Viable System Model
What is it?
The Viable System Model (VSM) is a management tool that can be used to assess the viability of an organization or company, in other words its ability to fulfill its purpose and to adapt to its continuously changing external environment. VSM can be used to identify problematic points in the organization’s management, as well as actions to tackle them.
Why is it important?
We live in an age where the increasing complexity and speed of arising crises renders the known management theories more and more outdated. The Viable System Model (VSM) is a tool to quickly and effectively improve the whole performance of an organization, meet its targets and adapt to its continuously changing corporate environment. The VSM is based on the solid foundations of systems and cybernetics science and has been successfully applied to organizations and companies of all types and sizes.
The VSM can help an organization to:
- identify the points critical to its survival
- distinguish its Operational and Managerial parts
- optimize its control and coordination functions
- maximize the autonomy of its parts/departments without losing total control
- create a competitive advantage through a more effective organizational structure
The services of Close the Loop concentrate in two levels as it concerns the Viable System Model:
Level 1 - Diagnosis
This level involves a thorough assessment of the organization in order to identify the main points that pose a threat to its survival. The diagnosis results are compiled and communicated through a specialized System Diagnosis Report.
Level 2 - Design/Implementation
At this level, the diagnosis results are used for the optimization of the existing organizational structure, or the Design of a new more effective organizational structure. Moreover, we support the implementation of the proposed solutions, by conducting specialized VSM Workshops and supervising their proper application.
The VSM can be directly used at Level 2 for the effective design and development of a new organization (start-up) or a new business unit.
Develop survival skills in times of crises
Develop the organization’s adaptability
Discover opportunities to reduce costs through a simpler more effective management structure
Take advantage of autonomy in order to maximize effectiveness
Balance and harmonize internal processes
More effective management of customer and suppliers
The Viable System Model was developed by the systems and cybernetics scientist Stafford Beer. Beer, using the generic principles of cybernetics, studied the human organism as the perfect example of an organization that can adapt, be autonomous and survive. He found that all organizations irrespective of their size (from a human being to a multinational company) or type (e.g. public or private sector) must perform 5 basic processes in order to survive:
- Policy (higher purpose, values, orientation, identity)
- Intelligence (research and development, adaptation)
- Control (coherence, synergy)
- Coordination (stability, operational harmonisation)
- Operations (implementation, fulfillment of purpose)
The VSM has been and is still being successfully implemented in organizations of all types and sizes. The most important implementation of VSM was done by Beer himself in Chile, during the famous Cybersyn Project with remarkable results.
Close the Loop has a high level of scientific knowledge and experience in the application of the Viable System Model, both in the academic and business fields. Our methodology for a VSM diagnosis consists of the following steps:
Determination of the actual Purpose of the organization
Identification of the requisite internal structure to fulfill the organization’s Purpose
Identification of the organizational elements/processes responsible for Coordination, Control, Intelligence and Policy