And this story repeats itself through the history of management science; almost every classic of the literature seems to have described a way of adapting systems to a more complicated world, and then to have become obsolete itself. If you look past the slogans and think about what things like âmanagement by objectivesâ, âfocus on core competencesâ and so on actually mean, they are all different ways of advising executives to restructure their businesses so that they donât generate complexity faster than it can be managed.
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Trying to build things meant that everything had to be kept specific, but the theory of information couldnât straightforwardly be applied to massively connected systems. You needed to find a way of describing things that was both rigorous and representative of reality. As economists will tell you, this isnât an easy thing to do.
If a manager or management team doesnât have information-handling capacity at least as great as the complexity of the thing theyâre in charge of, control is not possible and eventually, the system will become unregulated.
The overlapping of different systems â and the tendency of individuals to have different roles at different levels of abstraction â is a key part of Beerâs theory, and one of the main reasons why his diagrams got so complicated. He claims that every âviable systemâ 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 youâre trying to diagnose why a system is failing, you need to consider both the larger system in which itâs 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 âhigher functionsâ. A division of this sort will generally be a âproblem childâ; 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.
Of course management theories change â when the foundations of the problem are constantly shifting, the answers are bound to change.
If you translate this problem into the more abstract language of cybernetics, it becomes easier to understand. In the business environment, complexity (environmental variety) will naturally increase. In any given organisational structure, the variety which management systems can bring to bear also increases, but more slowly.*
*If it was possible to measure variety in absolute terms for real-world.
This is the paradigm shift that might be required â that organisations and systems can be like people, having purposes without a single goal. An artist doesnât have a successful career by maximising their art; they do it by repeatedly producing work that they are proud of.
Thatâs what the world could look like if we got rid of the blind spots. Business ought to be like artists, not paperclip maximisers. The economic concept of optimisation, and the institutions of management and government which enforce its use, effectively act as a brutal information reducing filter. By taking away the pressure to maximise a single metric (and therefore to throw away information that doesnât relate to it), organisations could apply their decision-making capabilities much more effectively. They could innovate more, design more sustainable solutions and build less adversarial, longer-term relationships with their people.