Managing populism from a Cybernetics perspective

If the individual or their organization are incapable of associating effects with their causes, then learning and adaptation is not possible and both will go on repeating the same error increasing disenchantment among the populace and fueling populist movements.

Wikipedia: Populism is a political doctrine that stems from a viewpoint of struggle between the populace and a ruling faction.

Populism is most common in democratic nations. Political scientist Cas Mudde wrote that, “Many observers have noted that populism is inherent to representative democracy; after all, do populists closely connected ‘the pure people’ against ‘the corrupt elite’? Leaders of populist movements in recent decades have claimed to be on either the left or the right of the political spectrum, there are also many populists who reject such classifications and claim not to be “left wing,” “centrist” or “right wing

Michael Kazin, author of “The Populist Persuasion”, comes close when he describes populism as “a language whose speakers conceive of ordinary people as a noble assemblage not bounded narrowly by class, view their elite opponents as self-serving and undemocratic, and seek to mobilize the former against the latter”.

Some consideration regarding populism:

  • Populist can easily augment disenchantment of the populace by exploiting human weakness (ignorance) via propaganda specifically via social media. Social media such as blogs and Facebook perfect tool for disseminating propaganda. Ample evidence found during run-up to Brexit with respect to EU or recent Italian referendum.
  • There is a clear evidence of systemic consequence when populist movements become the ruling faction in Venezuela and Philippines. Venezuela classical example of how a populist became the ruling faction and destroyed the economy
  • Populism has surged in US, GB and currently Italy
  • Populism can actually be positive if managed correctly.
  • In Italy the main populist movement is the anti-establishment, anti-business, anti-euro Five Star Movement, a party founded just seven years ago by TV comedian  Beppe Grillo ( convicted criminal manslaughter)
  • Farage fundamental populist succesful in promoting GB Brexit without explaing clearly consequences of the Brexit
  • Most populist movement leaders once becoming the ruling faction have proven to be selfish and self-centered only interested own interest rather than interest of the populace
  • Social media has helped to accelerate acceptance of populist views among the populace
  • Successful populist leaders are extremely competent in exploiting social media specifically twisting the truth or accentuating lies. Italy M5S extremely successful exploiting social media via the founder blog and is used as springboard within the social media sphere. Italy populist leader blog structured in such a way that there is no accountability of what is posted in the blog from facts to lies to pure propaganda
  • Contrary to the written media or news there is no accountability within social media.  Social media (example Facebook) can be simply exploited by publishing false information, twisting the truth or failing to put things in context without any form of accountability. Social media provides real-time immediate mass invasion across the social network. The published post spread like wildlife through organized real and fictitious social media accounts to generate anger among the populace giving rise to the populist movement.
  • Adopted policies will fail: Abandoning the euro by Italy (key strategy of some the major parties) will not make the nation more prosperous considering that the real problems are systemic: low potential, viability and resilience excessive criminal activities
  • Possibility of revolt: once in power populist governance can result in serious revolts either due to failing to deliver what’s promised or actuating what’s promised causing serious damage. GB dilemma: Brexit will cause a revolt if not implemented and will cause a revolt once implemented due to possible internal economic damage. Reality is that within a system, patterns of behavior emerge that trigger system archetypes. Italy M5S intention to exit the Euro and possibly the EU will trigger certain emergence of specific archetypes.
  • Emergence of populist movement are directly connected to disenchanted populace in weak systemic environments where governors “ruling faction’ have failed to understand and address the disenchantment. Italy traditional ruling class failed to adapt and address  social concerns. The evidence is the lack of economic growth, high un-employment serious problem within the Italian banking system.

Cybernetics always consider a systemic view: A system consists of interconnected set of elements (sub-systems) that are coherently organized and work in coordination with each other to achieve a desired goal or overall objectives of the whole. These elements derive their strength by means of association and influence with other elements whereby collective contribution of the system is greater aggregate individual elements: this is known as systemic synergy. Cybernetics recognizes that a ‘whole’ system exhibits emergent properties that are not found in its parts and each part has properties not possessed by the whole.

Cybernetics is about governance, trying to ensure that goals established by the organization are achieved: it is also referred to steersman placed at the helm of a ship to steer towards desired destination by ensuring that the system reaches its potential, that the system is viable and that it is resilient.   By doing this it populism has no reason to exist or they do they can effectively managed.

Cybernetics is a trans-disciplinary approach for exploring regulatory systems, their structures, constraints, and possibilities. Cybernetics key objective is viability: Viable means capable of independent existence and implies both maintaining internal stability and adaptation to a changing environment. “Internal stability” and “adaptation” can be in conflict, particularly if the relevant environment is changing rapidly

Management Cybernetics key role is to assit management (command and control) understand:

  • How the system (organization) works or does not work
  • Why it works in a specific way
  • What to do about the system (organization) to influence the outcome in a way which is beneficial to the purpose being served

Cybernetics provides strategies direction for both preventing or combating populist movements which can be extremely damaging or actually helping populist movement to succeed. Cybernetic fundamental governance criteria are based on viability an sustainability which will then ensure that:

  • The rise of populist movement can be avoided by effective systemic adaptation thus avoiding disenchantment of the populace
  • Populist movement can be effectively overcome by adopting Cybernetics criteria and effectively addressing disenchantment of the populace.
  • Populist movement in adopting Cybernetics fundamental governance criteria actually succeed in improvising general conditions of the populace and effectively address adaption and change.

The emergence of mass TV, internet , social media has increased human probabilism in turn increasing complexity and ability of the governors or “ruling faction” to manage intended outcomes (desirable outcomes). Probabilistic behavior exists when the behavior of some the elements of the system are considered partially random: the variety (complexity) of the world is increasing as the number of actions and interaction increases. Social media has exponentially increased actions and interactions; the mechanism to manage this complexity can be found within ‘Ashby law of requisite variety’ by applying variety engineering. In a nutshell: in order to effectively manage complexity and increasing probabilistic behavior, the governors (ruling faction) must command as much variety it seeks to control probabilistic behavior with two methods:

  1. Reducing variety of the system to be controlled (variety attenuators or filters)
  2. Increasing the variety manage unit or governor (amplification)

Variety engineering should be undertaken in a manner which is suitable for the particular system under study (organization, state ect..) and should contribute to the achievements of its purpose and goals.

This implies firstly: applying variety engineering to effectively manage complexity  which in turn will avoid disenchantment and rise in populist movement and responding to false and distorted propaganda (when it exists) eliminating from populist movements.

Typical response to populism:

  • Brexit referendum: Government failed to set up independent experts to filter false or distorted view’s. Failed to put in place adequate information management to display these view in effective manner.
  • Italy failure to address mass migration from Africa and other areas by failing to provide a clear message (amplification) that Italy doors are not open to uncontrolled mass-migration
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Information Technology from a Systemic Perspective

A system consists of interconnected set of elements (sub-systems) that are coherently organized and work in coordination with each other to achieve a desired goal or overall objectives of the whole. These elements derive their strength by means of association and influence with other elements whereby collective contribution of the system is greater aggregate individual elements: this is known as systemic synergy. Cybernetics recognizes that a ‘whole’ system exhibits emergent properties that are not found in its parts.

A key consideration is that complexity is a property is a property of a system when examined is the product of the interactions of four main aspects: the number of elements, their interactions, their attributes and their degree of organization. The number of elements refers to the number of sub-system responsible for transformation (input, transformation, and output) contained in system. The interaction describes the richness of the connectivity between these elements. Attributes refers to individual properties of the elements that is their particular nature and features. The degree of organization is the extent to which interactions and attributes are guided by predetermined rules.

Self-regulation describes the ability of a system to ‘manage’ itself (feedback) towards its purpose or goals despite environmental disturbances based on ether balancing or reinforcing feedback:

  • First order feedback whereby the goal is determined externally to it
  • Second order feedback where system is capable of choosing between variety responses to environmental changes in order to achieve its goal
  • Third order system is one that is capable of changing the goal state itself in response to feedback process determining the goal internally s opposed to externally

System behavior can either by deterministic where its behavior can be known in advance as any input to the system will generate predictable outcome. Probabilism exists where there are elements of the system whole behavior is at least partially random: where ‘most likely’ outcome of the predicted variables are uncertain. (Variety engineering)

System Effectiveness and efficiency are attained through interaction of the sub-systems in pursuit of the purpose of the system in its environment via sub-systems.

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Being effective is about doing the right things, while being efficient is about doing things right are both fundamental in achieving goals related to potential, potentiality and capability.  This is only possible if there is total cohesion by all the sub-systems with respect pursuit of system purpose. Within a system there is Information Technology Infrastructure which acts as mechanism supporting each sub-system. From a system perspective IT has a fundamental role in that:

  • It impacts the function of the sub-system elements responsible for transformation
  • It impacts the relationship between sub-systems
  • It impacts attributes and properties of the sub-system
  • It impacts variables of attributes and their goal state
  • It impacts efficacy synchronization of the various elements
  • It impacts ma agreement ability to control and carry-out decisions

Based on the role IT has, it is then fundamental that it does not impose constraints, that is adaptive in that relationship between elements and their properties are adaptive due to changing environmental conditions and that it leverages efficiency, capability and potentiality.

System Information Technology Infrastructure (ITI) consists of combined set of hardware, software, networks, facilities, etc. (including all of the information technology store, retrieve, transmit, and manipulate data ), in order to support sub-system ability to realize system purpose by managing its platform, processes, devices and data.

IT infrastructure refers to the composite hardware, software, network resources and services required for the existence, operation and management of an enterprise IT environment.

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IT management is the discipline whereby all of the information technology resources of a system are managed in accordance with its needs and priorities. These resources may include tangible investments like computer hardware, software, data, networks and data center facilities, as well as the staff who are hired to maintain them.

Enterprise Architecture is a discipline for proactively and holistically leading enterprise responses to disruptive forces by identifying and analyzing the execution of change toward desired business vision and outcomes. EA delivers value by presenting business and IT leaders with signature-ready recommendations for adjusting policies and projects to achieve target business outcomes that capitalize on relevant business disruptions.

From a Systemic perspective ITI needs to be in total cohesion with the overall purpose and overall goals/objectives of the whole (system) by:

  • The Information Technology Infrastructure must support the various system functions in achieving its purpose and must ensure cohesion towards total system purpose and goals
  • The ITI sub-system must be an enabler for viability.
  • The ITI sub-systems must enable achievement of effective potentiality and capability
  • The ITI sub-systems must contain effective feedback in order to optimize system processes
  • The ITI sub-systems must be able to co-ordinate and synchronize  effectively  the sub-systems responsible for the primary transformation activities (delivery products / services ) The ITI must be able elevate conflict with respect to co-ordination various function due to constraints
  • The ITI sub-systems must be able to generate alerts timeously with respect to deviations from stated goals of critical variables goal sate
  • The ITI sub-systems must be adaptive: must be adaptable to changing business requirements
  • The ITI sub-systems must responsive : must be able to respond to business needs timeously
  • The ITI sub-systems must be flexible (rather than rigid) : must be flexible to changing system needs

The ITI sub-system must be managed so that it is efficient (cost and resource perspective) and effective: therefore the right IT technology.

 

Feedback

A System is defined as a set of interrelated components that work together to achieve common goals, accepting input data (input) and producing results (output) in an organized transformation processes.

Self-regulation describes the ability of a system to ‘manage’ itself (feedback) towards its purpose or goals despite environmental disturbances based on ether balancing or reinforcing feedback:

  • First order feedback whereby the goal is determined externally to it
  • Second order feedback where system is capable of choosing between variety responses to environmental changes in order to achieve its goal
  • Third order system is one that is capable of changing the goal state itself in response to feedback process determining the goal internally s opposed to externally

The properties of the whole are superior to and different from combined properties of the parts.

A system consists of the following functions:

  • Input and Output

    • Involve collection / acquisition and assembly of the elements that enter the system to be processed.
    • Example: raw materials, energy, human effort are basic components of the production system;
  • Processing (Processor operations)

    • Involves the transformation process which converts the input data into a finished product
  • Output

    • The result of the transformation process, for example, the finished product or service
  • Control

    • What control a process
    • Working procedure
    • Feedback
  • Mechanism

    • Resources used for the conversion process
    • Equipment and facilities
    • People
  • Environment

    • Customer, vendors, controlling authorities, competitors
  •  Feedback

    • Is the return or influence the outputs cause the entrances to balance the functioning of the system

feeback-3

The feedback mechanism is a communication between the output and the system input and the main functions of feedback is to control the systems output, maintain the balance and survival.

feeback-2

Feedback is a method of controlling a system by reinserting into it the result of its past performance (Norbet Wiener).

Feedback key propose is also to ensure homeostatic balance: maintaining stability. Negative feedback is a central homeostatic and cybernetic concept, referring to how an organism or system automatically opposes any change imposed upon it. Negative feedback arises out of balances between forces and factors that mutually influence each other. To illustrate several of its important characteristics, we can regard a car and its driver as a unified, complex, homeostatic or “goal-seeking” system in that it seeks to keep the car moving on track.

Oscillation is a common and necessary behavior of many systems whereby abrupt negative feedback, however, usually over-corrects. A negative feedback, if it is as large as the disturbance that triggered it, may become an impressed change in the direction opposite to that of the original disturbance. Negative feedback takes time and such a time lag is an essential feature of many natural systems. This may set the system to oscillating above and below the equilibrium level.

feedbacks 6.png

A feedback loop where the outputs of a process are available as causal input to that process. The causal input (cause and effect of related elements) influencing the process. The influence can either be reinforcing (positive) or balancing (negative).

Feedback loops control a system’s major dynamic behavior. A feedback loop is a series of connections causing output from one part to eventually influence input to that same part. This circular flow results in large amplification, delay, dampening effects, which is what causes the gross behavior of the system. Every part is involved in one or more feedback loops. Systems have more feedback loops than parts, which causes unimaginable complexity. Feedback loops are the main reason a system’s behavior is emergent.

Systems contains only two kinds of feedback loops: reinforcing and balancing, also called positive and negative feedback loops. Complex systems are typically composed of multiple interacting feedback loops: some negative some positive.

Positive feedback result in escalation/growth while negative feedback result equilibrium/homeostasis and oscillation.

A feedback loop occurs when a change in something ultimately comes back to cause a further change in the same thing. If the further change is in the same direction it’s a positive or reinforcing loop. If it’s in the opposite direction it’s a negative or balancing loop, also called a goal-seeking loop.

Understanding Feedback Characteristics enables efficient design of feedback:

  • Positive feedback

    • Increasing returns
    • A small change is amplified not corrected by feedback
    • Changes grow without limit until some other factor intervenes
    • Pairs of positive feedback systems can oscillate between two unstable states
    • Examples
      • Interest rates
      • Birth rate
  • Information Flow

    • Control Information
      • Information about what has been achieved in the output is fed back to allow the process to be tuned
      • Without this information no learning or improvements can take place over time
      • The cost and energy involved feedback effect the efficiency of the system
      • Within social process feedback has to be interpreted
    • Issues
      • Only reasonably linear processes benefit from simple feedback
      • Discontinuation in system behavior may be more important than continuous
  • Gain and Delay

    • Delay : The delay that is introduced between the output to when its feedback into the input. Long delay creates system instability so that it cannot be controlled by its mechanisms impacting resilience. Medium delay produces oscillations while short delay gives smooth response converging on the desired output.
    • Gain : The gain of negative feedback process is the scale of the version of the output fed back into input
  • Simple Feedback

    • Process Control: Information from downstream process is fed back upstream. From simple input-process-output model measure the output and compare with desired output values. Use the feedback to adjust the input for subsequent process
    •  Example
      • Mechanical – thermostat controlling a central heating system
      • Economics – Equilibrium of supply and demand via price
  • Goal directed behavior

    • Establish the goals
      • Establish set of measure or observations that indicate progress towards the goal
      • Verify what has been achieved in achieving the goal
      • If necessary change the goal or change the measure
      • Carry-out actions that converge towards the goal
    • Examples
      • Central heating system
      • Targets in managing the economy
  • Controlling Systems

    • Useless Controls
      • Control action that only seem to produce the required behavior
      • Control action working against the logic of the system (its purpose)
      • Control actions that are subverted by other actors in the system
    • Subtle intervention
      • Adjustment or additions simple rules (variety amplifies)
      • Making the connections between actions and system purpose more transparent
  • Emergent behavior

    • The behavior of the system cannot be predicted on the basis of the behavior of the elements
    • Intervention in the system have inherently unpredictable outcomes
    • If individuals or their organization is incapable of associating effects with their causes then learning and adaptation is not possible and both will continue repeating same errors

Causal Relationship related to Feedback Using System Model

According to this model the function of price in a market system is as follows:

  • It is an effect of given relationship between Supply and demand
  • At the same time it is a causal relationship the levels of supply and demand

feedbacks-7

Thus sometime the market forces have the effect of balancing supply and demand and stabilizing prices.

Understanding the limitation of system model:

  • Sometimes difference in prices are not reflect to changes to demand and supply
    • It can be elastic: responds quickly
    • Inelastic : responds weakly, slowly or not at all
  • Sometimes changes in supply and demand are not reflected in the prices
  • Sometimes there are other systemic stuff (market turbulence) going on that the effects of market forces are obscured

Designing feedback:

According to Goetz, a feedback loop involves four stages:

  1. the data, a behavior or evidence.
  2. relaying the information to the person in a context that makes it emotionally resonant or relevance.
  3. the paths ahead the information illuminates, or consequence.
  4. the moment when the individual can recalibrate a behavior, and take action.

 

Feedback cannot influence the past but only the future: therefore feedback design must consider those transformation processes that that need to be adjusted to achieve desired objectives.

Coping and intervention in Complex System

It is fundamental when undertaking systemic transformation to avoid costly mistakes that can be detrimental to viability and sustainability.

System failure does not stem from cause and effect relationship but from pathology of the system as a whole. 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. System governance is a continuous cycle due to systemic external and internal conditions requiring effective adaptation.

gover_cycle_01

According to Doerner (cf Doerner 1992) six classes mistake people are prone to make  in coping with and intervening in complex systems:

  • Class I: The perception and description of system objective is too narrow. It is imperative to clearly define the system  in order to understand the system and its emerging behaviour
  • Class II: The situation analysis of a system focuses on quantitative data and static aspects  without considering dynamics and causal relationship. Systemic transformation requires thorough system architecture  and dynamic analysis
  • Class III: Intervention in a complex system irreversibly focuses on single favorite aspect. This can be overcome by means of relevant transparent teams to address problems and adaptation adopting Team Syntegrity to filter-out bias
  • Class IV: Blindness of side effects. This can be overcome by adopting Causal Loop diagrams to identify cause and effect relationship and more important identify emerging patterns of behavior.
  • Class V: The intervention is a complex system are first to weak and then too strong. System dynamics modelling can be used to evaluate efficacy of intervention. Systemic cockpit is also fundamental to evaluate systemic systemic state, achievements of its goals and via feedback its efficacy.
  • Class VI : The intervention in complex system is dominated by authoritative behavior that overestimates level of understanding of the system. This can be overcome by means of adopting Viable System Model as a governance approach for design and diagnosis furthermore Team Syntegrity tend to diminish authoritative behavior.

Organizational Cybernetics: Viability

According to Beer the following characteristics are essential for any social, economic , industrial management system to ensure viability:

  • The ability to grow (maximize potential)
  • The ability to renew
  • Ability to ensure robustness against internal breakdown and error
  • Ability to continuously adapt in a changing environment and ability to survive under unexpected conditions
  • The ability to learn from repeated  experience and ensure optimum response to the stimuli
  • The ability to maintain systemic equilibrium via multi communication connections with the environment

The Viable System Model (VSM) of Beer is an approach of Organizational Cybernetics that aims aims at the design and diagnosis of complex organization. By applying this approach weakness of structure , function, communication and interaction can be easily revealed and adaptation initiatives realized to maintain viability.   According to VSM organizational system shall have normative, strategic, auditing, coordinating,  operative management and alarming functions that operate and interact in order to maintain organizational viability.

Systemic Throughput

Generally most KPI are a waste of time and effort. Most are ‘so what’ KPI. They are isolated KPI that do not contribute to real business benefits. Some are mainly output related rather than throughput related; Example case is inventory versus throughput.
The key difference is that throughput is based on what is actually billed and delivered, while output is something produced and sitting in inventory providing zero value to the organization. Fundamentally throughput relates to cash flow, productivity and profitability; the key elements of any success factor of an organization.
Having throughput as a KPI measure provides the ability for any organization to achieve its goal; the goal of being profitable and ability to grow. The rest has no relevance.Throuput pic

Throughput also directly influence productivity, net-profit; all those fundamental elements that are critical to any organization but strangely never really measured correctly.

Measuring throughput on its own provides limited value without linkages to the organizational elements resources, markets, teams and process which are all part of the system. Throughput is the outcome of a system. System Thinking considerations:

• A system is greater than the sum of its parts

• A system is not the sum of its elements/parts – it is the sum of their interactions. IT interacts with other areas. In order to maximize manufacturing, the objective is not output but rather throughput (what is made and sold). The parts that interact can be the following:

    • Manufacturing Equipment, tooling
    • Skilled resources
    • Manufacturing execution system
    • Manufacturing planning and control system
    • Management structure
    • Policies

Fundamentally each one needs to consider how they interact with each other. The performance of the system depends on how well the parts fit together

Therefore to maximize throughput it is important to optimize the interaction between the various elements of the system.

Introducing multi-dimensional throughput KPI measurement , will ensure the visibility of direct contribution of related elements (the system) that have an impact on throughput:

  • Resources
    • Manufacturing Plants
    • Throughput for actual manufacturing site
    • Productivity for actual manufacturing site
    • Manufacturing equipment / System
    • Throughput for actual key constraining resources
  • Markets
    • Geographical area
    • Product Brands
    • Customer groups
    • Organizational Teams
  • Sales
    • Marketing
  •  Information Technology
    • Manufacturing
    • Supply Chain
    • Finance
  • Process
    • Design
    • Order
    • Make
    • Sell

Business Transformation projects sometimes fail because apart from change management there is no clear indication how it will contribute to real benefits; how will it contribute to increasing throughput.

Concepts:

• Throughput (T) is the rate at which the system produces “goal units.” When the goal units are money (in for-profit businesses), throughput is net sales (S) less totally variable cost (TVC), generally the cost of the raw materials (T = S – TVC). Note that T only exists when there is a sale of the product or service. Producing materials that sit in a warehouse does not form part of throughput but rather investment. (“Throughput” is sometimes referred to as “throughput contribution” and has similarities to the concept of “contribution” in marginal costing which is sales revenues less “variable” costs – “variable” being defined according to the marginal costing philosophy.)

• Investment (I) is the money tied up in the system. This is money associated with inventory, machinery, buildings, and other assets and liabilities. In earlier Theory of Constraints (TOC) documentation, the “I” was interchanged between “inventory” and “investment.” The preferred term is now only “investment.” Note that TOC recommends inventory be valued strictly on totally variable cost associated with creating the inventory, not with additional cost allocations from overhead.

• Operating expense (OE) is the money the system spends in generating “goal units.” For physical products, OE is all expenses except the cost of the raw materials. OE includes maintenance, utilities, rent, taxes and payroll.

Organizations that wish to increase their profitability should consider the following:

1. Increase throughput? How to increase, in what areas?

2. Reduce investment (inventory) (money that cannot be used)? How?

3. Reduce operating expense? How?

The answers to these questions determine the effect of proposed changes on system wide measurements:

1. Net profit (NP) = throughput – operating expense = T-OE

2. Return on investment (ROI) = net profit / investment = NP/I

3. TA Productivity = throughput / operating expense = T/OE

4. Investment turns (IT) = throughput / investment = T/I