Applying VSM
In applying the VSM variety measures are used to match people, machines and money to jobs that produce products or services. In a set of processes some jobs are done by one person. Some are done by many and often many processes are done by the same person. Throughout the working day a participant, in completing a task, may find the focus shifts between internal and external Systems 1, 2, 3, 4 and 5 from moment to moment.
The choices, or decisions discriminated, and their cost (or effort) defines the variety and hence resources needed for the job. The processes (Systems 1) are operationally managed by System 3 by monitoring performance and assuring (System 2) the flow of product between System 1s and out to users.
System 3 is able to audit (via 3*) past performance so "bad times" for production can be compared to "good times". If things go wrong and levels of risk increase the System 3 asks for help or puts it to colleagues for a remedy. This is the pain of an algedonic alert, which can be automatic when performance fails to achieve capability targets. The autonomic 3-2-1 homeostatic loop's problem is absorbed for solution within the autonomy of its metasystem. Development (the System 4 role of research and marketing) is asked for recommendations.
If more resources are required System 5 has to make the decision on which is the best option from System 4. Escalation to higher management (up the metalinguistic levels of recursion) will be needed if the remedy requires more resources than the current level of capability or variety can sustain. The pleasure of an algedonic alert which are performance improving innovations can also be handled in this way.
In a small business all these functions might be done by one person or shared between the participants. In larger enterprises roles can differentiate and become more specialized emphasizing one or more aspects of the VSM. Local conditions, the environment and nature of the service or product, determines where warehousing, sales, advertising, promotion, dispatch, taxation, finance, salaries etc., fit into this picture. Not all enterprises charge for their transactions (e.g. some schools and medical services, policing) and voluntary staff may not be paid. Advertising or shipping might not be part of the business or they might be the principal activity. Whatever the circumstances, all enterprises are required to be useful to their users if they are to remain viable. For all participants the central question remains: "Do I do what I always do for this transaction or do I innovate?" It is embodied in the calls on System 4. The VSM describes the constraints: a knowledge of past performance and how it may be improved.
Beer dedicated "Brain of the Firm" to his colleagues past and present with the words "Absolutum Obsoletum" which he translated "If it works it’s out of date".
Read more about this topic: Viable System Model
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