Purpose of a System in Light of VSM:

Varieties 2

In today’s post, I am looking at the concept of POSIWID (“Purpose Of a System Is What It Does”) Please note that VSM stands for “Viable System Model” and not “Value Stream Mapping”.

The idea of POSIWID was put forth by the father of Management Cybernetics, Stafford Beer. As Beer puts it: [1]

A good observer will impute the purpose of a system from its actions… There is, after all, no point in claiming that the purpose of a system is to do what it consistently fails to do.

An organization is a sociotechnical and complex system. This means that it cannot be controlled by simple edicts that are put top down from the management. We should not go by what the “designer” of the system says it does, we should impute the purpose from what the system actually does.

A good explanation comes from Dan Lockton: [2]

The implication of a posiwid approach is that it doesn’t matter why a system was designed, or whether the intention was to influence behavior or not. All that matters are the effects: if a design leads to people behaving in a different way, then that is the ‘purpose’ of the design. Intentionality is irrelevant: to understand the behavior of systems, we need to look at their effects… Essentially, a posiwid approach means that both `positive’ and `negative’ effects of a system must be dealt with. We might try to dismiss unintended effects, but they are still effects, and we need to recognize them, and deal with them. Undesirable phenomena are not simply blemishes they are [the system’s] outputs (Beer, 1974, p.7).

A general interpretation of an organization’s purpose is – to make money. This is the idea proposed by Eliyahu Goldratt in his famous book – The Goal. However, Beer’s view of the goal of an organization is to stay viable. Beer defines “viable” as “able to maintain a separate existence”. He identifies all organizations as viable systems. He was inspired by the human anatomy. He realized that the viable systems are recursive. In other words, Every viable system contains viable systems and is contained in a viable system. For example, a human being is a viable system, who is part of an assembly line which is also a viable system. This assembly line in turn is a part of a Value stream, which is again a viable system. This goes on and on. Beer developed Viable System Model (VSM) by exploring the necessary and sufficient conditions for viability in any complex system whether an organism, an organization or a country. 

There are three elements to a viable system:

  • The Operation – This is similar to the muscles and organs. This is what does the actual value adding functions. There can be several operation units in the system in focus.
  • The Meta system (Management) – This is similar to the brain and the nervous system. This is the glue that holds all the operational units and provides coherence to the structure.
  • The Environment – This is the relevant part of the external environment in which the system is in.

In an overall sense, management’s function is to manage complexity. Beer uses variety as a measure of complexity. Variety is the number of possible states of a system. The environment obviously has the maximum variety of the three elements. The operation has more variety than the management. Thus, we can denote this as. [3]


Here the amoeba shape represents the environment, the circle represents the operational unit and the square represents the management. “V” represents the variety possessed by each element. Management has to attenuate or filter out the extra variety while amplifying its variety in order to accommodate the variety that surrounds it. The same goes for the operational unit. Please note that we are dealing with continuous loops rather than simple connectivities. Beer postulates his Law of Inter-Recursive Cohesion based on this: Managerial, Operational and Environmental varieties, diffusing through an institutional system, TEND TO EQUATE; they should be designed to do so with minimum damage to people and to cost.

This idea is based on Ross Ashby’s Law of Requisite Variety – Only variety can absorb variety. In order to maintain viability, attenuators and amplifiers must be in place so that the three varieties are equivalent. There are homeostatic loops in place that amplify the lower varieties to absorb the higher varieties, and attenuate the higher varieties towards the lower varieties. This is depicted in the schematic below. Please note the adjustment to the scale of “V” to denote equivalence of variety achieved through attenuation and amplification.

Varieties 2

For a simple example, let’s look at a football game. There are 11 players for each team. There is one-to-one compensation of variety possible between the two teams playing. The officials, “managing” the game are able to match the variety from the players with the use of attenuators (rules, policies etc. of the game) and amplifiers (whistles, flags etc.).

Every viable system has five sub-systems, identified as Systems 1 through 5:

System 1 – Interacting operational units.

System 2 – Responsible for coordination between the interacting operational units, and provides stability via anti-oscillatory and conflict resolution strategies. An example is production control in a manufacturing plant.

System 3 – Responsible for control and optimization, and synergy between the organizational units. Often referred to as an “internal eye” focusing on “here and now”, internal and immediate functions. There is also a “Three*” subsystem that is responsible for monitoring/audit.

System 4 – Responsible for Planning and “Intelligence”. Often referred to as “external eye” focusing on “there and then”. System Four’s role is to observe the anticipated future environment and its own states of adaptiveness and act to bring them into harmony. [4]

System 5 – Responsible for developing “identity” and policy. Maintaining a good balance between System Three’s concern with the day to day running of affairs and System Four’s concentration on the anticipated future is a challenge for every organization. [4] System five is responsible for monitoring the balance between System three and System four.

As noted earlier, the strength of the VSM is in recursion. Every viable system at every recursion level must have the five subsystems working coherently in order to be viable.

Taken it all together, the Viable System Model looks like: [5]


The diagram can appear confusing due to the recursive nature of the viable systems within the viable system. There is lot more to the VSM than discussed here.


Due to the presence of viable systems within a viable system, the policies set by each System five may not be in alignment with the policy set by the System five in the larger viable system. Beer postulates that the observed and imputed “purpose” of the system and the “designed” purpose of the system are not in agreement. Beer states that the purpose is generally formulated within a higher recursion, thus, it is imperative that the purpose is restated at each low recursion in a language that the system understands. Based on this purpose, the system in focus will act by its proper inputs and reacts to its environment resulting in a new state of the system. The system should have a “comparator” that continuously compares the declared purpose and the purpose imputed from the results that the system delivers. This results in a feedback that leads to a modification of the original purpose. Beer states that:

This system will converge on a compromise purpose – it is neither what the higher recursion would like to see done, nor what the viable system itself would most like to see done, nor what the viable system itself would like to indulge in doing.

The purposes of the corporate system and those of System One are different, because System One consists of viable systems whose conditions of survival are formulated at a different level of recursion. The compromise convergence must continually act and this generally leads to lowest variety compromise possible. Please note that “what the system does” is done by System One. Beer postulated that autonomy is a computable function of the purpose of a viable system based on this. Autonomy is the maximum discretionary action available for the subsystem, short of threatening the integrity of the system as a whole.

Final Words:

Stafford Beer was man beyond his times for sure. I strongly encourage the readers to read as much of his works as you can. The VSM allows us to diagnose or even design an organization by making sure that the required homeostats, subsystems and channels are present to ensure viability. For those who wish to implement Lean or Six Sigma or Agile or any of other paradigms out there, I will finish with words of wisdom from Beer:

We manage through a model that we hold in our heads about how things work ‘out there’. If our model does not have Requisite Variety, then we ought to incorporate learning circuits that will enrich it. But if we are ideologically attached to our model, so that it is not negotiable, then it becomes a dysfunctional paradigm.

Always keep on learning…

In case you missed it, my last post was Cultural Transmission at Toyota:

[1] Diagnosing the System, Stafford Beer

[2] POSIWID and determinism in design for behaviour change, Dan Lockton

[3] World in Torment, Stafford Beer

[4] The Viable System Model and its Application to Complex Organizations, Allenna Leonard, Ph.D.

[5] VSM By Mark Lambertz – Own work, CC BY-SA 4.0,



Calculating Lead Times in a Value Stream Map

I was asked a question recently about the lead time calculations in a Value Stream Map. The question was specifically how the lead time is calculated.

There are two ways, that I have seen, of calculating lead times for value stream mapping. They both produce different results.

1) The first one is the one in “Learning to See”. Here the lead time is calculated as follows. Lead Time = Inventory/Daily Demand. There is no relationship with the consumption rate at the subsequent station. If the WIP is 1000 and the daily demand is 100, the lead time is 10 days. The assumption is that the inventory will be used up in only 10 days. This produces an inflated value for lead time and is not the true current state.

2) Calculation of Lead Time based on Little’s Law. To me, this is more realistic. Here the lead time is calculated as follows. Lead Time = WIP * Cycle Time of subsequent station. I know there is a lot of confusion regarding this.  Think of lead time calculation as the future tense. With the same example above, if the WIP is 1000 and cycle time at the station is 60 seconds, the lead time is 60000 seconds or 1000 minutes. Assuming 460 minutes in a day, this equates to 2.17 days (1000/460). In other words, lead time calculation is based on consumption rate.

The only thing to keep in mind with the second calculation is with the inventory we have at the last stage (Finished Goods). The lead time for this will be calculated as Inventory/Daily Requirement. This is because the customer is going to consume this at the rate of daily requirement.

In the end, please note that, “By overanalyzing the tool, don’t overlook the purpose of the tool.”

Keep on learning…