System 3 is where you start to find *management jobs — those that are entirely devoted to communication and administration within the organisation. It’s also where system-level accountability is established; the key activity of the integration and optimization function is to agree the resource bargains with the System I units, and to ensure that they are being kept. And consequently, it’s the first place you might start to look if you think that unaccountability is creeping into the system. We’ll be looking at this a lot, later.

It’s easy to get confused between systems 2 and 3. Both of them look like they’re doing the same thing, in making the operations accountable to one another and to the wider organisation. The difference is that System 2 is all about preventing clashes and managing conflicts, while System 3 is concerned with achieving a purpose. On the ground, a useful way of drawing the distinction is to look at the management functions which everyone agrees to be necessary as opposed to those that they complain about.

*Stafford Beer refers to the part of the system responsible for internal organisation as the ‘metasystem’, one of very, very many newly coined jargon words which I am going to attempt to shield you from.

At the front is a conductor — and here we can see why Stafford Beer often said it was difficult to separate the operational systems. The conductor has one definite System 2 role; to mark the beat so everyone plays in time. That’s clearly regulatory in nature, but the conductor isn’t just a human metronome. They’re responsible for the dynamics of the piece, directing instruments to play softer or louder at the appropriate points, and to change the tempo according to the needs of the piece. System 3 integration and management role of the conductor is to provide the feedback to the musicians about the noise they’re making and how it needs to adapt.

Matching ‘here and now’ with ‘there and then’

This brings us to the highest conceptual level of the system. We’ve emphasised at every stage that management is about variety engineering: making sure that every management function is matched, in terms of its information-handling capability, to the kinds of shocks and variety that might affect it. So System 3 has to be matched to the variety it manages (the exceptions and escalations coming out of System I), and System 4 has to be matched to its own source of variety (the uncertainty about the future and things happening outside the immediate environment).

There are two obvious failure modes here — changing too much, and changing too little. If the orchestra never changes its programme it will stagnate, but if it changes too often the musicians will be under-rehearsed and quality will suffer. The Variety transmitted from the intelligence function needs to be matched both to the change it anticipates in the environment and to the capacity of the operational function to reorganise itself.

The overlapping of different systems — and the tendency of individuals to have different roles at different levels of abstraction — is a key part of Beer’s theory, and one of the main reasons why his diagrams got so complicated. He claims that every ‘viable system’ needs to have all five of the functions described so far in order to be capable of long-term survival, but that every such system can also be seen as System I within a larger system. Similarly, since we defined System I as part of an organisation that could in principle be a viable separate organisation, the internal management of System I needs to have its own equivalents to systems 2, 3, 4, and 5; it needs internal regulation, optimisation and intelligence, and a balancing, identity-preserving function of its own.

Often, when you’re trying to diagnose why a system is failing, you need to consider both the larger system in which it’s embedded and the organisation within its operations. A great source of management problems, for example, is that organisations often fail to identify some of their operations as distinct systems, and so they lack their own internal ‘higher functions’. A division of this sort will generally be a ‘problem child’; unable to absorb its own environmental variability, it will bounce from crisis to crisis, taking up disproportionate time and effort on the part of the middle managers to which it has been assigned.