About Systemic Governance

A system is an interconnected set of elements that is coherently organized in a way that achieves something “purpose and goal’ as defined by its governors (managers, leaders) via defined ‘course set’. System contains three kinds of things that form a complex and unified whole:

  • Elements
  • Interconnection between elements (physical flow and information)
  • Attributes (properties) to both system elements and relationships
  • System purpose and sub-systems functions

Systems are everywhere—for example: the R&D department, the human body, F1 racing team, automotive manufacturer , economic and political systems. Ecological systems and human social systems are living systems oriented towards system purpose; human-made systems such as manufacturing plant or Information technology architecture are nonliving systems which are oriented towards system function. Systems can also be made up of sub-systems that that can either have function or purpose.

A sustainable system is any system organized in such a way as to meet the demands of a changing environment and achieve is stated goal in time. A system needs to be continuously steered and adapted(governed) in order to be sustainable, survive (viable), grow and achieve its goals. Effective System Steering and Governance is only possible with a:

  1. Clear understanding of the system structure and behavior : purpose, function, elements , relationship and properties
  2. Adaptation is only possible with effective governance structure in place that allows continuous adaptation and ensure system efficacy, effectiveness, sustainability and viability
  3. Effective steering is only possible with a systemic cockpit that indicates system set course, goals, key variables, actual system state, governance efficacy diagnosis, initiatives to align to set course, models of the organization
  4. Effective steering can only be achieved with correct feedback: the correct action to correct the system current course: continuously addressing sustainability and efficacy
  5. Effective steering implies ability to learn from previous steering attempts to either avoid repeating damaging conditions or actually apply experience to amplify improvements
  6. Effective steering is only effective when the control tower contains esentials variables associated to goal state
  7. Effective steering means being able to address effective form of adaptation and goals: identifying opportunities for transformation (new industry paradigm) and or innovation initiatives

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Steering

The art of steering is to ensure that System state is as close as possible to its set course by carrying out necessary effective correction (adaptation doing the right things):

  • Correction to ensure set course goals are satisfied: Feedback to ensure system state course is adjusted to intended set course
  • Ensuring achievement of  optimal system capability and potentiality (constraint management)
  • Ensuring effective realization of stated  goals and continuous learning from system dynamic  emergence (cause and effect). Being effective is about doing the right things, while being efficient is about doing the things right with respect to sustainability, maintaining the set course and achieving sated goals.  This is only possible within a comprehensive adaptation framework.
  • Multi dimension sustainability assessments and adaptation:
    • Potential sets the limits to what is possible – the number and kinds of future options available. Maximizing potential considering current and future environmental conditions by undertaking transformation and adaptation. This is done via extensive modelling and team effort (team syntegrity) which may lead to system transformation (system paradigm change) and or innovation effort.
    • Governance determines the degree to which a system can control its own destiny through internal controls. This implies designing an effective  governance model for the system that will ensure viability and sustainability
    • Resilience determines how vulnerable a system is to unexpected disturbances and surprises that can exceed or break that control. This implies understanding system resilience and threshold and trying to influence its threshold to favorable state

Systemic adaptation is a continuous process of steering (course correction) and effective adaptation by ensuring that at any time system ideal potential, governance and resilience are maintained.

IMPACT REGARDING WEAK STEERING (staying on course)  

The fundamental aspect with respect to adaptation is to ensure that the rights things are done correctly when steering to avoid costly mistakes that can seriously undermine sustainability (viability, survival). There are ample examples of catastrophic failure considering disappearance of major organization such as Nokia, Texas Instruments, Polaroid, Palm: or catastrophic failures that required substantial government intervention such as banks or countries that are in permanent decline and survive thanks to excessive borrowing yet fail to grow and ensure a sustainable economy.

  • Initiatives that do not consider side effects or purposely avoiding side effects for short term gains
  • Poor feedback management
  • Unable to effectively manage complexity and variety
  • The wrong intensity of the intervention which could be firstly too weak then to strong (high cost of intervention) resulting excessive oscillation or failure to emerge from systemic vortex.
  • Intervention by authoritative behavior that underestimates understanding of system complexity: failure to exploit internal resources and teams. Focusing on CEO master of all
  • Intervention focused on single favorable aspect instead of considering systemic intervention
  • Description and perception of system objectives too narrow
  • Excessive focus on quantitative static data rather than dynamic behavior
  • Excessive investment in sub-system that provide limited leverage: extensive IT investment
  • Avoiding transformation and placing excessive emphasis on innovation: or ineffective innovation
  • Failing to manage system resilience

STEERING FRAMEWORK  

In order for a system to maintain its course efficiently and effectively the following framework needs to be in place which must be supported by means of System cockpit :

steering-2

A: System Definition

In order to effectively govern the system (internal and external) and ensure effective organizational design and intervention; system definition plays an important role in placing the system into perspective.

A system must consist of the following:

  • Function or purpose. Function is used for a nonhuman systems, while purpose for a human one. Many systems have both human and non-human elements.  Purposes are deduced from behavior, not from rhetoric or stated goals
  • Elements : structure define by parts and compositions
  • Behavior which involves inputs, processing of outputs of materials, energy or information
  • Static and dynamic properties of both elements and relationship channels
  • Variables associated to both elements and relationship
  • Interconnection: parts have functional and structural relationship between each other; relationships hold the elements together whereby there may be physical flow and or information flow between elements. Many of the interconnections in systems operate through the flow of information. Information holds systems together and plays a great role in how they operate
  • Systems (sub-systems) within systems that may have either unique purpose of function.

B: System Governance

Governance implies the ideal structure necessary to effectively control (steering, adaptation) the embedded. Governance not only implies effective design but also diagnosis of the governance structure in order to ensure continuous synergy between normative, strategic and operation management considering changes in environment system state versus the set course:

  • Normative management: Defying policy, identity, ultimate authority decisions within the organization as a whole to balance demands from different parts of the organization and steer the organization as a whole. Normative management (system 5) develops the organization’s overall vision and strategy
  • Strategic management: responsible for looking outwards to the environmental scanning, strategy, planning and innovation and to monitor how the organization needs to adapt to remain viable.
  • Operation Management: Management functions associated with systems 1, 2, 3 and 3*  with respect to delivery of service and products towards its known environment.
  • Process Management: Process management is a systematic approach to making an organization’s workflow more effective, more efficient and more capable of adapting to an ever-changing environment. A business process is an activity or set of activities that will accomplish a specific organizational goal. T
  • Ability to deal with complexity between environment and operational units, operational units an management: In organizational cybernetics implies that two elements (environment and operation units or operation units and meta management) which strive for successful interaction and  control either require an equal amount of variety or they need attenuators and / or amplifiers of their variety in order to attain mutual balance levels of variety in order to be successful in their interaction
  • Sub-system management
    • Information Technology Architecture

Systemic IT Architecture addresses aligning IT systems, applications, information and data, network and infrastructure  to support the systemic transformation systems to realize outputs within management defined goals

  • Equipment and facilities

The system cockpit should provide a visual diagnosis with respect to the governance structure.

C: System Goals and course set

This implies identifying and agreeing to system goals and plotting a set course in reaching these goals by identifying key essential variables against which effective steering. Fundamental variables to include variable related to system key goals, system potential and resilience. Variables need to be effectively associated to system elements and relationship in order to clearly associate emerging systemic behavior.

System cockpit plays and important role for effective steering and governance. The control of a  systems can never be a  matter of one-time decision-making, but rather it requires perpetual cycles of acts and affects  which over time any effect becomes the reason for another. (cf. Foerester & Poerksen 2011, p 107). Effective control tower ensures that the system is steered as close as possible to set course and it enables clear understanding of the effectiveness of its steering effort and adaptation initiatives.

The key purpose of the systemic cockpit is to be an enable effective governance of the system understudy:

  • How the system (organization) works or does not work
  • Why it works in a specific way
  • The responsiveness and efficacy of its steering and adaptation initiatives
  • What to do (steering and adaptation) about the system (organization) to influence the outcome in a way which is beneficial to the purpose being served

 

D: Steering

The art of steering or governance by ensuring effective correction of error towards defined course set in order to achieve stated goals with the aid of systemic cockpit. Steering has to ensure that there are management entities (VSM Framework) in place to co-ordinate the interfaces of its value-adding functions and the operations of its primary sub-units. In other words, co-ordination is necessary between the value-adding functions as well as between the embedded primary activities in order to optimize and achieve synergy, optimization and synchronization in order to maximize potentiality and capability.

Control channel from operational management through which resources are negotiated, direct line management instructions and goals are issued  and accountability reports flow upwards to keep the meta-level management in touch with events.

Fundamental aspect steering and control is to ensure is total cohesion by all the sub-systems with respect pursuit of system purpose.

E: System correction and Adaptation

If the individual or their organization is incapable of associating effects with their causes, then learning and adaptation is not possible and both will go on repeating the same error.

Actual correction by means of feedback within known system structure and process as well as adaptation initiatives which can either be related to Transformation and / or Innovation with the aid of  Team Syntegrity initiatives. Key focus with respect to adaptation is to identify initiatives that enable cost effective leverage.

The Intelligence function management by the strategic management service is the two-way link between the primary activity and its external environment. Intelligence is fundamental to adaptability; provides the primary activity with continuous feedback on marketplace conditions, technology changes and all external factors that are likely to be relevant to it in the future; secondly, it projects the identity and message of the organization into its environment. The intelligence function is strongly future focused. It is concerned with planning the way ahead in the light of external environmental changes and internal organizational capabilities so that the organization can invent its own future (as opposed to being controlled by the environment), create new industry paradigm, elevate its potential, provide operations management guidance with respect to adaptation

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