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.

Plenty of organisations have no formally identified central planning department, but the integration and optimisation function is performed by an informal network of System I managers. That’s perfectly possible, as long as they have made the mental leap understanding that from time to time they need to adjust their thinking to perform a coordination role for the benefit of the organisation. Stafford Beer occasionally seemed to suggest that this kind of informal internal networking could be the best way to create System 3, which was why a big lounge at head office with whisky and cigars was important.

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).

In fact, understanding that identity, philosophy and purpose are tools of information management us the key to understanding the most famous slogan of management cybernetics, ‘POSIWID’ — or the ‘purpose of a system is what it does’. The identity-creating function is intrinsically linked to the variety-balancing function. In working to balance the immediate needs of the system with its response to a changing environment, System 5 is making the decisions which determine ‘what it does’ and, consequently, its purpose. POSIWID is not just a glib piece of cynicism; it’s a description of how a system retains viability and identity. It’s also, we’ll see later, the key to understanding the polycrisis of the last two decades — the failures we see in operations and management of our society have their roots in specific questions of philosophy and ideology.

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.