Heart of the Matter LO20873

Gavin Ritz (garritz@xtra.co.nz)
Sat, 13 Mar 1999 21:53:05 +1300

Replying to LO20859 --

Roy Benford wrote:

> John Gunkler wrote:
>
> > The simplest statement of the Law of Requisite Variety that I have heard,
> > in an organizational context:
> >
> > The complexity of the internal structure of an adaptive (self-organizing)
> > system must be of the same order of magnitude as the complexity of the
> > external environment with which it must cope.
>
> An interesting interpretation of Ashby's Law of Requisite Variety which
> basically states that an equal or greater amount of variety is needed to
> control something. So if the system being controlled has four states then
> the controlling system needs to be able to present at least four states of
> control. Unfortunately, the environment will always have more variety
> than the system. There are approaches to reducing the variety of the
> environment of which socio-economic groupings is an example. So
> incidentally, is racism, sexism, and most other ism's.

I am not so sure that it is about control of the environment but rather
having appropriate responses to different situation, such as man versus
bear, man does not want to control the bear and his/ her environment but
rather live safely so that the bear does not hurt man. So we develop
things to protect ourselves, stronger houses, fences, guns etc etc.

> > Businesses have found this to be true, much to our chagrin. As we grow,
> > and the global marketplace becomes more complex, and competitors more
> > clever and numerous, we find that we have to be more complex in order to
> > succeed.
>
> Yes, it is an unfortunate process. As business become more global, they
> find other business that have taken different approaches to reducing
> variety. The irony is that business, in learning from their competitors,
> stop reducing the variety as much, ie acknowledge the greater variety in
> the environment. The desire to control the environment is a bit like
> "looking for the pot of gold at the end of the rainbow".

I think and this is only my opinion that we cannot learn from our
competitors but rather that we "better & better" understand our customers
varying needs, and respond better and better to that, that way we use the
law of requisite variety to its fullest extent. See my earlier discussion
on sales systems using this law. I do not believe the law has too much to
do with control over our customers, as they now hold all the power, as the
power has shifted from the producers to the buyers in the last 20 years or
so. Why would we want to control our customers? We really want only to
respond to their needs, wants, desires and aspirations, wishes, hopes.

> And, of course, the argument about variety can be extended internally
> within a business. The business now becomes the management team and the
> environment the employees. If the desire is to control is paramount, the
> management team will try to reduce the variety presented by the employees.
> I wonder what the effect of this on the ability of the business's ability
> to generate variety to control the external environment and how long will
> it take for the effect to be observed.

To respond to the external environment an organisation must have the
internal flexibility, yes I think you are correct in your above
assumptions, I have just witnessed this this week. Unfortunately this
ultimately destroys an organisation, if it cannot respond to its changing
environment, most fortune 500 companies from 10 years ago do not feature
any more as Fortune 500 companies, I think the % is about 75% but I could
be wrong.

-- 

Gavin Ritz <garritz@xtra.co.nz>

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