Kurt Lewin* is supposed to have said that nothing is so practical as a good theory. In my experience, action‐focused people can be uneasy with theories, which are just tools for thinking and making propositions visible, explicit and testable by others.

I would like to try out some thinking on the usefulness of the Viable Systems Model (VSM), which describes how systems interact with their environments. The VSM has not had widespread exposure in the management literature outside of a band of devotees. This is a pity because it offers valuable insights for enterprises trying to do business within increasingly complex, inter‐connected and fragmented environments. Specifically it:

• encourages structured thinking about sensing environmental change

• shows how responsibilities for core management functions have to be distributed throughout an organisation for it to remain viable

• explains mechanisms for integration and coordination

• explains how to achieve maximised local autonomy simultaneously with centralised coordination

It would be too much to tackle in one blog post so I will spread it across a few posts. Two core principles underpin the VSM: recursion and requisite variety. The rest of the post tries to explain requisite variety.

Requisite Variety

Led by Gary Hamel, a gathering in of thirty five of “the world’s most progressive thinkers on management and organisation” compiled a list of twenty five stretch goals for management, Management Moonshots, ten of which were ‘regarded as uniquely critical.’ One of the ten was:

“reinventing strategy making as an emergent process … in a turbulent world, strategy making can no longer be a top down activity. What is required instead is a strategy process that reflects the biological principles of variety, selection, and retention.”

What is variety and why did the conference of management thinkers single it out as a critical issue?

Variety describes the occurrence of distinct elements from among a set. For example, the set ‘c,b,c,a,c,c,a,b,c,b,b,a’ has twelve elements but only three that are distinct. The set is said to have a variety of three (Ashby, 1956). In practice, variety is an heuristic indicator of complexity.

Requisite variety implies that a system’s responses to its external environment must match it in complexity. It does this in two ways: by trying to attenuate and amplify complexity.

Amplification

Amplifiers increase variety.

Amplification creates diversity of opinions and perceptions, and organisations have to be “preoccupied with keeping sufficient diversity inside the organisation to sense accurately the variety present in ecological changes outside it.”(Weick , 1979). Surely organisations are already richly‐diverse ecosystems, full of differences in personal values, experiences, perspectives, beliefs, professional, organisational and national cultures, emotional states and so on?

Diversity creates conflict that has to be managed, as well as tensions and tradeoffs that managers have to work with constantly. Tannenbaum’s comment about “circumscribing idiosyncratic behaviours and keeping them conformant to the rational plan of the organisation” is a reminder that businesses are not comfortable with the mess that diversity creates. Businesses therefore spend a lot of time and effort trying to curb diversity. Despite the management challenges associated with diversity, it is essential for learning, adaptation, and dynamic knowledge creation and innovation.

Hansen proposes that collaboration has to be disciplined to be effective. Using a similar logic, encouraging disciplined diversity provides a tactic for constantly sensing what is happening in external environments.

This matters because path dependency strongly biases businesses to decisions already made, especially where time, money and resources have been committed. Concentrating on core products and services, ‘sticking to the knitting’ (Peters and Waterman, 1981), without simultaneously sensing and responding to environmental change creates opportunity for disruptive innovators opportunistically to take advantage of these developments under the noses of the inflexible dinosaur companies heading for crisis (Christensen, 1997).

Encouraging diverse perspectives is consistent with the principle of requisite variety. It contributes to cultures where constant questioning prevents the sort of rigidity that ultimately seems to have prevailed within General Motors. Responsibility for embedding these sorts of practices lies principally with leadership influencing cultural norms through behaviour and indicating what is acceptable and unacceptable by actions.

An amplifying strategy for a business would be to recognise, elicit, value and deploy the brain power of its whole workforce, including partners within its supply eco‐systems. Continuous improvement and problem‐solving, so integral to lean and quality, the last wave of disruptive management innovation, are examples of amplifying responses.

Social technologies are now creating phenomenal potential to energise creative, collective intelligence, launching a new wave of management innovation and unprecedented access to exponential requisite variety.

Attenuation

Attenuators try to reduce the amount of complexity in a systems.

A dominant business response over many decades has largely been misplaced attenuation, focused in the wrong direction towards controlling people and their behaviour ‐ the very people whose knowledge and collective intelligence are so essential for competitive fitness.

More than that, enterprises in their attempts to regulate and control people add additional management layers that create top heavy oganisations. The proliferation of organisational layers imposed to control “idiosyncratic behaviour” can instead create crippling bureacracy, which adds significantly to management overheads, stifling diversity and creating dysfunction.

I was going to launch into a musing on Cherns’ (1976, 1987) sociotechnical principles of system design, the principle of Minimum Critical Specification, because adding unnecessary management layers offends against it. I will save that discussion for another post – oh, joy I hear you say . Very interesting, in fact.

*Lewin, K. (1951). Field Theory in Social Science: Selected Theoretical Papers. D.Cartwright (ed). New York, Harper Row, p169.