Management Cybernetics for Silicon Valley - Part 1

In today’s post, I will dive into to the discipline of Management Cybernetics and discuss the key fundamental ideas that underpin it. The post draws from the works of Stafford Beer, the father of Management Cybernetics, which he described as the science of effective organization.

After 23 years in the tech industry, including more than 15 years in Silicon Valley, I've observed a curious trend: As successful startups grow, they inevitably slow down. Innovation wanes or vanishes, quality and security suffer, and accomplishing tasks becomes increasingly frustrating. The constant need for coordination creates significant obstacles, hindering progress and so on…

The “bleeding edge” mainstream idea on this seems to be stuff like “founder mode”. But the answers to some of these challenges are to be found in a discipline that has mostly disappeared from the mainstream - cybernetics.

Enter the book, ‘The Unaccountability Machine’ by Dan Davies. Dan goes into the various factors and historic events/context to explain the decline in cybernetics' popularity over the decades. It is high time we brought this discipline to the foreground and takes its implications seriously.

I like Dan’s framing of “Unaccountability Machines” and the book’s subtitle really drives home the point: “Why Big Systems Make Terrible Decisions - and How The World Lost its Mind”.

I’ve seen so many terrible systems filled with good people and good intentions. As the saying goes, the road to hell is paved with good intentions. Let me explain…

I've spoken with numerous entrepreneurs over the years who previously worked in corporate settings and felt stifled by the inability to execute ideas and bring innovative concepts to market. For many, this bureaucratic environment was a significant catalyst for their decision to pursue entrepreneurship in the first place.

But, the irony is that IF they are successful, their own business ends up creating the same “unaccountability machine” for their employees - a bureaucracy that’s hostile to creativity, innovation and any tangible change to status quo.

As Ernest Cline put it, “Two-Face was right. You either die a hero, or you live long enough to see yourself become the villain!.”

If you don’t want to become that villain, read on…

Table of Contents

• Stafford Beer: An Unconventional Genius

• Feedback Loops & Control

• Viability

• Homeostasis

• Variety

• Law of Requisite Variety

• Appendix: Books Recommendations

Stafford Beer: An Unconventional Genius

Before I go any further, let me write a little bit about Stafford Beer so that you get a taste of the personality behind these ideas. Stafford Beer is a remarkable and unconventional figure who played a pivotal role in the development and application of cybernetics. While Beer achieved recognition as a prominent management consultant and intellectual, Davies also emphasizes his quirky personality and unorthodox approach to problem-solving in his book.

Beer's intellectual curiosity and diverse experiences led him to explore a wide range of fields. He engaged in psychology, mathematics, economics, and management consultancy, often challenging the traditional boundaries and practices of these disciplines. He was a self-taught expert in many areas, having taught himself university-level mathematics at the age of fourteen.

Dan highlights Beer's unconventional methods and ideas. From using an algae-filled pond as a computer to designing conferences based on an icosahedron, Beer consistently sought innovative solutions to complex problems. His approach was characterized by experimentation, iteration, and a willingness to embrace what worked, regardless of how unorthodox it might seem.

Let’s now to dive into some of the key ideas that underpin Management Cybernetics, along with some examples. In Part 1, we will explore five concepts, with access to the last four limited to premier-tier subscribers.

• Feedback Loops & Control

• Viability

• Homeostasis

• Variety

• Law of Requisite Variety

Feedback Loops & Control

Feedback loops are a fundamental concept in cybernetics, playing a crucial role in achieving control and regulation within organizations. Feedback loops are like a corporate game of "hot and cold," guiding organizations towards their goals.

These loops come in two flavors: positive (amplifying) and negative (balancing). Positive feedback loops are like a snowball rolling downhill, getting bigger and faster - they can lead to good growth or catastrophic failure. Negative feedback loops, on the other hand, act like a thermostat, maintaining stability by counteracting changes.

Positive feedback can drive innovation but may also cause runaway effects. Negative feedback helps maintain organizational stability and homeostasis. Effective organizations use both types of feedback to balance growth and stability. By implementing well-designed feedback loops, organizations can become more adaptable and responsive, much like a skilled surfer riding the waves of change in the business world.

Beer offers a valuable insight when it comes to designing controls based on those feedback loops. Watch him explain with an elegant example and analyze this in contrast with the traditional management approach of imposing control from the outside in:

The concept of control is intricately linked to feedback loops, forming a core principle in cybernetics and, by extension, Management Cybernetics. Stafford Beer presents a multifaceted perspective on control, moving beyond simplistic notions of top-down command to emphasize the role of feedback in achieving self-regulation and adaptation:

Control is Not External Imposition but an Emergent Property: Beer challenges the traditional view of control as something imposed externally by a designated authority. Instead, he argues that control is an inherent characteristic of viable systems, emerging from the interactions and feedback mechanisms within the system. This intrinsic nature of control means that the controller is an integral part of the system under control, evolving alongside it and shaping its behavior.

Feedback Loops as a Mechanism of Control: Beer consistently emphasizes that feedback loops are the primary means by which systems achieve control. He suggests that control is what allows systems to exist and operate, while arguing that studying control systems through the lens of cybernetics is crucial for designing effective management structures.

Feedback Loops Enable Self-Regulation: Beer underscores the importance of feedback in facilitating self-regulation. He suggests that systems do not need to predict every possible disturbance but rather require a mechanism for measuring their internal stability and a set of rules for responding to deviations from that stability. This description aligns with the concept of error-actuated negative feedback, where any deviation from a desired state triggers a corrective action, bringing the system back to equilibrium.

Variety Engineering through Feedback: Beer suggest that feedback mechanisms are crucial for achieving requisite variety. He explains how feedback mechanisms can amplify or dampen input fluctuations, allowing the regulator to match the variety of the system being controlled. This concept of ‘variety engineering’ through feedback is central to achieving effective control.

Different Feedback Loops for Different Purposes: Beer also explores various types of feedback loops and their functions within organizations. For instance, he highlights the importance of both horizontal and vertical feedback loops in maintaining viability. Horizontal loops focus on regulating the interactions between operational units within a system, while vertical loops connect different levels of recursion, enabling coordination and control across hierarchical levels.

Feedback and Adaptation: Beer emphasizes that control is not simply about maintaining a static state but also about adapting to change and ensuring long-term viability. Feedback loops play a critical role in this adaptation process. By providing continuous information about the system's performance and its response to environmental changes, feedback enables systems to learn, adjust their behavior, and evolve over time. Effective feedback mechanisms need to be able to analyze options and adapt to new information in order to maintain stability.

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