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Highlights
- The viable system model (VSM) was suggested by British expert and leadership thinker Stafford Beer.
- This model ensures that enterprises are stable in their current activities and continuously adapt to external changes to continue to be stable even in uncertain times.
- Retaining employees and encouraging them to cross-skill and multi-task will help organizations lower costs during recession and prepare for the post-recession growth period.
In this article
Design your enterprise for viability
As recession fears loom amid the news of bank failures in the US, enterprises are faced with the challenge of how to prepare for it. One of the ways to look at the preparedness of an organization is through the lens of the viable system model (VSM) suggested by British expert and leadership thinker Stafford Beer.
This model for a viable organization ensures that enterprises continue to be stable even in the times of uncertainty. Beer proposed a conceptual tool for understanding organizations, redesigning them, and supporting change management. It ensures enterprises are stable concerning current activities and develop the capability to continuously adapt to external changes.
Applying the VSM is about structuring an organization’s resilience—the ability to adapt to changes in the environment and survive in line with its purpose. The idea of Beer’s work was thus to build systems that could adjust effortlessly to situations they could not wholly control. Recession comes as a big challenge, as spending decreases but the needs and demands of customers do not decrease
Recession: Before, during, and after
Managing the resources of the organization while ensuring customer satisfaction during and in the post-recession period becomes important. The basic premise of the model is that enterprises should empower their stakeholders, subject to reasonable limitations, if any, to achieve their aim. Beer synthesized the disciplines of cybernetics and management to create systems that satisfied all these principles, and more. The attempt here is to suggest strategies keeping in mind the principles embedded in the model. The focus is on leveraging the ‘law of requisite variety’, proposed by Ross Ashby, which holds that in order to be efficaciously adaptive, the internal complexity of a system must match the external complexity.
The journey would involve planning before, during, and after recession. The enterprise is a living entity, so work towards establishing a cost-optimal structure by trying to minimize damage to people resources. Retaining employees and encouraging cross-skilling and multi-tasking would help the organization keep costs low during the recession period and prepare for the post-recession period.
Prepare to move into growth mode
The change in business environments from uncertainty to growth has its own challenges. Employees need to be mentored to change their mindsets from one of caution to that of optimism. This transition has to be enabled using a multi-pronged approach. Involve the employees in the planning process with constructive inputs flowing from them. Keep them updated on the key business developments that will shape demand. This will help them understand and appreciate the situation and the demands of business. An inclusive journey will help establish a smooth transition from uncertainty to growth.
The change in business environments from uncertainty to growth has its own challenges. Employees need to be mentored to change their mindsets from one of caution to that of optimism.
Keeping staff skills current
Training is important in just about every field, but more so in IT, where technology changes at a rapid pace. Cross-skilling of employees is essential to safeguard the organization’s competitive edge. Knowledge sharing could enable skill improvement at minimal cost to the organization.
The above steps can help in boosting motivation and retaining employees. This is important because the cost of acquiring people with the relevant skills could be very high. Besides the above, enterprises should work on process optimization/innovation and improving collaboration between teams.
The idea is to illustrate that all of Beer’s endeavors are precise instances of cybernetic ontology of unknowability and becoming: a perspective that acknowledges that the world around us continues to amaze us and that it cannot be controlled by knowledge. The essence of Beer’s efforts was thus to build systems that could adjust smoothly to ecosystems they could not completely control.
