Exploring Coordination and Control through Contracts in Organizations

“Viable System Model” expert Mark Lambertz joins us on today’s podcast to help us unfold organizing in complex ecosystems. 

Mark, a long-time Agile practitioner and a renowned expert on the Viable System Model has a deep understanding and a curious mindset toward all things organizing. We met Mark as an Organizational Coach at Bosch, where he’s driving the adoption of key concepts of the VSM. From his extensive experience, Mark has helped us understand how to use the VSM lens to build autonomous and self-sustaining organizational systems. 

He takes us through the model’s components and practical applications and compares it with other organizational frameworks that we use widely, more specifically, Boundaryless’ Rendanheyi-inspired implementation of the Platform Organization with the 3EO Framework. 

The conversation - where we discover a lot of resonance between the two perspectives - is filled with valuable insights from the ground and helps you move towards a more inclusive model that balances operational efficiency with strategic adaptability.

Tune in, and don’t miss out. 

As one of the first attempts to use cybernetics in organizational management, the Viable System Model was conceived by Stafford Beer in his book - “The Brain of the Firm” in the 70s.

Mark connects the dots in this podcast and explains why cybernetics is important for building adaptive organizations. The podcast highlights the importance of viewing organizations as adaptive, complex ecosystems emphasizing decentralization, coordination, and collective and emergent strategic planning. 

He takes us through the depths of VSM, explaining how it starts with an outside-in perspective, focusing on the environment, and then further breaks down the 5 systems within VSM. 

In this conversation, you get practical insights into incorporating a VSM informed perspective in your organization, helping you stay dynamic and ever-evolving.

Key Highlights
👉 The Viable System Model (VSM) is crucial for understanding and designing organizations that sustain themselves through complex environments.
👉 VSM emphasizes starting with an outside-in perspective, focusing on the environment, customers, and markets first.
👉 VSM incorporates a form of hierarchy based on responsibility and inclusiveness, aiming to preserve the whole while allowing for local interests and self-organization.
👉 VSM includes five key systems to ensure organizational adaptability: operational units, value production, tactical management, future planning, and organizational identity. 
👉 VSM has a fractal nature meaning each operational unit contains its systems, mirroring the larger organizational structure. 
👉 The Rendanheyi/3EO model complements VSM by emphasizing decentralized decision-making and enabling constraints.
👉 The future of organizational design is evolving, with an increasing emphasis on creativity, optionality, and diversity. 

Topics /chapters
(00:00) Decoding Viable System Model - Intro
(01:27) Introducing Mark and VSM
(13:12) Hierarchies and Structures in VSM
(16:13) Fractal Structure of VSM
(22:12) Orchestrating the organization, market, and VSM
(27:20) Culminating learnings from VSM, Rendanheyi, and 3EO 
(39:46) Using the VSM Framework
(44:09) Coming of Age of Organizational Design and Development
(47:45) Breadcrumbs and Suggestions 

Remember that you can always find transcripts and key highlights of the episode on our website: https://www.boundaryless.io/podcast/mark-lambertz

Episode recorded on May 10, 2024

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Music
Music from Liosound / Walter Mobilio. Find his portfolio here: ⁠https://blss.io/Podcast-Music⁠