Human Systems Management

This paper introduces the idea of, and necessity for, a ‘third-order cybernetics’. It does this through the critique and problematisation of the ontology of the observer as elaborated within a second-order cybernetics. The necessity for this third-order is directly generated from our work as strategy consultants and our needs to evolve an effective, coherent and ethical consultancy practice.

The paper draws primarily on the writings of Lacan and Maturana to provide the epistemological presumptions upon which we generate a new characterisation of, and approach to, the business organisation. This new approach for the understanding of the business organisation is presented as an ‘Economy of Discourses’. This Economy is a description of the effects of a third-order in the second-order observer's invention of himself as subject. We have formulated this approach as an aid for diagnosis, intervention and prognosis in our work with business organisations.

We include two case studies, one of a chemicals-based manufacturer, the other of a large accountancy practice. In these two cases we seek to unpack and illustrate the way in which it is possible to use the new approach, and to highlight the principles which allow the consultant maximal movement and effectiveness in relation to his client system. We end by outlining the implications of our approach for an ethics of consultancy.

The relatively new understanding of self-organisation completely outranks the importance of the classical cybernetic principles (cybernetics) on which most of the science of change was based.

After more than ten years' experience of looking through the spectacles of self-organisation, we may say that we will regard the processes of change in a completely different light. There appear to be major similarities, whether they occur in individual people, in groups, in organisations or at a social level.

We may make a clear distinction between developments which pass off gradually and in a controlled manner on the one hand and changes on the other. The latter are discontinuous and entail a temporary period of some chaos.

We have learned how patterns are broken up and replaced by new ones. We understand how and why a distribution of tasks and a hierarchy arise in complex processes and how these are determinative for the form and structure of organisations. We understand why rigidity and stagnation arise where there are no adequate conditions for self-organisation.

Self-organization is frequently used more for purposes of prescription in the management field than to support analytical insights. Terms have changed such as organizational learning in place of organizational change; but it remains questionable whether our empirical understanding of this phenomenon has been altered.

In the following discussion, cognitive, structural, and political barriers will be examined in terms of behaviors which appear to inhibit organizational learning. It will be argued that these ‘sources of deception’ are in fact, built into the design of organizations. We do observe however, organizations which revise their strategies and reorient policies. Illustrations from a case study of the U.S. Peace Corps of the 1960's, will provide the basis for examining internal redundancies and competitive behavior and their potential to support conditions of self-organization.

The notion that organizations can learn is not new [1]. But it will be more and more important to realize that organizations in a turbulent environment are more like systems in the chaos theory than like the ‘machine-like’ ones in the old theory, whose main topic was control. The new topic is increasing the organization's ability to learn. This article goes from chaos to images to the attributes of organizations in a turbulent environment. The ideas elaborated in this article are based on an extensive study of the strategic re-orientations of six major Dutch companies before, during and after a crisis.

It is striking that in my practical experience, in the end the concept ‘Boundary Management’ first of all relates to intrapersonal and interpersonal boundaries. Aversion, defence mechanisms, fear, etc. are aspects which play an important part here. In my opinion the possibility of steering and influencing the processes is overrated. Things just go the way they go. The only task left for the managers is to keep relations inside and outside the organization open. That precludes neurotic behaviour in organizations. The way to achieve that is to keep everything open to discussion and to appeal to the own strength. The solution to organizational problems lies with the managers and the employees themselves. The consultant can only act as a catalyst in the, sometimes arduous, discussions about each others performance.

I will also outline a few simple models, or rather metaphors which I use in my consultancy activities. Simple, making them recognizable for everyone in an organization. But tricky to use them in a disciplined manner. There is nothing new under the sun – for me neither. The only thing is that now and then I look at reality in a different manner, both in practice and in theory development. It makes the world of organizations habitable, understandable and, in the most favourable case, enjoyable and successful. And in this respect everyone chooses his own view of reality.