Pal’chinskii’s first principle1 urges us to experiment with a variety of ideas to increase the chances of success. And this was echoed years later by the British scientist W. Ross Ashby in “An Introduction to Cybernetics2” — the science of communication and control in living and mechanical systems. Ashby coined the “first law of cybernetics”: the “Law of Requisite Variety” — the variety in a system's control mechanism must be at least as great as the variety in its environment to achieve control. In other words, if your environment is changing faster than your ability to respond, you’re in trouble.3
To understand Ashby’s Law, picture a thermostat controlling the temperature in a room by switching the heating system on or off whenever it reaches a pre-determined level. But instead of constantly monitoring the room’s temperature, the thermostat only checks it once a day, before switching the heating system on or off. In this case, on some days the room will overheat as the heating is left on, while on others the room will be cold as the heating is turned off. The thermostat is the room’s control mechanism and, in this case, it lacks the ‘requisite variety’ of responses needed to keep the room at an ambient temperature.
The control mechanism in an organisation is management. It chooses the direction, hires teams, sets incentives, and decides which technologies to invest in to deliver results. But unlike the simple mechanical system the thermostat controls, management has to deal with an unpredictable human system. Uncertainty reigns as the system’s parts literally have minds of their own. To make it easier to control, managers often try to turn the organisation into a more predictable, ‘well-oiled machine’. They favour “best practices4” over disruptive new ideas. They measure success against KPIs, rather than the more complex task of how well the system is adapting to external changes. And they push out the mavericks — those who challenge the status quo — in favour of those considered a better ‘cultural fit’ and less likely to rock the boat.
The pursuit of predictability comforts managers, but also creates a dangerous disconnection that can threaten the organisation’s survival. By filtering out disruptive ideas, the organisation fails to develop the “requisite variety” of responses needed to adapt when the external environment suddenly changes, for example, when a disruptive new technology appears, or a powerful new rival appears. The rigid organisation — built on the ‘one right way of doing things’ — has developed no repertoire of alternative approaches it can draw on, and has no mavericks left who can provide different options. Facing a crisis, managers of these organisations can only hope everything will ‘go back to normal soon’. But hope is not a good strategy.
Adaptivity Intelligence (AQ)
Organisations struggling to respond to change have low Adaptivity Intelligence (AQ). These organisations lack the range (or requisite variety) of options needed to adapt successfully to change. They can be described as “dead players5” — following outdated scripts, lacking the ability to innovate. In contrast, high-AQ organisations are “live players” — experimenting with the new to develop the requisite variety of options they need to respond fast if the old ways of working suddenly stop working.
Told something is "best practice”, a ‘dead player’ asks: Who did this? What was the result? Can we copy it? A live player instead asks: Why is this best practice? When was it best practice? How does this apply to us now?
Live players learn from others, but don’t copy 'past practices’, as they know that this is like driving fast on a mountain road while only navigating via the rear-view mirror. Instead, live players look forward, seeking what will work next — embracing Pal’chinskii’s first principle (experimenting with a variety of ideas to increase their chances of success). But they also embrace Pal’chinskii’s second principle — accepting that some failure is inevitable, so they keep projects small enough that any failure is survivable. They favour multiple, small6 experiments that quickly deliver incremental results that can be built on — giving them the edge over low-AQ rivals focused on delivering slow-moving ‘big wins’.
Fig.9: Ashby’s Law of Requisite Variety and Adaptivity Intelligence (AQ)
Adapted from ‘Complexity and Organisation–Environment Relations: Revisiting Ashby’s Law of Requisite Variety’. - Boisot and McKelvey (2011)
Thriving in conditions of uncertainty requires management — the organisation’s ‘control mechanism’ — to continually monitor information flowing in, and make course corrections in real-time. Yet managers struggle with this as the data they rely on is often complex, ambiguous, unreliable or incomplete.7They attempt to filter out ‘noise’ by insisting information is presented in short reports, or complex ideas are simplified into case studies they can copy. Yet, amongst the ‘noise’ are also unique ‘signals’ — information that doesn’t fit the norm — that can trigger new insights into how to respond to change successfully.
What Can Managers Do?
Pal’chinskii’s third and final principle advises us to develop effective feedback loops between decision-makers and those closest to the action, to quickly identify and select what works in the local context. Frontline staff — those closest to the action with customers — need to experiment with new ideas and feed back information to management about what’s working in practice and what isn’t. Management can now simply choose to do more of what’s working and less of what isn’t.
Responsiveness shifts the manager’s role from trying to predict the future and control all the variables to enabling a sufficient variety of experiments to be launched (Pal’chinskii’s first principle). This comes from hiring diverse talent — different backgrounds, experiences and ways of thinking — and encouraging them to run experiments that are safe-to-fail, so they won’t bring down the organisation (Pal’chinskii’s second principle), then amplifying successes. This is how management develops the requisite variety of responses an organisation needs to adapt intelligently in a changing world. Let’s see how this works in practice.
Responsiveness shifts the manager’s role from trying to predict the future and control all the variables to enabling a sufficient variety of experiments to be launched (Pal’chinskii’s first principle). This comes from hiring diverse talent — different backgrounds, experiences and ways of thinking — and encouraging them to run experiments that are safe-to-fail, so they won’t bring down the organisation (Pal’chinskii’s second principle), then amplifying successes. This is how management develops the requisite variety of responses an organisation needs to adapt intelligently in a changing world. Let’s see how this works in practice.
2 An Introduction to Cybernetics. W. Ross Ashby (1956) http://pespmc1.vub.ac.be/books/IntroCyb.pdf
3 Also echoed by Jack Welch, see chapter two — Adapt or Die
4 On the futility of copying “best practices” see Introduction: Why 'Best Practices' Are Holding You Back.
6 As opposed to ‘fail-safe’ (building something that won’t fail) ‘safe-fail’ encourages the launching of multiple experiments to learn what works or doesn't in a particular context. The portfolio of experiments launched can even be contradictory in order to test competing hypotheses — far better to take action and learn what really works (and what doesn’t) in your context than waste time debating theoretical ideas in meetings, often based on data from the past extrapolated into the future and topped with much wishful thinking. Experiments that have positive outcomes can then be amplified with further action, whilst those with negative outcomes are dampened, with lessons learned as to why they failed fed into further experiments. This approach has been popularised by the Cynefin Framework.
