Scaling Innovations for Sustainability: Theory and Contributions from the VSM

1. Scaling Innovations for Sustainability: Theory and contributions from the VSMJ Walker * / A. Espinosa ** * Independent researcher ** Hull Business School

2. Organisation as Nature Intended 1 Study the way natural systems work. Generalise your findings into a universally applicable model. 2 Apply to groups of people, businesses, eco-systems, villages, cooperatives, nations 3 VSM, Coops, Sustainability. 2013

3. Invented by Stafford Beer • Developed during the 1950’s while he was a manager in the UK steel industry. • It was a response to his dissatisfaction with traditional approaches to management. • His theories resulted in significant increases in productivity. Developed as a practical tool : not an academic theory VSM, Coops, Sustainability. 2013

4. Grounded in systems thinking. Not like this . . . . like this! A B C D It’s about seeing the world as patterns of relationships . . . . . .whole systems interacting with other whole systems, in a dynamic, co-evolving dance. VSM, Coops, Sustainability. 2013

5. Where to find Inspiration ?Use the human body ! Study the sub-systems and the patterns of relationships which explain how the brain and nervous systems regulate the muscles and organs . . . . . . find the universal principles . . . . . . make a model ! VSM, Coops, Sustainability. 2013

6. and . . . it works ! • Worldwide the biggest expert team for consulting and education in holistic management systems (St. Gallen, Zurich, Vienna, Berlin, London, Shanghai) • 300 employees • 30 years experience • All their work firmly rooted in organisational cybernetics. • See www.malik-mzsg.ch William F. Christopher. President of The Management Innovations Group. After a management career in industry, he worked with more than 100 businesses in sixteen countries. All his work is based on the VSM. VSM, Coops, Sustainability. 2013

7. VSM: The Central Concept Most fundamentally – the VSM looks at an organisation as a cluster of autonomous, self-organising parts which come together to form a new, larger whole. Not like this . . . . . like this ! VSM, Coops, Sustainability. 2013

8. Complexity & Variety • Ashby (1964): • Complexity: ‘the potentiality of a system to exhibit different states’ • ‘Variety’: • the number of possible states a system is capable of exhibiting; • a repertory of potential behaviours • a measure of perceived complexity • An ‘observed system’ is described by a group of variables that an observer recognizes in a real situation and this is always determined by the observer’s complexity.

9. The Law of Requisite Variety • The law of requisite variety states that ‘only variety can destroy variety’. In order to control a system, we need to have as much variety available to us as the system itself exhibits. • A viable system should always be seeking to increase its variety of response to environmental disturbances. • It can do this by synthesising different experiences to effectively respond to similar situations in the future. • Learning: requires exposure to different situations • ‘Making distinctions’ - a vital element which enables the increase of the variety of response

10. Basic Assumptions • Operation, Meta-system and Environment • A Meta-system which enables the Operational elements to come together to form a new, larger, whole system. • Operational autonomy limited only be system cohesion. • Nested, recursive systems within systems within systems . . . • Continuous, dynamic, co-evolving interactions, based on real-time information. This is the basic unit of analysis: a whole system co-evolving with its environment VSM, Coops, Sustainability. 2013

11. Systemic Balance Good design means the parts of an organisation are properly balanced. The Meta-system must have the capacity to deal with the complexity of the Operation for which it provides cohesion. The whole system must be in balance with its environmental niche. The more complex and chaotic the Environment, the more capacity and flexibility the system must have. The Operation must have the capacity to deal with the complexity of the environment in which it operates. Good design means dealing with complexity through balancing systems VSM, Coops, Sustainability. 2013

12. The Viable Systems ModelThe Five Systems VSM, Coops, Sustainability. 2013

13. Viable Systems Model – the form of the model. VSM, Coops, Sustainability. 2013

14. The 5 Systems S1 - Operation, primary activities S2 - Conflict resolution S3 - Synergy, internal regulation S4 - Adaptation, scanning and planning S5 - Closure, policy, identity All 5 systems need to be present, properly inter-connected and fit for purpose VSM, Coops, Sustainability. 2013

15. Inside-and-now: Outside-and-then System 5 - formulating policy, monitoring, intervening when needed. Outside and Then. System 4 making plans in the context of information from outside, and information from System 3 Inside and Now, Systems 1, 2 and 3 maintaining the internal environment, keeping it running as effectively as possible. Balancing autonomy and cohesion. System 1 doing its job in the context of a changing environment VSM, Coops, Sustainability. 2013

16. Implications for organisations • Re-distribution of responsibilities: Based on variety management • True democracy: Devolved control to operational levels • Meta-systemic management: not ‘cognitive autocracy’ • Performance management: based on self-regulating units • Need for greater democracy and power equalization • Continuous transformation, based on self-organization. • ‘Order generating rules’: to overcome the limitations of rational, linear, top-down, strategy-driven approaches to change.

17. Societal development Dominant Paradigm • Selfishness • Never ending economic growth • Top down, hierarchical organisation  • Authoritarian, coersive control • Competitive • Centralised politics (exclusion, cynicism) • Measuring economic indicators • Avoiding Complexity/ being slave of unmanaged complexity Societal development Complexity Paradigm • Social consciousness • Sustained viability • More autonomy at local levels • Self-regulation, self-organisation • Balance competitive/cooperative • Participatory democratic politics (high self-esteem) • Measuring individual and society well being • Managing Complexity • TransitionManagement • Sustainable Governance

18. Complexity in Practice

19. The Viable Systems Model In Action VSM, Coops, Sustainability. 2013

20. Case Study. Diagnosis • Recursions unclear • Insufficient autonomy in Operational groups. • Weak (absent) Systems 3 and 4 at Company recursion • Lack of measurement systems and KPIs. Intervention • Recursions clarified. • Autonomy of Operational groups enhanced, • New jobs created for Systems 3 and 4 at Company recursion • Performance measurement systems and KPIs designed and implemented based on daily figures. Results • Improved productivity/profit/service level. • More enjoyable working environment. VSM, Coops, Sustainability. 2013

21. Case Study: Chile 1973. VSM, Coops, Sustainability. 2013

22. Action Research • Project Based Learning: • What do we need to do? • What do we need to learn to do it? • What’s the most useful approach to this topic? • What have we learned while doing it? • What are the new learning needs? Experiencing Reflecting Taking Action Interpreting

23. Cloughjordan Eco-village: Case Study VSM, Coops, Sustainability. 2013

24. Cloughjordan Eco-village: Case Study 2009 • Design of Primary Activity Groups • Design of new systems 3 and 4. • Re-thinking role of Board • Application within other primary activities (lower level of recursion) VSM, Coops, Sustainability. 2013

25. Magdalena River Basin Diagnosis of whole Magdalena river basin. Creation of new institutions to deal with entire system. Cohering fragmented governance systems to manage bio-region. VSM, Coops, Sustainability. 2013

26. On-going HQ re-organisation. • Design of European research network. • Proposed recursive diagnosis of entire British Permaculture community. VSM, Coops, Sustainability. 2013

27. The VSM and Sustainability VSM, Coops, Sustainability. 2013

28. Closing Statements (1) • We use the VSM as a meta-language for coaching organisational members on ways to understand and manage the complexity of their interactions • Organisations can be designed to be highly efficient and profitable, and based upon individual creativity and work-team self-organisation. • An organisation can be designed to be in balance with both it’s market and it’s eco-system. A VSM application can be extended to create a sustainable economy • Organisations can be designed to be highly efficient and profitable, and based upon individual creativity and work-team self-organisation. • Co-operatives and NGOs and organisations working for ethical/ social wellbeing purposes are the perfect setting for applying the VSM • Democratic control and participation • Ownership by all encourages identity with the whole system. Work-team autonomy and individual creativity Ownership by all encourages identity with the whole system. VSM, Coops, Sustainability. 2013

29. Examples: How the VSM can support the BALTA project • What is the relationship of social economy ownership and democratic decision-making models to the effective scaling out and scaling up of sustainability innovations? • What kinds of scaling up and scaling out of sustainability innovations are occurring in each of four sectors (food, energy, finance, shelter)? What is role of social economy actors in this work? • What is occurring at each level of innovation: micro/grassroots; meso/regime; and macro/landscape levels, and how is work at various levels combined in process of spreading an innovation? Who does this work? How should we study this range of SIS work? • Modeling and identifying current governance schemes and suggesting improvements when necessary • Mapping a regional or sub-regional socio-ecological system, its key ‘primary sectors’, identifying institutional networks involved and suggesting networked governance schemes • Using a unified conceptual framework to model institutional networks at the meso and macro and micro levels

30. Examples: How the VSM can support the BALTA project • What happens to the innovations as we essentially create new meta-networks to diffuse or extend them to region, province or nation ? • Are innovations from one sector being used in another (land trust, ULC)? • How will our findings impact communities? • Designing the meta-networks • Mapping sectoral innovators • Providing a model for impact measuring (not just financial)