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Step A4: System Three, Optimization

Purpose To identify the relations between the organization as a whole and its units, i.e. Systems One. Deal with aspects that cannot be handled by the Operational units or through

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Step A5: System Four, Outside and Then

Purpose 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

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Step A6: System Five, Identify the policy making

Purpose To identify those parts of the System-in-Focus which are concerned with Policy. Abstract System 5 is the mechanism that formulates the Identity, the Mission, or the North Star. Tasks

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Step B1: Review the results of the observations

Purpose Achieve an understanding of the System from a VSM perspective. Abstract Review the results of the analysis/preliminary diagnosis steps and draw first conclusions. Tasks B1.1 Review Review the system:

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Step B2: Look for Dysfunctions

Purpose Find frequently occurring dysfunctions. Abstract Locating frequently occurring dysfunctions is collecting low-hanging fruit. It shows particularly impressively the strength of the view of decisions and information flow, i.e. the

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Step C1: Designing Operational Autonomy

Purpose The best way to absorb variety, i.e. to deal with challenges and surprises is done locally. Interventions should be an exception and occur only when the unit cannot deal

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Step C2: Review Operational and Environmental Interactions

Purpose Review Systems two and three. Check if they are adequate or what needs to be done to improve their functionality. Abstract We will now look at the internal environment

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Step C3: Completing the Internal Balance

Purpose Ensure stability through a combination of horizontal synchronization and the necessary minimum of centralized management Abstract Tasks C3.1 Maximize Autonomy Make the Operational units as autonomous as possible. C3.2

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Step C4: Examine the Information Systems

Purpose Create information systems which are capable to provide real time information loops Abstract A good information system, providing up-to-date transparency and helping to concentrate on the important information, is

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Step C5: Design the Balance with the External Environment

Purpose Deal with observed and future changes in the environment Abstract There is no point in having a superbly organized internal environment if the enterprise as a whole is completely

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