1. Enterprise Design Process: Function View Johan Strümpfer

2. Enterprise Design Workshop 3 Functions

3. ENTERPRISE PARTS INTERACTING AROUND AN OVERARCHING BUSINESS PURPOSE NOT A CONGLOMERATE NOT NECESSARILY A GROUP WITH PARTS MORE OR LESS IN THE SAME BUSINESS NOT A FINANCIAL HOLDING A SYSTEM

4. ENTERPRISE DESIGN THE DELIBERATE ARRANGEMENT OF FACTORS INTO A SYSTEM THE INTEGRATION OF INTERACTIONS INTO A REGULATED WHOLE

5. Meaning of Organise –Way the enterprise works –Pattern of interaction between parts –How enterprise is set up to deliver what is required –How the parts fit together, statically and dynamically ?

6. SYSTEM A regulated set of relationships Interacting and interrelated parts Parts organised for a purpose A whole with novel features

7. SYSTEM VIEWPOINTS FUNCTION STRUCTURE PROCESS REGULATION

8. DEFINITION OF FUNCTION ä ROLE OF ENTITY IN WIDER CONTEXT ä RELATIVE TO CONTEXT ä RELATIONSHIP: ENTITY/CONTEXT ä EMERGENCE & HIERARCHY

9. FUNCTION P={F,F,...,F} 12n ä Single structure--multiple function ä Multiple structure--single function ä Multiple function ---> Purpose ä “WHY?” ä Purpose & Meaning & Worldviews F S S S 1 2 n S F F F 1 2 n P C M & W ?

10. MED Process Framework Intro & Overview Org. struct. Deconstruct Immersion Stakeholder Analysis VSM BPD Analysis of MED Intervention Design MED

11. ENTERPRISE FUNCTION ¶ ALIGNMENT WITH ENVIRONMENT ä Shifting values & expectations ä Viability: Serve its environment ä Stakeholder view · INTERNAL ALIGNMENT ä Organise dynamically ä Viability: Variety management ä Viable Systems Model

12. STAKEHOLDER VIEW ä What is required to align with the environment? ä What does the enterprise need to deliver to be viable?

13. STAKEHOLDER ä Stakeholder’s view of the enterprise ä Stakeholder’s logic, rationale and value systems ä Stakeholder’s choice to be stakeholder

14. Measuring enterprise success S1S1 S2S2 SnSn S4S4 S3S3 Enter- prise

16. STAKEHOLDERS Who should be (are) the stakeholders? Who should be served? Who are the clients/ beneficiaries?

17. EXPECTATIONS What should the purpose be, from the client’s (beneficiary’s) perspective? What should (are) the client’s measures of performance? What are the underlying worldview assumptions that makes this meaningful to the client? P C M & W

18. STAKEHOLDER RATING ä CRITERIA ä Power ä Satisfaction ä Certainty ä Impact ä Influence ä PRIORITISING ä Analytical Hierarchical Process

19. Stakeholder Rating

20. WHAT ARE THE OUTPUT GOALS FOR SELECTED STAKEHOLDERS? What should be produced to satisfy the expectations of the particular client/stakeholder? What are the tangible and intangible deliverables? What are time related requirements to satisfy the expectations?

21. ä PURPOSE ä How the enterprise intends serving its stakeholders ä Vision ä Mission statement ä IT’S A PROCESS! ä What needs to be delivered? ä BUSINESS PROCESS DESIGN ä What needs to be done to deliver? STATEMENT OF ENTERPRISE PURPOSE P={F,F,...,F} 12n

22. VIABLE SYSTEMS MODEL ä History and popularity ä Background ä Essence ä Use

23. VIABILITY AND SUSTAINABILITY: Viable Systems Model (VSM) is a model for questioning functions required for the whole enterprise to act as a viable and sustainable system.

24. SOURCES OF MANAGERIAL COMPLEXITY

25. MANAGEMENT & COMPLEXITY

26. ORGANISING FOR MANAGERIAL COMPLEXITY

27. MANAGERIAL FUNCTIONS: INTELLIGENCE

28. MANAGERIAL FUNCTIONS: CONTROL

29. ä Developing policy (decision rules) ä Responding to signals from other functions ä Arbitration between external and internal demands ä Represents the whole in the environment MANAGERIAL FUNCTIONS: POLICY

30. MANAGERIAL FUNCTIONS: OPERATIONS-1

31. MANAGERIAL FUNCTIONS: OPERATIONS-2

32. MANAGERIAL FUNCTIONS: CO- ORDINATION

33. MANAGERIAL FUNCTIONS: AUDITING

34. VIABLE SYSTEMS MODEL

35. System 1: Implementation system System 2: Co-ordination of System 1 parts System 3: Control of System level 1 parts System 4: Development or intelligence function System 5: Policy setting system

36. ADVANTAGES OF VSM ä Directs questioning to essentials of organising for handling complexity ä Directs internal organisation to promote learning and adaptation ä Directs internal organisation to fulfilling set goals ä Puts focus on management ROLES and clarifies actual roles ä Emphasises viability as a function of environment and internal functioning being aligned ä Directs attention to interaction of parts not lines of authority ä Good systemic conceptual basis

37. LIMITATIONS OF VSM ä Organismic origins of VSM silent on essence of social systems (human dimension) ä VSM silent on purposefulness, notions of power, culture, values, management style ä Over-emphasis on System 1 at expense of higher system levels weaken ability to adapt. ä VSM can entrench mechanistic/organismic autocratic management style ä VSM designed enterprise is not solution to change management ä VSM approach traditionally diagnostic and not design orientated ä Seductive in its simplicity

38. Case Studies ä Case 1: Description given in the handout pp 15-17. ä Case 2: Helping a group see itself in the whole.

39. VSM SYSTEM DIAGNOSIS ä [SYSTEM IDENTIFICATION] ä SYSTEM DIAGNOSIS ä STAKEHOLDER ANALYSIS --> OUTPUTS ä VSM DIAGNOSIS OF ENTERPRISE

40. DIAGNOSIS: SYSTEM 1 ä How do enterprise parts map to the required outputs? ä What parts of the enterprise are System 1 components? ä What measures of performance are applied? ä How is accountability, responsibility and authority acquired, devolved and implemented? ä What is the scope for decision making? ä [process modelling]

41. DIAGNOSIS: SYSTEM 2 ä Identify sources of turbulence for System 1 parts, including conflicting demands ä Identify System 1 co-ordination requirements ä Identify System 2 components ä Examine facilitation role of System 2 components, as opposed to control role. ä Query perceptions of System 2 role in rest of enterprise

42. DIAGNOSIS: SYSTEM 3 ä Identify System 3 parts ä Determine shared System 1 resources and allocation rules ä Examine scope of authority, responsibility & accountability ä Determine measures of performance System 3 applies to System 1 ä Clarify audit/information gathering into System 1. ä Examine perceptions about System 3 in System 1 & System 3 management style

43. DIAGNOSIS: SYSTEM 4 ä Is System 4 functions discernible? ä What activities constitute System 4, and who does it involve? ä Assess degree on inward/outward focus, and openness of System 4 to environment ä Assess scope and time frame of interest to System 4 ä Assess preoccupation of System 4 with maintaining stability vs renewal ä Examine degree to which System 4 support learning in Systems 3 and 5.

44. DIAGNOSIS: SYSTEM 5 ä Who represents the enterprise when viewed from stakeholders’ perspectives? ä Assess degree of identity and positioning of enterprise determined by System 5 ä Does System 5 manage the enterprise vision, mission and alignment with this? ä Assess degree of preoccupation of System 5 with System 3 (operational) vs. System 5 (strategic)

45. DIAGNOSIS: INTERACTIONS ä List the vehicles for interaction between different systems ä Check that appropriate information is channelled through these vehicles ä Check for parallel communication lines (informal) that bypasses/replace Systems 2-5 ä Assess speed of communication Vs perceived turbulence

46. FREQUENTLY DIAGNOSED FAULTS ä Systems 1 are often not handled as viable systems in their own right. ä Systems 2-5 seek viability in own right ä Additional structures not explainable in terms of VSM are found ä Systems 2 and 4 are often weak and immaturely developed. ä System 5 collapses into System 3 and fails in truly performing System 5 role ä Inappropriate information is channelled between systems, or not rapidly enough communicated

47. Application ä Go through an application of the stakeholder design of enterprise functions ä Do a VSM diagnostic and design of your enterprise

48. ORDERING OF ACTIVITIES ACROSS ALL PROCESSES ä CATEGORIES OF ACTIVITIES: ä Monitoring and Auditing ä Co-ordinating activities ä Control activities ä Primary production activities. ä Support process activities ä Common, shared activities