Growing Adaptive Organizations

Step A5: System Four, Outside and Then


To identify those parts of the System-in-Focus that are concerned with future plans and strategies in the context of environmental information.

Leading Question

Which parts of the System in Focus produce strategies for future planning.


Dealing with the future and the external world.


A5.1 Look for relevant external factors and trends

System 4 adds a separate environment bubble in the VSM diagram: the domain of Scenarios aka possible futures.

Review critically how the elements of the environment can change or influence he future of the organization.

A5.2 Collect the System 4 activities

List the activities of System 4. These include planning, research and development, actions to improve the resilience and adaptivity of your business, and so on.

The list contains all the activities that your System-in-Focus is undertaking in order to guarantee adaptation to the future. Is it complete?

Make sure the list refers to the System-in-Focus. Go through it and identify the items that refer to the embedded System 1 Operational elements.

Example: If you have a bio-food trading business in a large city.  Relocating goods to the optimal location refers to the System-in-Focus. Buying an additional Fork Truck refers to one of the Warehouses which is System One). Remove the items that belong in System One. You can perform a separate analysis at the next level.

A5.3 Cluster activities

Cluster the activities of System 4 under the headings like

  • Activity: What sort of planning?
  • Responsibility: Who has to do it?
  • Time Scale: C for current. One year if it needs to be dealt with in a year.
  • Priority: A, B, C, D or E (A the most urgent – They could all be E)

Several of the items on the list may be concerned with (say) Product Design, Technological Development, or Market Potential.

A5.4 Add People and Departments which are concerned with the Future

Write in the parts of your organization which are responsible for these tasks.

A5.5 Draw a diagram showing the overlaps.

This should be a separate diagram to visualize a specific situation: the interaction of different parts of System 4.

The table and the diagram below is an example taken from Jon Waters’ VSM Guide. At the time the company was in the process of relocating and the other major areas were rationalizing the machinery (selling some, buying others) packing for new customers, and their relationship with their single major customer.

HMWC worked example diagram
HMWC worked example diagram

The areas of overlap indicate how the various issues relate to each other, and the bit in the middle which has three areas overlapping (the move, new machinery, and relationship with a major customer) is the center of real concern about the future.

Each shaded area indicates where collaboration may be needed.

You will probably need to re-draw this diagram several times.

If the diagram you drew has no areas of overlap, then something should be done. It means that the members of your organization concerned with future planning are working in isolation, and this is obviously not a good idea.

However, it is not uncommon for Research and Development to become obsessed with technological issues and to ignore Market Research. And for Corporate Planning to degenerate into purely economic terms that pay little heed to R&D and Market Research.


The VSM diagram shows now Systems 1, 2 and 3 and the newly added System 4. It also shows that part of the external environment which is the specific area of interest for System 4, some of which is unknown.

System 4 also has to be in touch with the internal part of the VSM via System 3. This refers to the realistic scenario in which System 3 and System 4 focus on different priorities and will develop a healthy conflict.

Remember that we currently deal with an analysis of your System in Focus and that it might not have a System Four. For this function to work properly it must have a continuous focus: somewhere in the System-in-Focus someone must be looking at the environment and thinking about ways of dealing with a largely unknown future or even multiple scenarios aka possible futures.

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