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Facilitating Foresight: Where the foresight function is placed in organisations

 

pdf Facilitating Foresight: Where the foresight function is placed in organisations.pdf

 

Facilitating Foresight: Where the foresight function is placed in organisations

 

Dr Peter Hayward

 

Abstract

 

This paper will introduce the Viable Systems Model and in particular the Meta System component of that model, as a framework within which to consider how foresight can be facilitated in organisations. It will show how the System 4 function within the Meta-System is in a position to facilitate processes that will produce effectiveness and the development of overall system identity. It will also show how adopting another framework for understanding the paradigms or worldviews that operate in organisations can enhance the likelihood that these processes will be successful.

 

1. Introduction

 

The difficulty faced by all organisations today is how to stay up to date with what is happening in their environment. The velocity of change that organisations face is increasing. The opportunities and threats that arise are dynamic and complex. What is the capability that can assist organisations manage this situation? Richard Slaughter says that the missing capability is foresight. ‘Foresight is a deliberate process of expanding awareness and understanding through futures scanning and the clarification of emerging situations’. Where, then, is this foresight capability placed in an organisation and how is the process facilitated to achieve that outcome? It is the purpose of this paper to demonstrate to practitioners of foresight how environmental intelligence can be facilitated in an organisation to expand awareness and understanding. The principles behind this paper come from a theory of information management, which first came to prominence in the 1970s. Some of the language of that theory may seem difficult and dense to practitioners who encounter it for the first time. While the paper does try to reinterpret that theory to make it relevant to foresight practitioners today, it also wishes to maintain the rigour of the original theory. The benefit to the practitioner who makes the effort to understand the language used will be the acquisition of an expanded vocabulary of rich terminology which can be readily employed in many organisational interventions.

 

2. Stafford Beer and cybernetics

 

Stafford Beer sought a theory to understand how the overwhelming complexity in an environment could be managed. ‘How are systems capable of independent existence or how are they viable in complex environments’? In his book Brain of the Firm, first published in 1972, Beer promoted his theory of ‘the Managerial Cybernetics of Organisations’. That theory proposed a neurocybernetic model of an organisation conceived as a viable system. Cybernetics, the science of control, had been theorised by a number of earlier researchers, but Beer was the one who first proposed it as the underlying basis for a theory of organisational design. Most famously the Chilean government under President Salvadore Allende from 1971-1973 adopted Beer’s approach. What was attempted there was the reconception of the entire Chilean economy as a viable system. The project was never completed. It was terminated when President Allende was assassinated in the military coup, which overthrew his government, however, the results the project was achieving before the coup did validate the theory.

 

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futurist consultants

 

Figure 1: The simplified law of requisite variety. Adapted from Beer (1985)

 

The law that describes how complexity could operate to overwhelm a system of management is called the Law of Requisite Variety. Figure 1 is a simple representation of the Law of Requisite Variety. Variety is the term used in cybernetics to describe complexity. The figure demonstrates that there is infinite complexity in any environment which management wishes to do business with. If management, by itself, tried to deal with all the complexity in that environment then it would be overwhelmed. Instead an operational process is designed to interact with the environment, and management interacts with this operational process rather than with the environment itself. The operational process engineers the complexity it faces in the environment by reducing what is receives (attenuating complexity away) and by increasing the scope of its own interactions with it (amplifying the effect of what it does). The same process is repeated for the interactions between management and the operational process. The Law of Requisite Variety states that to control a complex system, the managing system must generate at least as much complexity as the system that it is trying to control. If either the managing system or the operational process lacks sufficient complexity then the complexity missed could cause the overall system to fail. In nature this could mean the death of the organism, in business it could mean the death of the organisation.

 

Operations, by necessity, will reduce complexity coming into the system through its interactions, and that complexity will be further reduced by the interactions with management. Reduction of complexity will occur, whether it is designed or not. “Ignorance” is a complexity reduction mechanism that does not take much effort to introduce into a system; however, it is usually not a wise choice in the long run! Increasing complexity (amplification) will not occur naturally but needs to be designed. The amplification processes shown in Figure 1 are trying to add complexity back to the outputs of first, management and then, operations. Complexity adds to the richness of the information and thus increases the value of the information. Clearly a low complexity piece of information going into a high complexity environment has a minimal chance of changing anything in that environment.

 

From his study of organic systems Beer found systems that were able to maintain independent existence despite the operations of the Law of Requisite Variety. He found that those systems exhibited the following properties:

 

• maintenance of identity (they had a purpose and organised the means to achieve it);
• able to self repair (they could repair themselves to continue existence);
• self awareness (they had awareness of themselves and what they comprised);
• were self organising (their organisational structure was environment and context specific);
• were self balancing (homeostasis applies);
• were open systems (they took adaptive information from their environment); and
• embodied recursivity (they existed within other viable systems).

 

An effectively facilitated foresight process in an organisation would be fundamental to the establishment of many of those properties, especially identity, self-awareness and openness. The task of Foresight is to enable entities to take purposeful action in regard to the future and, as such, it operates to manage the complexity inherent in any consideration of the future. Purposeful action is necessary if any system is to remain viable in a complex environment. Beer had discovered the properties that produced viability. What he then proceeded to do was develop how those properties could be designed into a system.

 

3. The Viable Systems Model

 

Beer’s Viable System Model (VSM) is the organisational framework that creates the conditions from which the properties of a viable system will arise. The model outlines a number of management functions and specific interrelationships between those functions. What should be understood is that this model is an abstract concept. If actual systems in the world, were they individuals, teams, organisations or nations, are observed then these functions and relationships will not be noted. Instead it is the totality of these functions and relationships, when operating effectively, that produce the properties of a viable system. What this model gives to the practitioner is an orientating diagnostic framework with which to interrogate an organisation. Armed with the VSM as a diagnostic the practitioner will note a wide range of organisational dysfunctions and discover their correlate in ineffective or non-existent functions and relationships. From this diagnosis the practitioner can craft the necessary intervention. Some of these interventions would be the facilitation of a foresight process.

 

This paper will examine those VSM functions and interrelationships that are necessary for the facilitation of foresight processes in an organisation in significant detail. In the service of brevity, however, this paper will not cover the totality of the model to that same depth. Nevertheless to ensure that a practitioner has a working knowledge of the entire VSM what follows is a brief overview of the complete model. Figure 2 is an example of the VSM. This example comprises two operating systems, which primarily interact with the external environment and the five attendant systems, which together with the specific interrelationships, produce the properties of viability.

 

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foresight consultancy Australia

 

Figure 2: The Viable System

 

System 5 represents the identity of the system. From this identity comes the total system purpose and the measures of its success. System 5 passes down to System 3 the policies and authority necessary to govern the overall system outcomes. System 5 balances present and future as well as external and internal perspectives. It also moderates the relationship between System 3 and System 4.
System 3, charged with the necessary authority and policies, ‘bargains’ with each of the operational systems (System 1 Operations and each System 1 Management function). In this example we will call them ‘A’ and ‘B’. This bargaining process establishes the agreed environmental territory of each operational system as well as the outcomes and performance standards expected from each. System 3 and each System 1 also agree to a monitoring process (System 3*) which will sample a number of the interactions between each operational system and the external environment. This audit process gives System 3 sufficient confidence that the ‘bargain’ is being met. This takes complexity away from the 1-3 communication channel that gives it the capacity to handle more complexity. The System 1’s also agree, between themselves, how they will coordinate their actions both inside the system (eg. resource sharing) and outside the system (eg. shared client management) and these agreements are managed by System 2. This system also removes complexity from System 3 that also frees up additional complexity capacity in System 3.

 

Finally System 4 examines the external environment to gain intelligence about both its totality and its future. Environmental intelligence that can be managed within existing policies is passed directly to System 3. Environmental intelligence, which requires a re-examination of the entire system’s identity, is passed to System 5. If the total system identity has to be adapted then new policies by System 5 and are then passed to System 3 and the process is repeated.

 

What has just described may make the operation of a viable system sound much like a traditional organisational planning process, from the top to the bottom. This is not the case at all but was merely done to give a quick overview of the method. In reality any of the six systems operate with authority to commence a cybernetic intervention at any point in time. In this way it is a self-controlling system.

 

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pdf Facilitating Foresight: Where the foresight function is placed in organisations.pdf