Step A1: Define the System in Focus

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Purpose

To select a unit as the System-in-Focus and clarify its boundaries.

Abstract

The VSM is a recursive model, i.e. it describes units on each abstraction level in the same way. This reduces greatly the complexity of the context that we focus on.

On the other hand, this requires some discipline: we restrict our findings or change initiatives to one unit at a time. We call this unit our System-in-Focus. The purpose of this step is to identify the System-in-Focus and its superior system.

Tasks

A1.1 Sketch some Recursions.

Draw the candidate unit, e.g. “Bike Repairs” – or better, write the names on sticky notes for easier moving them

Then draw the higher-up unit (R+1 or the next recursion level), at least the next level (or as many levels as necessary to get a clear understanding). Maybe you will find several possible candidates for R+1 units.

Draw a larger shape around the Bike Repairs and draw in the next recursion upwards in which you are embedded. Perhaps it is “bike shop”. Again, put a larger shape around this one, and write in “The Sports Mall“, and so on.

During this process, you may want to add other units within the original set of nested recursions, like opening a Russian doll to find several identical smaller dolls. For example „bike sales“, „parts store“, and „bike repairs“.

Play with these and add units to the diagrams until you have a clear idea of what’s going on.

You might want to add the unit hierarchy until you reach the complete company. At the very least, it’s essential to map the recursions immediately above and below the System-in-Focus.

A1.2 Define the System-in-Focus.

You should now have a hierarchical diagram with organizational units that are embedded in others. Look at your diagram of the various recursions. Now decide which system interests you currently. This is your System in Focus.

The System in Focus might be your whole organization or one department or it may be a proposed federation of co-ops. But whatever, you have to be clear about what you are concentrating on. Later there may be lots of diagrams at various levels, and it’s easy to get distracted into the details of any one of these.

Now prepare the Canvas for the System-in-Focus. Use a large format, e.g. DIN A0, and pin it to a wall in your workshop room.

A1.3 Write down the Purpose of the System-in-Focus.

At this point, a statement of the purpose for the System-in-Focus should be written down below its name. Make sure you describe the real purpose of the system an do not fall into the trap of wishful thinking.^[1]

This will help to clarify several issues as the analysis continues.

Currently, this is being referred to as the Mission Statement, although Aims and Objectives is an equally clear way of expressing it.

Again: the point of this is clarity. Once the system-in-focus is defined with a name and a purpose, it’s much easier to keep your attention on the relevant issues.

A1.4 List the various parts and stakeholders.

Before starting the identification and analysis of the systems needed for viability, you should list all the parts of the System-in-Focus as you see them. This includes the list of stakeholders inside and outside the organization.

Collect the parts and stakeholders you know. Some of them will turn out as part of System 3, some as part of the environment, or as part of a unit higher up.

The list should be exhaustive as it will be referred to throughout the Analysis. It will contain the Operational parts, the accounting functions, the management functions, and so on.

Pitfall: In compiling the list, keep one eye on your sketch of the various recursions and ensure that the items on the list refer only to the system-in-focus. It’s likely that your first list will need revision and that one or two items will belong to another recursion. Check it carefully.

As the Analysis proceeds, you will be able to take the items on your list and allocate them to one or several of the 5 systems within the Canvas. Thus, the list will gradually disappear.

If your organization is perfectly Viable, the list will disappear completely and there will be 5 well-defined systems giving the basis for viability.

If not, some new jobs may have to be invented – or – some existing jobs are not needed for viability and can therefore be considered redundant.

Notes

Finding the appropriate abstractions for the System-in-Focus is not as trivial as it appears at first. For example: we focus on a business unit, say „Dishwashers France“. This unit could be part of a product organization „Household Appliances “ and of a distribution organization „Private Customers France“. Remember, we do not analyze the organization chart – and not the product flow. We are interested in the flow of information and decisions, and our focus will have an impact on our analysis later.

In some cases, we will find ourselves repeating this step for several alternative scenarios.

The analysis of your organization will be filling out the Canvas for the System-in-Focus. In some steps; you will create additional living documents which will be integrated into the global view in a later step.

At this stage, we start to get a grasp of the three main parts of the VSM – Operation, Metasystem, and Environment. Between them, they represent the overview of your System-in-Focus in its totality.

The Operation carries out the system’s basic activities. It will consist of several Operational units. It is the muscles, the production units, the parts that generate wealth.

The Metasystem is there to provide a service to the Operational units. It is there to hold the organization together. It is the brain, the regulator, the management.

The Environment includes all elements outside the control of the System-in-Focus: customers, suppliers, competition, regulation, and everything else.

The details of what goes on within each of these three shapes will be filled in as the analysis proceeds.

^[1] The issue of purpose is not as simple as it first appears, and for those of you who wish to read further there is a provocative bit of The Heart of Enterprise in which Beer discusses his ideas. The essence is that Purpose can only be defined as “What a system actually does”. It’s of no use having a purpose of “Bringing down the Capitalist Monster” if what you actually do is sit around and drink coffee all day. What matters is what actually happens. Beer therefore concludes that the purpose of the British railway system is to dissuade him from travelling by rail.

Step A1: Define the System in Focus

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