigen-variety
Environment and organization act together in a
dynamic exchange relationship and are not
completely isolated from each other, we said.
Organizations and their environment continuously
exchange parts of their variety. This is also the case
with Covid-19: A particular danger of the virus is that
doctors can also become infected and that they are
then no longer available to the health care system.
The eigen-variety of the health care system
dwindles due to this contagion.
If you wish to know more, then continue reading, otherwise skip to chapter 3.
Author: Wolfgang Lassl 6 / 12
The eigen-variety of the health care system must,
therefore, be protected. According to the VSM, the
health care system must install dampers that
reduce the influx of unwanted environmental variety
(see Fig. 6; so-called "variety damper"). These are
protective measures, such as, for example, reducing
the number of visitors, testing patients at the
entrance to hospitals, and obliging staff to wear
protective masks.
Not in every country, the health care system was
able to protect its eigen-variety sufficiently, as the
complaints by New York nurses and their unions
bears witness (Ramachandran, 2020). Every
organization must thus ask itself how well it
protects its eigen-variety not only in a crisis but also
during normal times. This applies to the
occupational safety of employees as well as to the
investment in and the maintenance of machines
and infrastructure. The worse their condition at the
start of a crisis, the more difficult it will be to deal
with the crisis itself.
d. Influencing and controlling the environment
According to the VSM, another key lever consists in
influencing the environment.7 The population and
the health care system need to be in balance, we
said. One way to achieve an Ashby-compliant
balance is to influence the other side of the
relationship, namely to reduce the variety of the
environment.
A crisis prevention strategy will therefore also look
at the structure of the environment (e.g., its degree
of connectivity) and ask how the environment can
be influenced and controlled. Organizational
measures need not be limited to the organization in
the narrower sense. Organizations can also
organize themselves by organizing their
environment.
7 See the six channels of the metasystem (Beer, 1995;
Lassl, 2019)
The variety of Covid-19 lies in the risk of infection.
This risk does not depend so much on the size of
the population itself but on its degree of internal
connectedness. The exponential growth curve and
the particular danger of Covid-19 result from the
interactions between people.
In the VSM, the connectedness of the environment
is expressed by the interfaces and intersections
between the environments. These interfaces must
be reduced (Fig. 7). In the case of Covid-19, this is
achieved through restricting public life requiring the
wearing of protective masks and imposing border
controls, or closing borders (e.g., between states or
regions). But have such measures been applied
early and wisely enough?
Fig. 7 The countermeasures consist of closing borders and
reducing interfaces to reduce the environmental variety.
Risk management must, therefore, not only be
limited to the organization as such, but it must also
be aware of and take into account the dependencies
that the organization has on its environment.
Organizations live from their environment, we said.
For this reason, organizations must ensure that
parts of their environment always remain functional
and that the “healthy” part of the environment can
be separated from the “sick” parts.
The situation is, therefore, risky for those
organizations where all relevant environments can
be affected by the same crisis simultaneously or for
organizations that make themselves dependent on
one environment. This is especially true for
companies: how well and how diversified is the
customer portfolio regarding industries and
markets? Anyone who puts all eggs in one basket is
more vulnerable to external shocks and easily
becomes a victim to surprises.
Fig. 6 Every organization needs dampening measures to protect
itself from unwanted variety.
Author: Wolfgang Lassl 7 / 12
e. Reduce the lack of transparency in the
environment - strengthen sensors and analytics
Re-establishing a balance with the environment is
easier said than done. A problem for any
organization is the lack of transparency in its
environment. This results from the nature of variety.
The more diverse a situation becomes, the more
difficult it is to keep an overview and to understand
it. The equivalent term "complexity" captures this
incomprehensibility very well. Complex situations
are characterized by the fact that they exceed our
understanding. This is one of the sources of
surprises.
This cognitive imbalance must, therefore, be
reduced (again, to comply with Ashby’s Law).
According to the VSM, how well this works depends
on the organization's sensor system, i.e., the
sensors that, for instance, our health care system
has put in place (Fig. 8). The testing of the
population or the creation of movement profiles are
measures to install such sensors and thereby to get
a better picture of the environmental variety. They
help reduce the level of complexity, make the crisis
more transparent and thus, the reaction more
targeted. The sooner you are able to discern the fog,
the faster you will be able to manage a crisis and
isolate which parts of your environment affect you.
Fig. 8 Every organization must set up sensors in the
environment to better understand and process its complexity
But how good is the sensor system in our
organizations? Covid-19 revealed great differences
between countries regarding the number of tests
and testing capacities (Spinney, 2020) - differences
that also exist between organizations.
3. The role of control functions and the communication system
However, how well an organization can adapt itself
and its eigen-variety and restore the balance with
the environment also depends on the overall
organization. A large part of the VSM is dedicated
to the role of the higher-order system functions that
are important for the control of the entire system or
organization. We will now take a closer look at
Systems 2 to 4:
3.1. System 2 - Strengthen operational
cooperation and coordination
If we follow the VSM, another possibility to mitigate
a crisis consists in the cooperation between the
operational units (red lines in Fig. 9). Cooperation
allows diverting an excessive amount of
environmental variety (too many patients) from one
operative area (hospital) to another, thereby making
better use of the available resources of the overall
system and avoiding overloads.
France took advantage of this opportunity by
transporting the sick to other regions or countries to
relieve the hospitals in hot spots such as Alsace.
However, this requires a well-developed
coordination system (see System 2 in Fig. 7).
Anyone who has built such a system will now
benefit from it in times of crisis. Every country still
needs to ask itself, if these coordination systems
were sufficiently developed to relieve peaks and to
distribute loads across the entire system. The
capacity to coordinate is an essential but often
overlooked element of an organization’s eigen-
variety. The more one possesses this capacity, the
better one can mitigate surprises.
Fig. 9 Through System 2, the eigen-variety of the overall system
can be strengthened.
Author: Wolfgang Lassl 8 / 12
3.2. System 3
System 3 is responsible for the control of all
operational units, the generation of synergies, and
the optimal allocation of resources across the
entire system (Fig. 10). System 3 has to fulfill this
function not only today but also across time. Put
simply, System 3 of
every organization is
responsible for building
up reserves and buffers
to be used in bad times.
Here too, the relevance
of a well-functioning
System 3 for the crisis
can be seen: those
countries that have
done well in good times
and that now have the
necessary financial
reserves will master
the crisis more easily.
They can take on debt based on their
creditworthiness, in order to increase the eigen-
variety in their health care system (e.g., by
purchasing medicines and equipment) or in order to
preserve the eigen-variety of their economy through
subsidies, financial protection schemes and
economic programs.
3.3. System 3*
System 3* is responsible for a very vital process in
every social system
(Fig. 10). Usually, and
somewhat
simplistically put, it is
equated with the audit.
But there is more to it:
System 3* offers the
overall management a
direct channel to the
operations to learn
about their particular
problems and
weaknesses, in order
to further improve
them in collaboration
with the operations.
However, that
presupposes that we
are able to identify these
problems and further that we want to know them.
Those who try to ignore them lay the basis for
unpleasant surprises.
Here too, we have been able to witness serious
problems: The fate of the Chinese doctor, who was
the first to draw attention to Covid-19, but was
silenced by his authorities, is probably the most
telling example of a malfunctioning System 3*
channel.
The consequences of Covid-19 are fatal, as we now
know, and have resulted in the destabilization of the
entire globe. Not perceiving or even refusing to
perceive warning signals, mutes this channel. And
this is an even more alarming warning signal
regarding the viability of an organization or system
and may be understood as a leading indicator for
future crises.
3.4. System 4
Preparation is everything. Developing scenarios and
strategies is one of System 4’s central tasks. These
processes are summarized in the VSM in System 4
as the "lookout" of the organization. Every
organization and every social system needs a
System 4.
But merely having this lookout is not enough.
Calibrating the balance between System 3
(operational control) and System 4 is at least as
important for the adjustment of an organization
(thick arrows between System 3 and 4 in Fig. 12).
Fig. 11 The exchange between Systems 3 and 4 (thick arrows)
is one of the most important adaptation processes in
organizations.
In many organizations, strategies and scenarios are
continuously being developed. There is no shortage
of them. However, the problem lies in deciding on
and implementing them, because, in practice,
System 4 is often inferior to System 3. Innovations,
scenarios, and strategies are ignored and not
implemented because they are still too far away or
are superimposed by current operational problems.
In addition, System 4 does not have direct access to
the resources for the implementation of strategies
Fig. 12 System 3* indicates the
overall control to operational
imbalances.
Fig. 10 Every organization needs
a System 3 that ensures
synergies and reserves.
Author: Wolfgang Lassl 9 / 12
or innovations, as every strategy or R&D department
will be well aware.
Virus threats such as Covid-19 were not unknown.
Researchers had already simulated such an
emergency in scenarios (Lee & McKibbin, 2004;
Merlot, 2020). The WHO had also warned of such an
epidemic (Becker, 2020). However, do researchers
and experts have enough weight in our health care
system or society that their recommendations are
implemented? Those who want to avoid future
crises will need to respond to this question and
revisit the calibration of the current balance
between Systems 3 and 4 in our society.
3.5. Communication
The VSM is not just an organizational model, it also
describes the main communication channels within
an organization. Each line in the VSM corresponds
to a communication channel. If you look at the
number of lines, you can see the importance of
communication in the VSM and in organizations.
There are four types of problems in the information
system, which are particularly relevant in crises:
1. Overloading the information channels with to
too much information
2. Too many different sources of information 8,
3. Problems with the choice of language and
terminology (i.e., translation problems9) and
finally,
4. The dissemination of false information (“fake
news”).
If you take a closer look at the crisis, you will be able
to identify problems of one kind or another in your
country or organization to varying degrees.
We will not be able to avoid these problems entirely,
but we can reduce them, firstly, if we are aware of
these four main sources and secondly, if the
required extra capacity is included or induced into
the information system. This extra capacity is
required due to the increased probability of errors
and malfunctions. This applies in normal times10,
but due to the heightened intensity, especially in
crises. Measures to increase the capacity can range
from extra-staff for call centers to additional media
presence of a country's government and
administration.
Intensification is not to be understood here in terms
of augmenting content variety, i.e., trying to address
as many different topics as possible. Instead, it
means expanding the information capacity so that
the necessary messages can reach all people and
are sufficiently well understood. Clarity must be the
goal.
Only if information clarifies our understanding, does
it increase our sense of security and stability. From
the vantage point of the VSM, information policy
must, therefore, seek to absorb the additional
variety that has emerged in a crisis, i.e., the
unprocessed variety in the system, in order to
reduce people's confusion. Only then do people feel
secure and safe again.
The leadership of a country must thus gather all the
necessary experts who are able to help it absorbing
this additional variety this will be the yardstick, by
which the leadership is judged. However, the
additional eigen-variety provided by the experts
(which is their purpose and nature) challenges the
eigen-variety of the leaders, to the point where the
question might arise who leads the country: the
leaders or the experts? A delicate balance between
the laws of politics and knowledge needs to be
found by all who participate in the decision-making
process. The viability of the country and every
organization hinges on this.
4. Challenges to the International Cooperation
Going up to the international level, we also see that
many control and coordination mechanisms, which
are necessary according to the VSM, are missing or
need to be further developed in the Covid-19 crisis.
8 This arises from fragmented system functions.
9 Here, we do not refer to the differences between
languages of people, but between different conceptual
worlds, terminologies and styles of expression within a
social systems (e.g., top management compared to
States are sovereign under international law, and no
state can interfere in another. However, pandemics
do not adhere to the limits set by international law.
Covid-19 is a cross-border phenomenon and
consequently, cross-border cooperation and control
employees or government and population). In VSM
terminology, this is a calibration problem of the so-called
“transducers” (see also the so-called 3rd Principle of
Organization in: Beer, 1995).
10 See Beers 2nd Principle of Organization (Beer, 1995).
Author: Wolfgang Lassl 10 / 12
processes are required, as the IMF recently
demanded (Becker, 2020; Zöttl, 2020).
The need for cooperation follows necessarily and
can be anticipated. In the VSM, we can show why:
the existence of interfaces can cause oscillations in
the entire system. Each social system can be
viewed as a system with multiple equilibrium
systems. If its elements are connected with each
other, then changes in one element will be
transmitted to the others. This is like the game
Mikado: drawing one stick out of the pile can cause
the entire pile to collapse. This also applies to the
international community of nations: through
interfaces and connections, changes in one country
affect others.
To control the system, mechanisms are thus
required that reduce the oscillations and re-
establish equilibrium. In the VSM, this is the task of
System 2 to 5. In the case of Covid-19, we see that
these system functions are not fully or not at all
developed (Fig. 13).
The VSM helps us to walk through these
dysfunctionalities: Weaknesses surface, for
instance, in the joint coordination of activities
between states and the exchange of information (a
System 2 that is too small).
In the context of the EU, for example, we find the
problem of a System 3 that is still too weak and
hardly possesses any mechanisms to support
financially weak member states burdened with the
debts caused by Covid-19.
World leaders such as E. Macron and A. Merkel or
the president of the EU commission, U. v. d. Leyen
have called for such global support measures that
help Africa which is financially weak but essential
for ending the crisis (Macron et al., 2020).
It takes a globally acting System 3 that ensures that
(financial) resources are redistributed to poorer
regions. To create such a System 3 at the global
scale means that the heads of governments come
together and develop and agree on mechanisms on
how to best allocate the resources.
The key question often arises at this point regarding
the specific responsibilities of the various levels
such as the international, national, regional, or local
level. The allocation of tasks, responsibilities and
resources across these “recursion levels”, as they
are called in the VSM, must follow the subsidiary
principle. Tasks that are better accomplished at a
lower level should not be taken over by higher levels.
Consequently, in matters of national and
international cooperation, a good understanding
needs to be developed regarding which level is best
suited to undertake counter-measures. If the level
chosen is too low, then the counter-measures will
not be sufficiently well coordinated. If the level
chosen is too high, the measures will not be
adequately well targeted as well as their
implementation might become delayed and
bureaucratic.
The international community will face a significant
organizational challenge when people are again
allowed to travel between countries. A strong
System 3* will be required to check and ensure
compliance of all states with all counter-measures.
We will be able to enter a country only if the country
of origin complies with all regulations. However,
who, in turn, checks this country to see if the
information provided on infection rates, for
instance, is truthful? The international community
of states will yet need to develop the appropriate
System 3* processes and monitoring systems.
Fig. 13 Selected dysfunctionalities in dealing with the Covid-19
crisis internationally
Too little is known about the virus and much less
about the (side) effects of possible vaccines. Our
eigen-variety regarding the virus is still too small
and an essential task is, therefore, to strengthen it,
primarily through the continuous exchange of
knowledge.
To combat Covid-19 quickly, all research initiatives
worldwide for a vaccine that are undertaken by
states or companies must, therefore, be brought
Author: Wolfgang Lassl 11 / 12
together to a joint effort and a global research
project (System 4). Selfishness and limiting the
exchange of knowledge, be it between states or
pharmaceutical companies, in order to maximize
profit and reputation, merely reduce the eigen-
variety of the world population to fight Covid-19
(Pitzke & Köppe). But do we truly want this? What
carries more weight: the well-being, self-promotion,
and profit of a few or the common good?
We have now reached the realm of ethics and the
value hierarchies of individual actors such as states,
companies, or individuals. The global pandemic
again reminds us of the role that values play and
how important it is to have shared principles and
values (System 5).
Here, too, Covid-19 has already revealed fractures:
be it in the handling of information within the
framework of the different information and media
policies of states, or in dealing with Covid-19 itself
(isolation of the population or relying on herd
immunity as in the UK) or concerning the solidarity
for other countriesdebts as a result of Covid-19
(euro bonds). Without this common set of values
and principles, however, it is challenging to act
together and quickly, and thereby help human
civilization to fight the virus.
Little can be predicted about the course of the
Covid-19 crisis. However, one thing seems to be
certain: if the international community wants to
overcome this crisis quickly and survive it
somewhat unscathed, it will have to install or
develop further processes and mechanisms along
the VSM. The VSM provides a blueprint of what it
takes organizationally to master the crisis.
Covid-19 shows us, in turn, why the VSM, the model
of viable systems, was named so by Stafford Beer:
Organizing means ensuring the long-term viability
of the system, be it that of a health care system or
that of an organization. The VSM provides us a map
and some crucial hints regarding what a system
needs to become viable. It is up to us to implement
them.
Further reading:
Becker, M. (2020, April 19). WHO wirft Regierungen schwere Versäumnisse vor. Der Spiegel.
https://www.spiegel.de/politik/ausland/corona-krise-who-wirft-regierungen-schwere-versaeumnisse-vor-a-
7b45f98c-b6f2-4a93-845b-690ade8e53d4
Beer, S. (1984). The Viable System Model: Its Provenance, Development, Methodology and Pathology. The Journal of
the Operational Research Society, 35(1), 7. https://doi.org/10.2307/2581927
Beer, S. (1994). The heart of enterprise. John Wiley & Sons.
Beer, S. (1995). Diagnosing the System for Organizations (1 edition). Wiley.
Espejo, R., & Reyes, A. (2011). Organizational Systems. Springer Berlin Heidelberg. https://doi.org/10.1007/978-3-642-
19109-1
Hill, A. (2020, April 20). Covid-19 lays bare managers’ efficiency obsession. FT. https://www.ft.com/content/aa4b16c4-
7ffa-11ea-8fdb-7ec06edeef84
Hoverstadt, P. (2008). The fractal organization: Creating sustainable organizations with the Viable System Model. John
Wiley & Sons.
Lassl, W. (2019). The Viability of Organizations Vol. 2: Diagnosing and Governing Organizations. Springer International
Publishing. https://doi.org/10.1007/978-3-030-16473-7
Macron, E., von der Leyen, U., & Merkel, A. (2020, April 14). Only victory in Africa can end the pandemic everywhere. FT.
https://www.ft.com/content/8f76a4c6-7d7a-11ea-82f6-150830b3b99a
Pérez Ríos, J. (2012). Design and Diagnosis for Sustainable Organizations. Springer Berlin Heidelberg.
https://doi.org/10.1007/978-3-642-22318-1
Pitzke, M., & Köppe, J. (s. d.). Das Impfstoff-Duell. Der Spiegel. Consulté 26 April 2020, à l’adresse
https://www.spiegel.de/wissenschaft/medizin/corona-die-suche-nach-dem-impfstoff-donald-trumps-
wettlauf-gegen-china-a-2042a976-2afb-435b-943d-5ca4991efb0a
Ramachandran, S. (2020, April 20). WSJ News Exclusive | New York Nurses Allege Inadequate Safety Protocols in
Lawsuits Against State, Hospital Systems. Wall Street Journal. https://www.wsj.com/articles/new-york-
nurses-allege-inadequate-safety-protocols-in-lawsuits-against-state-hospital-systems-11587389607
Schwaninger, M. (2006). Intelligent organizations: Powerful models for systemic management. Springer.
Spinney, L. (2020, April 26). Germany’s Covid-19 expert: « For many, Im the evil guy crippling the economy ». The
Guardian. https://www.theguardian.com/world/2020/apr/26/virologist-christian-drosten-germany-
coronavirus-expert-interview
WHO. (2017). Pandemic Influenza Risk Management. A WHO guide to inform & harmonize national & international
pandemic preparedness and response. WHO.
http://www.who.int/influenza/preparedness/pandemic/influenza_risk_management_update2017/en/
Author: Wolfgang Lassl 12 / 12
Zöttl, I. (2020, April 14). Frühjahrstagung von IWF und Weltbank Globale Krise ohne Gemeinsamkeit. Der Spiegel.
https://www.spiegel.de/wirtschaft/iwf-fruehjahrstagung-globale-krise-ohne-gemeinsamkeit-a-a6355946-
4d6e-4144-83f0-d0d2e5214b46
Fig. 3, 4 and 6: Reprinted by permission from Springer Nature Customer Service Centre GmbH from Lassl,
W. (2019). The Viability of Organizations Vol. 2: Diagnosing and Governing Organizations. Springer
International Publishing, Fig. 3.2, 3.11 and 3.12
ResearchGate has not been able to resolve any citations for this publication.
Book
Organizations are complex social systems, and dysfunctionalities can settle in very quickly and almost unnoticed, costing valuable time and resources. In a highly volatile and complex world where mistakes are virtually unforgivable, the ability to rapidly and accurately diagnose dysfunctionalities, and familiarity with the right governance and leadership principles, have thus become vital for organizations’ success. This volume, the second in a set of three, introduces readers to the Viable System Model (VSM)-based diagnosis and governance of organizations. Readers will be familiarized with a broad range of dysfunctional patterns that can impede an organization’s viability, while also deepening their understanding of organizational viability gained in Volume 1. This volume examines in detail the highly dynamic nature of organizations, the multiple equilibrium systems that need to be kept in mind, and the intricate nature of leadership in organizations. It addresses fundamental organizational and managerial issues/topics such as the functioning of hierarchies, the “right” degree of centralization, the various challenges throughout an organization’s lifecycle, and the vital role of conflicts for organizational health. The insights derived from the VSM in this volume will provide readers with a comprehensive, nuanced, and sound conceptual foundation for questions concerning the diagnosis and governance of organizations, the tasks, challenges and principles of leadership, and the implementation of strategies in organizations.
Book
Preface During 1971–1973 the first author of this book was involved in Project Cybersyn in Chile. This was conceived by the cybernetician Stafford Beer for the recently elected government of Salvador Allende (Beer gives a vivid account of this work in the second edition of his book Brain of the Firm, 1981). This project was a holistic attempt to address issues of governance in Chile, with particular emphasis on the management of complexity. Far from the centralist approach characteristic of planned economies and the laissez-faire approach characteristic of the capitalist economies, Beer was offering a ‘third way’ that required the contribution of all stakeholders in the creation, regulation and production of the country’s industrial economy. He made it clear that, since this economy was exceedingly complex, any attempt to ‘represent’ it in a plan was doomed to failure, and any attempt to rely exclusively on market forces naively assumed a fair distribution of information and decision capacity in society. This ‘third way’ was performative in the sense that all stakeholders required learning platforms to develop their capabilities for adaptation and change. The embodiment of this platform was his Viable System Model (Beer 1972), which is the main focus of this book. The emphasis of the work in Chile was creating communication and information networks to support distributed decision� making and to give stakeholders resources to coordinate their actions throughout the economy. Independent of the historical events that aborted Allende’s govern�ment, the experience of being involved in the project made apparent that Beer’s approach was bold but too optimistic; producing effective relationships between stakeholders and policy-makers was far more complex than building up communi�cation networks and information systems. Relationships became the main concern of the next large cybernetic project, this time with the contribution of both authors. In the mid 1990s both authors were involved in a large project aimed at improving the auditing practices of the National Audit Office of Colombia (Espejo 2001; Espejo et al. 2001; Espejo and Reyes 2001; Reyes 2001). The aim of this project was to support organizational learning and create effective structures at all levels of government with the support of the Viable System Model. We expected that an ongoing auditing of communication mechanisms in government and other public institutions could help diagnose necessary improvements to reduce the misuse of resources and to improve their deployment. The thrust of this work was building up trust between stakeholders and reducing corruption. For 4 years we supported auditors of government institutions in this endeavour. Afterwards a post-graduate programme in systemic auditing was set up at the Universidad de Los Andes to continue the training of new generations of auditors. The emphasis of all this work was more appreciative of relationships than making information available. Its impact may take several years to get a fair assessment. However, its evolution has clearly confirmed that changing organizational structures, in particular the relationships that produce them, is a tall order that requires more research. This book is a contribution to this research. Hundreds of organizations were diagnosed and more organizations of all kinds continue to be diagnosed using the same method in varied contexts. No one should be surprised that many of our examples in this book come from this experience. However, our purpose here is not a report of this work; it is sharing our understanding of the Viable System Model and more specifically of the main tools underpinning the work in Colombia: the Viplan Method and the Viplan Methodology. The book’s aim is to clarify the application of cybernetic ideas to organizational design and problem solving in organizational systems. In Part I the reader goes through a journey that starts with making a simple distinction in a background and ends up with a model of the organization structure of any viable system. This journey continues in Part II, with a method to model these structures and to braid business, organizational and information processes, which opens the space for a detailed management of complexity in organizations. Finally in Part III we acknowledge that often people in organizations experience problematic situations that can be ameliorated or dissolved by improving the structures in which they emerge. This part offers methodological support and highlights how to think systemically when experiencing these problematic situations. The three parts offer a comprehensive journey through which readers hopefully will learn to appreciate the complexity of organizational problem situations and the relevance of seeing the systemic coherence of the world. The book argues that many of the problems we experience in enterprises of all kinds are rooted in our practice of fragmenting what needs to be connected as a whole. The scope of this book is the management of complexity in an uncertain world. It builds on Ashby’s Law of Requisite Variety (Ashby 1964) and Stafford Beer’s Viable System Model (Beer 1979, 1981, 1985). Its contributions are methodologies to deal with problem situations and a method to study, manage and engineer an organization’s complexity. Organizational cybernetics is capturing the imagination of many; unfortunately so far there has been limited methodological support to make effective use of this body of knowledge. Beer’s work, in particular his book Diagnosing the System for Organizations (Beer 1985), offers a guide to apply the Viable System Model but not an epistemology to understand organizations. Several books have been published recently on organizational cybernetics (for instance Achterbergh and Vriers 2009; Schwaninger 2009; Christopher 2007) limited methodological support. Our book attempts to fill this gap. It is the outcome of many years of working in projects such as Cybersyn and the project with the National Audit Office of Colombia, as well as work with all kinds of public and private enterprises throughout the world. At a more detailed level we offer an in depth discussion of variety engineering that is not available either in the primary or secondary literature. Variety engineering helps directly in the design of organizational, business and information processes. Here we offer the Viable System Model (VSM) as a problem solving heuristic. This model is of increasing relevance in today’s digital world. It is built using the concept of variety, a measurement of complexity, which helps to map the proliferating states of our day-to-day situations. Radical tools for this type of mapping were unavailable before the digital revolution. Today communications and computers make possible not only globalization but also dealing with business tasks beyond anything that was possible in the pre-digital world. Organizations are already achieving higher performance with fewer resources, but the scope for further improvements is indeed large; this is the scope for variety engineering in this book. The VSM is used as a tool to study the systemic context of processes in organizations and to reconfigure the use of their resources with the support of new technologies. They offer the possibility to respond with ingenuity to challenging situations. The Viplan Methodology explained in Part III is used for this reconfiguration, which is supported by the Viplan Method developed in Part II. This method (Espejo 1989) helps to work out the boundaries of organizational systems, modelling organizational and environmental complexity, working out strategies to manage this complexity and distributing accountability and resources in the organization. It offers a framework to braid the organization’s value chain with regulatory and informational processes. This framework, a detailed application of variety engineering, helps to work out strategic, structural and informational aspects of an organization. This book should be particularly relevant to students of management, organizational/industrial engineering and information/knowledge management. Indeed not only students but managers, civil servants, policy-makers and community operators can benefit from a novel way of understanding relationships and organizational processes. Naturally, this book should also be of interest to academics carrying out research and teaching in the above topics. Last but not least, these topics should be of interest to consultants involved in managing change in organizations. The book offers many ‘real world’ examples and its emphasis is on diagrams rather than on mathematics, but requires the reader’s maturity to relate abstract ideas to personal experience and practice. November 2010 Raul Espejo Alfonso Reyes
Book
Design and Diagnosis for Sustainable Organizations The Viable System Method Jose Perez Rios - Find out if your organization is prepared to survive - Learn in a short time how to diagnose the health of your company - Find out why your organization does not meet your expectations - Why many firms and organizations are unable to survive the current systemic crisis How can organizations and their managers face the tremendous complexity of the current environment? How can their compliance with the requirements of sustainability be evaluated? And how can new organizations be structured to ensure their viability? This book addresses these questions in a very practical way, essentially combining systems theory with cybernetics to help managers to evaluate and shape organizations by making accessible the wealth of knowledge contained in these fields. Importantly, it also provides guidelines for its practical application.
Article
This innovative book opens a path to overcoming the crisis of management in the face of complexity. The systems approach on which this work is grounded enables the development of the new kind of intelligent organizations so urgently needed. Powerful models, grounded in organizational cybernetics and system dynamics, are presented in a way that lets the reader immediately apply them in practice. This book will be a source for improvement in any kind of organization, whether private or public, non-profit, large or small.
WHO wirft Regierungen schwere Versäumnisse vor
  • M Becker
Becker, M. (2020, April 19). WHO wirft Regierungen schwere Versäumnisse vor. Der Spiegel. https://www.spiegel.de/politik/ausland/corona-krise-who-wirft-regierungen-schwere-versaeumnisse-vor-a-7b45f98c-b6f2-4a93-845b-690ade8e53d4
The Viable System Model : Its Provenance, Development, Methodology and Pathology
  • S Beer
Beer, S. (1984). The Viable System Model : Its Provenance, Development, Methodology and Pathology. The Journal of the Operational Research Society, 35(1), 7. https://doi.org/10.2307/2581927
Covid-19 lays bare managers' efficiency obsession
  • A Hill
Hill, A. (2020, April 20). Covid-19 lays bare managers' efficiency obsession. FT. https://www.ft.com/content/aa4b16c4-7ffa-11ea-8fdb-7ec06edeef84