Aplicacion de SV

Syst Pract Action Res (2011) 24:429–452
DOI 10.1007/s11213-011-9194-8
ORIGINAL PAPER
A Set of Conventions, a Model: An Application

of Stafford Beer’s Viable Systems Model
to the Strategic Planning Process
John Stephens • Tim Haslett
Published online: 12 March 2011

Ó Springer Science+Business Media, LLC 2011
Abstract In contemplating better ways to manage, Stafford Beer says the big problem is
that you are not determining absolute facts: you are establishing a set of conventions.
Hence his view, that a model is neither true nor false: it is more or less useful. And while
this paper suggests Beer’s Viable Systems Model (VSM) is overwhelmingly more, rather
than less useful, that the VSM and its founding theories are virtually unknown at the level
of everyday management begs the question, why? Over time we have learned about the
usefulness of the VSM compared to other management theories, when used in the contest
of the organisational strategic planning process. Thus through a sequence of diagrams
based on Beer’s original drawings, we show how the VSM came to underpin a process for
strategic planning in one organisation. The paper has three aims; to attach an everyday
‘common speak’ understanding to some of Beer’s work, to demonstrate how we have
learned to appreciate the usefulness of the VSM and its associated diagrams and con-
ventions and to suggest a link between the Action Research change methodology and
Beer’s work.
Keywords Management Action research Stafford beer—viable systems model

Ross Ashby—law of requisite variety
Introduction
In investigating better ways to manage Stafford Beer (1985, p. 2) says the big problem is
that ‘you are not determining absolute facts: you are establishing a set of conventions’. ‘So
This paper was the foundation of a presentation made at the 53rd Meeting of the International Society for the
Systems Sciences (ISSS)—Making Liveable, Sustainable Systems Unremarkable. University of Queensland,
Brisbane, Australia: July 12–17, 2009.
J. Stephens (&) T. Haslett

Greyhound Racing Victoria, Melbourne, VIC, Australia
e-mail: jstephens@grv.org.au
T. Haslett
e-mail: thaslett@bigpond.net.au
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430 Syst Pract Action Res (2011) 24:429–452
remember: a model is neither true nor false: it is more or less useful’. In this light, we
believe Beer’s Viable Systems Model (VSM) presents a set of conventions that are
overwhelmingly more, rather than less useful. But if this is so, why are the VSM and its
founding theories and conventions virtually unknown of and/or unused at the level of
everyday management?
We think the (hefty for most) task of grasping even a rudimentary understanding of
Beer’s intricate, idiosyncratic lexis, used predominantly in the first two of his better known
headline trilogy1 is a reasonable place to start. For here on one hand, grasping an insight of
both the words and interdisciplinary theory that underpins Beer’s ‘useful model’ is not
easy. However on the other hand, amid the Beer lexis, lie some relatively easy to make
sense of diagrams. The diagrams have pivotal conventions which we think, usefully pro-
vide for better approaches to everyday management. Thus, to spur rather than shun any
detailed exploration of the Beer genius, we present a sequence of sixteen management
diagrams which have evolved for us during a long term Action Research project.
This paper has three aims. The first is to attach an everyday ‘common speak’ under-
standing to some of Beer’s work. The second is to demonstrate how we have learned to
appreciate the usefulness of the VSM and its associated diagrams and conventions. Finally,
we suggest a link between the Action Research change methodology2 and Beer’s work.
In this light, those perturbed by the Beer lexis may draw breath knowing that while our
diagrams are inspired by Beers original drawings, clearly, the masters’ hand is matchless.
Thus our approach does not demand an intricate understanding of Beer’s lexis but rather,
illustrates the practical use and/or adaptation of such diagrams.
By way of background the particular organisation in focus, Greyhound Racing Victoria
(GRV) is clearly a viable system.3 It has thirteen greyhound clubs as operational com-
ponents. GRV and its clubs are therefore analogous to other viable systems; parent bodies
with operating franchises, education systems with schools, petrol companies with service
stations outlets. At GRV various management sub-systems correlate with functionalities
of; the Board, the CEO and Senior Managers, Senior Management departments (finance,
marketing, technology and human resources etc.), the registration and naming of grey-
hounds, race programming and integrity services and so on. Individual clubs have com-
parable structures to GRV, consisting of various sub-systems operating within their own
viable systems. Thus the clubs manage their racing and training operations within niche
communities of localised breeders, trainers and owners, suppliers and workers.
Our work targets upper levels of everyday management however, pursuant to its
founding theory; the fundamental conventions of VSM should apply at differing hierar-
chical levels, in all organisations. For this reason, our diagrams begin at an elementary
standard and aggregate for use at higher levels of organisational complexity.
The first eight diagrams are simple. Via PICCO4 they engender a primal understanding
of Viable Systems Diagnosis (VSD) and the Viable Systems Model (VSM)5 and some of
1
Brain of the Firm (1972), The Heart of the Enterprise (1979), Diagnosing the System for Organizations
(1985).
2
We take Checkland’s (2000, p. 36) a succinct account of method and methodology. A methodology is at a
meta-level with respect to a method. Methodology is a body of methods used in a particular activity.
3
Organisational viability (Beer 1985, p. 17) is the ability to ‘maintain a separate existence’, albeit within a
dynamic environment.
4
PICCO, an acronym for Policy, Intelligence, Control, Coordination and Operation (Stephens and Haslett
2002a, b; 2005a, b; Stephens 2007) is a hybrid template derived from the VSM.
5
The VSM is a model whereas VSD is a process.
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Syst Pract Action Res (2011) 24:429–452 431
Table 1 GRV KPI’s versus VRI for reporting period (Source—GRV annual reports 2001–2005)
Key statistics for financial years (FY) 00/01 01/02 02/03 03/04 04/05
GRV off course turnover ($m) 372.6 400.4 429.9 466.1 509.4
GRV % increase in off course turnover 8.4 7.7 7.4 8.4 9.3
RVL % increase in off course turnover 4.0 4.7 3.5 3.1 4.4
HRV % increase in off course turnover 2.4 3.4 5.4 7.0 6.1
GRV % market share 13.9 14.2 14.6 15.2 15.7
RVL % market share 71.1 70.9 70.4 69.5 68.8
HRV % market share 15.1 14.9 15.0 15.4 15.5
GRV total income ($m) 27.6 30.5 30.4 32.5 35.2
Prize money to participants ($m) 14.8 15.9 16.7 16.7 18.5
their important conventions. With absolute respect to Beer, we think the simplicity of
PICCO is required for three, albeit significant reasons. The first is that the fundamental
conventions associated with these diagrams need to be comprehensible for a broad range of
employee competency levels. The second is that particularly in regards elementary
employees, diagrams need to be useful rather than absolutely truthful. The third, in keeping
with the first two reasons, is that our employees seem to relate better to one sequence of
diagrams. Thus, in accord with Argyris and Schon (1974) our employees consciously6 use
the diagrams and PICCO to learn and manage their responses to contextual organisational
issues.
The next six diagrams are specific to our strategic planning processes. They are
applicable for higher levels of management. Nonetheless, their thinking recursivity7 might
be applied at all levels, in any organisation.
The final two diagrams are really for Action Researchers. They aggregate all of the
conventions, approaches and theory-bases that have contributed to the preceding diagrams,
and associate the theory based method PICCO at many levels of recursion, within emergent
action learning frameworks.
Finally, perhaps demonstrating the value and usefulness of our work we provide
information about GRV performance over time (see above). Thus, while we do not suggest
any direct causation here, in seeking some form of quantification of organisational pro-
gression, the GRV Board had resolved that our overall AR [conducted between FY
2001–2005] should be tangibly reviewed in conjunction with shifts in Key Performance
Indicators (KPI) over time. The most significant KPI’s for GRV are first, market share8
(betting turnover as compared to the other codes) and second, annual growth. Other
important KPI’s include; financial contributions to clubs which provides for their opera-
tions and stake money and, overall industry liquidity which provides for short term
maintenance and longer term infrastructure developments. All of these KPI’s have
6
Argyris and Schon (1974) organisational learning is the logic that learning is a primary process affecting
the way in which successful organisations consciously learn and manage their responses more successfully
than those who do not.
7
In a recursive model a viable system always contains and is contained in another viable system. Here
‘recursivity’ is used in the sense that as a thinking process (rather than a viable system) PICCO always
contains and is contained within another thinking process.
8
The overall Victorian Racing Industry (VRI) comprises Thoroughbred (RVL), Greyhound (GRV) and
Harness (HRV) jurisdictions.
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meaning because they relate to key elements of the GRV mission statement. Their col-
lective determination hence may signify ‘some’ accountability of overall performance.
Importantly the cited trends of the reporting period have continued to this day. However
clearly, rather than suggesting these figures may empirically demonstrate the usefulness of
our work, we prefer to think that our AR has not disadvantaged performance at GRV. In
other words, our diagrams are neither true nor false: they are more or less useful (Table 1).
A Sequence of Sixteen Management Diagrams
Management Diagram 1: Thinking About Management Principles
In keeping with Argyris and Schon conscious learning ‘nothing will come from
doing nothing’—with apologies to William Shakespeare (King Lear)
For employees being introduced to some basic principles of management (and perhaps
the strategic planning process for the first time) Diagram 1 is a useful template. This is
because employees need not know the theoretical underpinnings of the diagram, or why
certain management conventions apply at all hierarchical levels, in all organisations. But
they do need to think about how the diagram and its conventions relate to particular
operational systems. That is, via the diagram, individuals think about how they manage in
the workplace. In this context we find the Beer (1959, p. 39) term ‘purposive’9 resonates
well at various levels of employee competence. In a primal sense, Beer’s (1985, p. 20)
purposive operational systems are operations that ‘in total’ produce the system-in-focus—
whatever that might be. Hence, an advantage of starting with individual employees is that
the principle of hierarchical decision making; from individuals to sub-groups, from sub-
groups to Boards, from Boards to higher authorities (as likened to a favourite Beer10
metaphor—a set of Chinese boxes or Russian dolls wherein each is contained within the
next) quickly makes sense.
Diagram 1 Thinking about

• We aim to manage (M)
management principles
some ‘purposive’
operation - (O) M
• It is not uncommon for
managers to think that
they can manage their
operations – in a
somewhat ‘closed’
existence
• Managers need to think

about how open or
closed their operational O
systems might be
9
A purposive system is one organized to achieve some end, its aim is to do what it does.
10
Beer (1979, p. 118).
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Table 2 Thinking about management principles

Issues that may surface with everyday employees Commonsense thinking for Indicative theory base
everyday employees (if deemed necessary)
Thinking about management may not be common in Understand that problems Cognition
the everyday workforce occur as part of everyday Socio-technical
work life
Organizing more effectively must be a better way to A new, better tactic may assist Cybernetics
go
Those with management training may experience a There has to be a better way Open and closed
gap between what the textbooks say and what than juggling how best you systems
actually occurs in practice can Systems thinking
To manage better you need to start with somewhere Doing something is better Organisational
than doing nothing knowledge creation
A template which links theory to practice is handy A template may provide for System dynamics
consensus of understanding Soft systems
methodology
Table 2 is not rigorous. From an introductory perspective, its simple aim is to surface
some useful words and phrases about everyday management. The ‘theory base’ column is
indicative only.
Management Diagram 2: Management of Operations Involves Recognition

that the Controller is Part of the System that is Under Control
A model is neither true nor false: it is more or less useful—Beer (1985, p. 2)

Everyday employees may first view their locus of operational control from a somewhat
cocooned or closed system perspective—‘I work in this section, of this place, and nothing
else matters’. Hence conventions such as (a) Beer’s (1972, p. 25) axiom ‘the first principle
of control is that the controller is part of the system under control’ and (b) the thought of
control emanating as operational feedback, are not likely to be (initially) well understood.
Diagram 2 illustrates an essential convention—the feedback loop.
• Managers control some

aspects of their purposive M
operations.
• These operations provide

feedback - managers
need to learn from their
operations
• Think about the

feedback that you get
from your operations O
Diagram 2 Management of operations
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Table 3 Management of operations

Issues that may surface with Commonsense thinking for everyday employees Indicative theory base (if
everyday employees deemed necessary)
What is a closed (as Can your operational system be a separate Operational systems
opposed to open) system identity, independent of other existences? Cognition
Organisational behaviour
What is operational Actions, reactions, learning from outcomes Operational research
feedback Organisational behaviour
How might I control my You have influence on the operation, as well there Organisational structure
operation better? are as responses from the operation Cybernetics
You as controller are part of the system under VSD (Beer 1985)
control
Table 3 is also not rigorous. Its aim is to surface some further words and phrases which
may come to assist in employee thinking at differing hierarchical levels. The ‘theory base’
column is again indicative only.
Management Diagram 3: The Interaction of Management, Operations

and the Environment (E)
Homeostasis, the stability of a system’s internal environment despite the system’s

having to cope with an unpredictable external environment—Beer (1985, p. 17)
We find that when employees grasp the concept of operational feedback, their con-
sciousness of interactions with a wider environment become more apparent, or in the least,
it is more readily acceptable. However, clearly this proposition may require further
investigation.
With the ‘inclusion’ of the environment (as in Diagram 3) employee thinking becomes
less ‘closed’ and less focussed on ‘internal’ environments—an acceptance of (a) a number
Think about how a manager might We often think that we can manage at the RHS of
become smart enough to ‘turn up’ or an imaginary line. We close ourselves off from E.
‘turn down’ operational variety We think that we can absolutely control our
operations – and we may become agitated if our
operations go ‘out of control’.
Diagram 3 The environment, management and operations
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Table 4 The environment, management and operations

Issues that need to be Commonsense thinking for everyday Theory base (if deemed
surfaced with everyday employees necessary)
employees
Environment An ‘internal’ environment having to cope with Ashby’s (1956)—law of

an unpredictable ‘external’ environment requisite variety
Conant and Ashby (1970)—
law of residual variety
Homeostasis Keeping your operation under control through General systems
self regulation
Open system Operational systems cannot survive in a Open systems
vacuum
Recursion Stacks of viable systems that always contain Set theory
and are contained in another viable system
Variety Complexity in the number of states which Cybernetic approaches—
might apply to your operation VSD (Beer 1972, 1979,
1985)
Management science—Beer
(1967)
Variety ‘dial’ How a manager might become smart enough to Ashby’s (1956)—requisite
‘turn up’ or ‘turn down’ operational variety variety
and (b) a variety of management systems emerges. The concept of operational systems
being stacked or embedded within each other (the recursive dimension as previously
described) also becomes clearer. Thus a new mindset encompassing M, O and E as
involving unpredictable, tripartite interactions may become part of everyday organisational
thinking. Here variety11 might initially be interpreted by employees as a nuisance factor
that raises its head only when their operations tend to go out of control. Table 4 thus
follows our non-rigorous approach to some further words and phrases which may also soon
become common to employees. While the ‘theory base’ column is again indicative only,
here it is specific to the Laws of Requisite and Residual variety.
Management Diagram 4: All Levels of ‘M’ Exhibit Control
The big problem is this: you are not determining absolute facts: you are establishing
a set of conventions—Beer (1985, p. 2)
Diagram 4 presents an important amalgam of the management conventions introduced
so far, and some rudimentary relationships common within strategic planning processes. At
this stage, employees first grasp the concept of system variety (perhaps through experi-
encing operational tension or confusion) as a measure of complexity, or the number of
possible states that their organisational system might have and how ‘filters’ such as leg-
islation and strategy may affect that complexity.
Table 5 follows our non-rigorous approach to some emergent words and phrases.
Beer’s (1985, p. 45) second Principle of organisation involves a time base. It says that
the four directional channels12 which carry information between M/O and E/O—must each
11
Beer (1985, p. 35). Variety is a measure of complexity: the number of possible states of a system.
12
For clarity, this means attenuation and amelioration between E and O and also between O and M (via the
regulatory centre).
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Diagram 4 Major and minor Tension - Confusion

control
Tension -
Confusion
Tension - Confusion
Legislation Strategy
Society values Budget
Value systems Policies
Suppliers Rules
Unknowns Regulations
Think about how we like to be in control of our operations. We begin to
understand that we impose conditions such as legislation, value systems,
strategies and budgets to take unwanted variety out of our operations. The
environment provides us with ‘external’ intelligence that influences our
behaviours
Table 5 Control
Issues that need to be surfaced with Commonsense thinking for Theory base (if deemed
everyday employees everyday employees necessary)
Varity—may be practically Managing complexity VSD, attenuation, amelioration

experienced as tension and confusion Directional channels (Beer 1972, 1979, 1985)
Handling high variety
Enhancing low variety
Planning templates to lessen or Budget, strategic planning, laws, Organisational theory
increase required complexity conventions, value systems Operational research
(variety) Cybernetics
Controlling variety to maintain Only variety can absorb variety Requisite variety (Ashby 1956)
viability Homeostasis Residual variety (Conant and
Becoming smarter than the Ashby 1970)
situation we are managing General systems (Homeostasis)
A variety diala—being able to
turn up, or turn down variety
a
This new view of Beer’s work emerged from our assessment of Diagnosing the System (1985)
have a greater capacity to transmit a given amount of information, relevant to variety

selection in a given time, than the originating subsystem has to generate it in that time.
Beer’s second Principle can be simplified into at least two different and useful perspec-
tives. One is that managers need to organise themselves so that they have sufficient time to
consider all information, before committing it to a strategic direction. The second is that
they need to have competencies that enable them to make sensible decisions about that
123
information. That is in everyday workplace terminology, they need to be smarter than the
situation they are managing.13
Management Diagram 5: Thinking About Thinking is Difficult
A man’s mind stretched by a new idea will never return to its original state—Oliver
W Holmes
Here we divert from the Beer based diagrams (Diagram 5) and consider the Four Stages
of Competency model which we attribute to Gregory Bateson (1973). This is because we
are now getting away from the domain of ‘everyday’ employees and entering the hierarchy
of more senior management. Hereour experience suggests that managers are (increasingly)
likely to have a tertiary qualification, but not necessarily in the disciple of management.
The reasons for introducing this diagram at this stage are three fold. One is to assist this
type of employee in thinking about their specific thinking processes and cognition in
general. The second is to enable such employees to gain a better understanding of how the
overall strategic planning process may be seen to evolve. The third is that we find Bate-
son’s model assists such employees in the linkage of the everyday issues and approaches
that have been employed so far, to the referenced theory-bases.
Management Diagram 6: PICCO
A tentative road map, still indistinct and abstract, a target to which the organisation might
aim to become generative. It is not a destination, but a never-ending journey. It is part
fantasy, part psychology, and part struggle’—Watkins and Golembiewski (1995, p. 99)
In returning to Beer, the aim of the sixth management diagram (Diagram 6) is to
introduce this higher level of management [say a group of operational managers or an
Stage One – Unconscious Incompetence (UI)

You are unaware that you have incompetence
in a chosen area CI CC
Stage Two – Conscious Incompetence (CI) C Consciously Consciously
You learn and become aware of your O Incompetent Competent
incompetence in a chosen area N
S
Stage Three – Conscious Competence (CC)
C
You become aware of your competence in UI UC
I
the area. You know what you are doing and
O Unconsciously Unconsciously
you realize what you have learned
U Incompetent Competent
Stage Four – Unconscious Competence (UC) S

You do things and achieve in the chosen area N
without thinking about it. The process of E
learning is/has become of second nature – S
natural to you S COMPETENCE
Diagram 5 Four stages of competency (attributed to Bateson 1973)
13
Dr. John Barton—informal discussion Monash University 2002.
123
• SYSTEM 5 [S5]: The part of the organisation which ultimately determines the
strategic Policies that GRV will follow
• SYSTEM 4 [S4]: The engine room of the Brain. The Intelligence, the gathering of
information through connection with the world ‘outside’ of greyhound racing.
Intelligence looks at providing information for planning, forecasting and predictive
strategy for GRV
• SYSTEM 3 [S3]: The floor or base of the organisational Brain. A system that
Controls the complexity of the organisational muscles and organs (the clubs) in
system one and maximizes the inner functionality of GRV. S3 is often ‘split’ to show
the S3* audit system as a functioning operational feedback loop
• SYSTEM 2 [S2]: A system that oversees and keeps an eye on the clubs, a system that
stabilizes their interaction. Identified by Beer as the sympathetic nervous system, it
Coordinates or calms down any fluctuation or inconsistency in the (club) operating
systems
• SYSTEM 1 [S1]: The GRV muscles and organs. The bits of GRV (clubs) that
actually do things – they run race meetings. They provide for the fundamental
activities of the system. They can be described as the Operations that make GRV tick
Diagram 6 The five systems that underpin PICCO
internal organisational Senior Management Team (SMT)14] to a quite distinctive template,

PICCO. Based on VSD, PICCO is a suggested ‘road map’ that may build on the sort of
thinking that underpins the first five diagrams. However, to facilitate where we go from
here, it is necessary to provide a briefing (follows) on the particular organisation in focus,
Greyhound Racing Victoria (GRV) where the operational components are thirteen grey-
hound clubs.
GRV and its clubs are similar to a company with franchise stores or an education system
with various schools etc. Here sub-systems [S5–S2] correspond to the management at GRV
headquarters. S5 is the GRV Board, S4 is the CEO and SMT, S3 is the various SMT
departments (finance, marketing, technology and human resources etc.) and S2 is the
registration and naming of greyhounds, race programming and integrity services and so on.
Each individual club has a comparable structure to GRV, consisting of the five essential
sub-systems within their whole viable system. The clubs manage their racing and training
operations within their own niche community of localised breeders, trainers and owners,
suppliers and workers. All clubs, as subsets of GRV could therefore develop individual
VSM’s with their own clubs as the particular system in focus.
The PICCO anagram was formulated independently, but coincidentally with the same
names, for the five systems as used by Espejo et al. (1996).15 Unfortunately, in the early
introduction of the PICCO template, we find that employees may take it to represent a
totally ordered and sequential process. That is, you start at S1 and progress sequentially
(maybe spending equal time) through each system as you progress to making S5 policy.
14
A SMT might comprises CEO, Finance, IT, Marketing and various other departmental managers.
15
Our reviewer says that Beer disagreed with Espejo’s (and hence our) interpretation and way of naming
the five systems.
123
While such a stance does not deliver devastating bad results per se, they eventually learn
this is notionally incorrect (for both PICCO and the VSM).
However, by introducing the simple concept of five interconnecting subsystems, Policy,
Intelligence, Control, Coordination and Operations as PICCO, we find that almost
immediately three things happen. One is that that higher levels of management (here the
Club managers, the SMT and/or a Board16) are able to focus on the template as one valid,
useful and straightforward approach to better management at GRV.17 The second is that
some ownership of the PICCO approach takes place. The third is that such higher levels of
management start to think more systemically about the interactions and iterations that
occur within the GRV operations. Of course this would normally occur using specific VSM
theory.
Management Diagram 7: PICCO and MODE at GRV
You don’t have to be a fantastic hero to do certain things to compete. You can be just
an ordinary person, sufficiently motivated to reach challenging goals—Sir Edmund
Hillary
The aggregation of the diagrams so far (albeit a simple reinterpretation of aspects of
VSM) provides GRV with an underlying philosophy on how to determine the strategies
that make System One (its clubs)—the purposive operation of the organisation—viable.
Thus a significant ‘management’ body, like the club managers or the SMT18 (as a path-
ological viable system) can visualise a snapshot of the organisational strategic planning
process MODE19 at any given point in time. Diagram 7 therefore considers how MODE
may be constructed to suit a holistic System One in focus, at one point in time. However,
the two-dimensional Diagram 7 has two parts.
For the first part, on the horizontal plane, the purple blob symbolises information that
comes to MODE in the form of intelligence from the ‘external’ environment. The green
circular disc symbolises the compilation of information that comes from all of the
‘internal’ subsidiary parts of the GRV purposive operation. On the vertical plane, the blue
square symbolises the organisational accountability for the content of MODE at a par-
ticular point in time. The ‘arrows’ above and below the blue square reveal that MODE
gathers strategically important information from, varied hierarchical levels, both within
and without the organisation.
A reason for the two dimensional depiction in the first part of Diagram 7 is to get the
Club managers (and the SMT and Board) to think imaginatively, but quite seriously about
the structure of decision making processes (at the varied levels) that provide information as
MODE strategies are progressed. When this ‘new’ thinking occurs, questions such as ‘How
does GRV arrive at decisions which may influence strategy?’ or ‘Who decides ultimate
policy?’ or ‘Can GRV decision making processes be improved?’ arise, and the need for a
second, decision-making process part of Diagram 7 surfaces.
16
For clarity, the club managers, the SMT and the Board are not viable systems.
17
Greyhound Racing Victoria (GRV) is the organization responsible for the overall control of greyhound
racing (at 13 clubs) in the State of Victoria, Australia.
18
Senior Management Team (SMT)—GRV headquarters comprises the CEO and Finance, IT, Marketing
and Racing departmental managers providing support activities for the organisation. For clarity, rather than
being viable systems, the SMT provide meta-systemic support to the clubs which provide the ‘product/
service’ of greyhound racing.
19
Here GRV organisational strategic planning is termed MODE (Managing Our Dynamic Environment).
123
(a)
GRV BOARD
ACCOUNTABILITY
O
OPERATION MODE
(b)
System 5 - Policy – Who or what will ultimately make

the operational decision?
System 4 - just who or what is to gather the required
Intelligence?
System 3 - Control – Who or what is to enable
operational self regulation?
System 2 - Co-ordination - Who or what is to
commence the organization of that operation?
System 1 - Operation – What does the operation
concern?
Non - ordered thinking

process is used by GRV
Board to determine their
S5 Policy for MODE in
consideration of higher
levels of recursion
GRV BOARD
ACCOUNTABILITY
O
OPERATION MODE
Non - ordered thinking

process by SMT is used
to propose their S5
Policy for MODE from
lower levels of recursion
(clubs)
Diagram 7 Integration of the two parts, MODE and PICCO at GRV. a Part 1 of MODE. b Part 2 of MODE
123
The second part of Diagram 7 is shown below as a nebulous version of Diagram 6. Here
PICCO symbolises a non-ordered thinking process that might apply for any club operation,
at any hierarchical level of decision-making. In the most straightforward of cases, PICCO
could be used to determine S5 Policy at lower levels of recursion on something like the
purchase of club stationary supplies, but this would not be a GRV organisational strategic
policy.
In relation to this lower club subsidiary level of recursion, the accountability of pro-
posed club S5 Policy is then able to be assessed at GRV Board level by considering
questions such as ‘Does this proposed club S5 Policy (received as GRV Board S4 Intel-
ligence) provide for appropriate operational requisite variety?’ or ‘Has the club been
smarter than the situation we are trying to managing?’ If the answer is in the affirmative,
then this S4 Intelligence is likely to become engrained into the GRV organisation, via the
Board, quite possibly as S5 Policy. If however the answer is in the negative, then the S4
intelligence is likely to be sent back for PICCO (re)consideration, so that (the lack of)
requisite variety might be ameliorated. In other words, the yellow ‘call out’ notations are
simply symbolic of PICCO non-ordered thinking processes occurring at various organi-
sational hierarchies. Some such processes may pull management thinking down to their
level. Others may impose from above. That is, the PICCO thinking processes occur at
various levels of recursion.
Management Diagram 8: PICCO at Differing Hierarchical Levels
Ecology is the branch of biology dealing with the relationships between organisms
and their surroundings, including other organisms—Concise Oxford Dictionary
Diagram 8 shows how information contributions to MODE can be interpreted to flow to
higher hierarchical levels (here the GRV Board), from lower hierarchical levels (the clubs).
Thus by employing PICCO as a non-ordered thinking process, employees gain a better
understanding of how their hierarchical roles unfold in the MODE strategic planning
process. Diagram 8 is thus designed to relate the use of PICCO for individuals, Clubs/the
SMT as collectives, and the GRV Board from differing hierarchical standpoints. The
process is ‘recursive’ in the sense that as a thinking process, PICCO always contains and is
contained in another thinking process.
Diagram 8 PICCO recursive Individuals in Clubs/SMT in The Board of GRV

thinking GRV using GRV using using
‘PICCO’ ‘PICCO’ PICCO’
SI
S1 S1 S2
S2 S2 S3
S3 S3 S4
S4 S4 S5
S5 S5
123
Table 6 Words and phrases that have evolved from Diagram 8

Issues that need to be surfaced with more senior Commonsense thinking Theory base (if deemed
managers for more senior managers necessary)
Non ordered thinking processes PICCO VSD—Beer (1972, 1979,

1985)
Cognition
Organisational behaviour
Stability of a system’s internal environment despite Homeostasis General systems theory—
the system’s having to cope with an unpredictable Self regulation von Bertalanffy (1968)
external environment
Language that you can make sense of Transduction Cognition
Encoding/decoding
Hierarchical stacking of systems Recursion Set theory
Coping with variety Being smarter than the VSD/cybernetics
situation being 1st, 2nd and 3rd
managed. Principles of
organisation
Ashby’s (1956)—law of
requisite variety
Conant and Ashby
(1970)—Law of
residual variety
The bottom loop is shown to illustrate the possibility of how highly specific information
might flow from perhaps an ‘individual’ inquiry or consultancy, directly to a Board, that is
independent of the SMT, but this would be rare. Table 6 follows our non-rigorous
approach to some further emergent words and phrases.
Management Diagram 9: PICCO, Subsidiary Viable Systems, Thinking Recursively
Different systems map onto the same model by sacrificing whatever variety is not
needed for the purpose at hand—Beer (1974, p. 49)
The next six diagrams, specific to the GRV strategic planning process, are applicable for
higher levels of management. An upper (blue20) and a lower (brown) level of recursion
have now been added to the first part of Diagram 7 shown earlier. The lower level of
recursion is the S1—GRV clubs. However, while not viable systems per se; the SMT and
Board are also important contributing factors as ‘pathological viable systems’ that provide
meta-systemic support to S1, when defining the GRV strategic planning processes
(Diagram 9).
Management Diagram 10: Reduplication of a Cybernetic System of Regulation
What we are doing is to reduplicate a cybernetic system of regulation recursively that

is over and over again, using the same components with appropriate variety
adjustments—Beer (1974, p. 42)
20
The actual colors are irrelevant. They simply distinguish between levels of recursion.
123
E M
O Government
policy, relevant
Acts etc
E
O
GRV MODE
All clubs responsible for

O primary activities as
subsidiary viable systems
Diagram 9 PICCO, subsidiary viable systems (clubs)
Diagram 10 shows the contributions to MODE specifically coming from the lower
recursive levels (Clubs). This also occurs at higher recursive levels (Government policy,
relevant Acts etc.) as shown in Diagram 9.
Management Diagram 11: An Ever-Spinning Wheel
Like a circle in a spiral, a wheel within a wheel, never-ending or beginning on an

ever spinning wheel—Bergman and Bergman
As outlined in Diagrams 9 and 10, the Clubs ‘truthfully’ act as subsidiary viable sys-
tems and the SMT act as pathological viable systems for GRV. ‘Usefully’ they are both just
part of the one viable system (GRV) which defines MODE (Diagram 11).
At a layer of recursion one level down from MODE, the Club and SMT departmental
operations sit side by side each other, with their ‘next layer down’ individual objectives
being regulated by the strategic requirements of MODE. If the holistic GRV organisational
strategy contained in MODE can then be envisaged as being contained in the green disc in
MODE layer one, that disc may ‘spin’ in either direction, and at varying speeds, depending
on the need to attenuate or ameliorate variety arising from the whole operation of the GRV
organisation.
It follows that when the green disc in MODE layer one spins, the recursive brown disc
in layer two (and the 13 club subsidiary viable systems) must also spin. Recursively, they
use the same components, with appropriate variety adjustments at MODE layer two, one
level of recursion down.
123
Operation MODE
Club A Club B
Club F
Club C
E
Club E Club D
Diagram 10 Reduplication of a cybernetic system of regulation
Information from MODE filters down and permeates each club and the SMT support
activities. PICCO formulated information from the clubs and the SMT support activities
also moves up to MODE layer one as proposed strategic policies, and down to lower
management levels as defined strategic policies. A ‘yo yo’ process is developed which
leads to better MODE policy decisions emerging from contributions from each of the
recursive layers.
Management Diagram 12: Strategic Balance
Control is simply the process by which a system realises its vision and goals, in
constant adaptation to the milieu into which it is embedded—Espejo (1996, p. 65)
The twelfth management diagram (Diagram 12) is a simple depiction of how GRV sets
out to control strategic balance in accordance with the cited Espejo, Schuhmann et al.
(1996) edict.
At GRV, the principle aim of MODE is to maintain a delicate balance between Eco-
nomic Rationalism and the Social Fabric as required by the industry.21 Integrity, appro-
priate communications and an organisational learning philosophy support that balance.
These virtues are encapsulated in the first layer of MODE (designated by a green fulcrum).
21
As a legislated ‘semi-government’ authority, GRV has responsibility in upholding both the social fabric
of the industry and accountability, in a fiscal sense.
123
• Economic rationalism
(Budget)
• Integrity GRV MODE
• Communications
• Learning (improvement)
• Social fabric
MODE LAYER ONE
Club and SMT objectives
Club A Club B
Club F
Club C
E
Club E Club D
MODE LAYER TWO
MODE LAYER THREE
Diagram 11 An ever-spinning wheel
Using the same cybernetic components with appropriate variety adjustments, information
then flows between the clubs and SMT support activities (brown support) at layer two and
MODE at layer one. Each Club and the SMT support activities then embed the MODE
virtues into a third support layer (Blue) as required. Finally, each club and the SMT support
activities instil managerial requirements into their specific departments via a fourth
(Maroon) support layer.
Management Diagram 13: GRV Hierarchy of Systems
The set of formal hierarchical roles in an organisation embodies a particular shared

belief (paradigm) on how the opposing forces of integration and division are best
arranged at a particular time—Ralph Stacey (1993, p. 378)
123
Diagram 12 Strategic balance
Diagram 13 Operational
recursive levels
Importantly, the various SMT operational activities within GRV are able to provide
vital information, as well as meta-systemic support to MODE. This occurs through SMT
department objectives, SMT departmental requirements and SMT managerial require-
ments. The SMT departments can thus be envisaged as an organisational hierarchy of
various ‘pathological viable systems’ rather than viable systems themselves (reiterating
‘truthfully’ as primary support systems they are part of the one viable system—the GRV
organisation) (Diagram 13).
In line with Stacey (1993) the compilation of strategies within each SMT department
then requires a formal documentation of processes with attention to appropriate support
system variety adjustments.
123
Management Diagram 14: PICCO a Theory-Based Emergent Learning Framework
A play should give you something to think about. When I see a play and understand
it the first time, then I know it can’t be much good—T.S.Eliot
System 5 - Policy – Who or what will ultimately make

the operational decision?
System 4 - just who or what is to gather the required
Intelligence?
System 3 - Control – Who or what is to enable
operational self regulation?
System 2 - Co-ordination - Who or what is to
commence the organisation of that operation?
System 1 - Operation – What does the operation
concern?
The PICCO method came to be the glue that usefully holds together the strategic
planning process of GRV. Thus in concluding Diagrams 9, 10, 11, 12, 13, and 14 and the
role that PICCO plays in the GRV strategic planning process, we have come to relate
PICCO to the Espejo and Harnden (1989) view of the VSM, as a ‘pointer for understanding
and action’—for we think it allows S1 and operational activity employees to think
‘M’ – Methodology
‘F’ – Framework of ideas involves of AR brings to the
how S3 and S2 will decide on what model iteration. In
intelligence is required at S4 this case Bateson’s
(1973) ‘Four Stages
of Competency’
S5 S5 particularly in each
Policy Policy of S2, S3 and S4
S4 S4
Intelligence Intelligence
S3 S3
Control Control
S2 S2
Coordination Coordination
S1 S1
Operation Operation
‘A’ – Area of
Simple PICCO showing information AR change method PICCO detailing application is
flows from the area of application Beer’s (1985) VSD, Checkland’s (1991) S1
[operation] to formulation of policy SSM template iteration
Diagram 14 Linking PICCO to action learning
123
creatively about the parts they play in GRV’s operational management. Clearly a repre-
sentation of VSM, as a non-ordered thinking process, PICCO may be applied for any GRV
club operation, at any hierarchical level of decision-making. Thus the unpretentious
Diagram 7b allows PICCO to work as a rudimentary ‘method’22 for learning and action in
the workplace, particularly for everyday employees.
However, the learning which evolved for GRV employees does not entail a detailed
elucidation of the theory-bases that underpin PICCO. Thus, primarily for the consideration
of experienced AR practitioners, we think that PICCO can is viewed as a simple, yet
effective, emergent action learning framework. Hence, in integrating the theory bases that
are common to our thinking, the purpose of Diagram 14 is to refer the PICCO theory-based
method, back to an emergent Action Learning framework by way of mirror image. Further,
we see Diagrams 14, 15, and 16 as linking the theory-based method PICCO to emergent
Action Learning frameworks.
On the left hand side of Diagram 14, PICCO is compressed down to its most rudi-
mentary format, a simple non-ordered way to think while managing. Simultaneously, the
right hand side of the diagram is a diagrammatical depiction of but one AR change method
journey aka an emergent Action Learning framework. That particular framework emerged
through our consideration of work from in the main, Checkland (1991), Bateson (1973),
Beer and Argyris (1982). But it has also included work and theory-bases from to others. A
schematic coming together of the PICCO method and the emergent learning framework is
therefore shown as Diagram 15. Thus Diagrams 15 and 16 are for the consideration of
experienced Action Researchers.
Management Diagram 15: PICCO as a Theory-Based Method in an Emergent Action

Learning Framework
We must not cease from exploration and at the end of all our exploring will be to
arrive where we began and to know the place for the first time—T.S. Elliot
Diagram 15 emerged from some reflective thoughts about how our work is inextricably
linked to Beer’s first principle of control; the controller is part of the system under control.
However, in aiming to promote the usefulness of the VSM to management, PICCO does
not present different or improved theory; it really is just another way of ‘presenting’ the
VSM (and in particular cybernetic concepts) in simplified form. The paper thus concludes
with reflections that highlight how our entwined controlling roles contributed to the
emergence of PICCO as a rudimentary AR change method.
Our reflection has considered our interwoven roles as (a) the controller of an organi-
sational management process and also (b) the controller of this AR change process. Fur-
ther, an assessment of the role of the controller of this one organisation is probably best
judged internally at the organisation concerned, by reflecting on whether the organisation is
‘realising its vision and goals, in constant adaptation to the milieu into which it is
embedded’ Espejo et al.(1996, p. 65).
As the contextual systemic interaction of five components, we find that PICCO, in
observing VSM principles, may generate order into the initial randomness of organisa-
tional behavior and flexibility—only if employees manage to reorganize and improve their
ways by learning to deal with organisational complexity. PICCO thus usefully uses a most
basic format of the VSM whereby the surfacing of local, sometimes tacit knowledge
22
See footnote 3.
123
ORGANIZATIONAL ACTION RESEARCH
INCREASING PICCO INCREASING COMPLEXITY

FEATURES AND OF EMERGENT ACTION
COMPLEXITY LEARNING FRAMEWORK
Rudimentary PICCO as Rudimentary learning,

shown in Diagram 7(a) trying to get better with
a focus on systems
thinking
ADD - Action and

PICCO as shown as learning, AR,
Diagram 7(b) learning in
reflective cycles
ADD -
PICCO also including Checkland’s
the features of Diagrams SSM, FMA,
5, 7 and 8 Argyris SLL,
ADD -
PICCO also including Bateson’s
the features of Diagrams Four Stages
9, 10, 11 Model
PICCO also ADD -

including the Beer’s
features of VSM
Diagrams 12, 13
PICCO
Diagram 15 PICCO—theory in an emergent action learning framework
123
Diagram 16 a The nature of a scientific model—Beer (1966, p. 114). b Beer’s account of scientific
modeling (Midgley 2003, p. 272)
creates a responsive mechanism that is valuable in addressing complexity in the real

workplace. PICCO thus simplifies the operative components of the VSM by the articula-
tion of questions that are animate and contextual. Finally PICCO, as a distinctive way of
thinking, adheres to what we believe are three fundamental tenets of management. The first
123
tenet is becoming smarter than the situation being managed (Ashby). The second tenet is
an understanding that control is not only imposed onto an operation, it also emerges from
that operation (Beer). The third tenet is the principle of recursion where strategies and
thinking are all contained within the next level. Diagram 15 is therefore a depiction of how
these interconnected controlling roles contributed to the emergence of PICCO.
Management Diagram 16: The Linkage of the VSM and Emergent Action Learning
Frameworks
Finally, in not under estimating the difficulties of attempting to link scientific theory with
social practice (Kast and Rosenzweig 1972; Emery 1981; Argyris and Putnam 1985) our
view is that the cybernetic foundations of Beer’s VSM are aligned with AR change
processes and the pursuit of management learning and knowledge production. In AR, we
see researchers as part of organisational ‘learning-laboratories’ [the controller is part of the
system under control]. We accept that objective knowledge is impossible because
researchers are always part of the context they study. However as an interpretive research
methodology, AR is characterised by common elements that appear in its methods, models
and inquiry strategies. In reiterating that PICCO might best be described as a learning tool
for introducing the VSM, and in particular cybernetic concepts to organisations in a
simplified form, for clarity, we are not suggesting PICCO presents new theory or a new
scientific model (Diagram 16).
Thus while Beer’s account of ‘scientific’ modelling process does not prescribe the use
of the VSM, it does prescribe that the success of theory-based management methods is
reliant on their application in action learning frameworks. We show this via the devel-
opment of Beer’s (1966) original view on the nature of a scientific model, into Midgley’s
(2003) most recent depiction.
Hence in using Midgley’s expression—a VSM (simply represented as PICCO) has
mapped a management method onto a firm. It is now up to others to test a second, third,
and so on VSM against the scientific model—by the now classical criterion of falsifiability.
Conclusion
We have provided everyday managers with a simplified and useful approach to the VSM
and its founding theories. Through a sequence of diagrams based on Beer’s original
drawings, minus the lexis, we have demonstrated how the VSM may underpin a process for
strategic planning in one organisation. Comprehensible for a broad range of employee
competency levels, the diagrams show how the AR method PICCO, became the glue that
holds together the strategic planning process for the organisation. We have also demon-
strated how the cybernetic foundations of Beer’s work align with AR change processes, the
pursuit of management learning and knowledge production. This ‘distinctive way of
thinking rather than a specific concrete subject’ (Bateson 2000) has thus created a unique
theory based AR change method for this organisation.
References
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San Francisco
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Syst Pract Action Res (2011) 24:429–452

A Set of Conventions, a Model: An Application

John Stephens • Tim Haslett

Published online: 12 March 2011

Keywords Management Action research Stafford beer—viable systems model

J. Stephens (&) T. Haslett

A Sequence of Sixteen Management Diagrams

Management Diagram 1: Thinking About Management Principles

Diagram 1 Thinking about

• Managers need to think

Table 2 Thinking about management principles

Management Diagram 2: Management of Operations Involves Recognition

A model is neither true nor false: it is more or less useful—Beer (1985, p. 2)

• Managers control some

• These operations provide

• Think about the

Diagram 2 Management of operations

Table 3 Management of operations

Management Diagram 3: The Interaction of Management, Operations

Homeostasis, the stability of a system’s internal environment despite the system’s

Diagram 3 The environment, management and operations

Table 4 The environment, management and operations

Environment An ‘internal’ environment having to cope with Ashby’s (1956)—law of

Management Diagram 4: All Levels of ‘M’ Exhibit Control

Diagram 4 Major and minor Tension - Confusion

Varity—may be practically Managing complexity VSD, attenuation, amelioration

have a greater capacity to transmit a given amount of information, relevant to variety

Management Diagram 5: Thinking About Thinking is Difficult

Management Diagram 6: PICCO

Stage One – Unconscious Incompetence (UI)

Stage Four – Unconscious Competence (UC) S

Diagram 5 Four stages of competency (attributed to Bateson 1973)

Diagram 6 The five systems that underpin PICCO

internal organisational Senior Management Team (SMT)14] to a quite distinctive template,

Management Diagram 7: PICCO and MODE at GRV

System 5 - Policy – Who or what will ultimately make

Non - ordered thinking

Non - ordered thinking

Management Diagram 8: PICCO at Differing Hierarchical Levels

Diagram 8 PICCO recursive Individuals in Clubs/SMT in The Board of GRV

Table 6 Words and phrases that have evolved from Diagram 8

Non ordered thinking processes PICCO VSD—Beer (1972, 1979,

Management Diagram 9: PICCO, Subsidiary Viable Systems, Thinking Recursively

Management Diagram 10: Reduplication of a Cybernetic System of Regulation

What we are doing is to reduplicate a cybernetic system of regulation recursively that

All clubs responsible for

Diagram 9 PICCO, subsidiary viable systems (clubs)

Management Diagram 11: An Ever-Spinning Wheel

Like a circle in a spiral, a wheel within a wheel, never-ending or beginning on an

Diagram 10 Reduplication of a cybernetic system of regulation

Management Diagram 12: Strategic Balance

MODE LAYER ONE

Club and SMT objectives

MODE LAYER TWO

MODE LAYER THREE

Diagram 11 An ever-spinning wheel

Management Diagram 13: GRV Hierarchy of Systems

The set of formal hierarchical roles in an organisation embodies a particular shared

Diagram 12 Strategic balance

Management Diagram 14: PICCO a Theory-Based Emergent Learning Framework

System 5 - Policy – Who or what will ultimately make

Diagram 14 Linking PICCO to action learning

Management Diagram 15: PICCO as a Theory-Based Method in an Emergent Action