Task C3.2: Adjust Environments

What is Task C3.2?

Task C3.2 is part of the "Decide" phase in the Viability Canvas methodology, specifically within the "Stabilize" step (Step C3). This task instructs you to "Change the environments where each operational unit is involved if improvements can be made."

Purpose of Adjusting Environments

The purpose of this task is to optimize how operational units interact with their environments, focusing on creating clearer boundaries and reducing unnecessary overlaps or conflicts. This serves several important functions:

1. Reducing complexity: Creating cleaner interfaces between operational units and their environments
2. Enhancing autonomy: Giving units clearer ownership of their environmental interactions
3. Minimizing coordination overhead: Reducing the need for complex coordination mechanisms
4. Improving responsiveness: Enabling units to better adapt to their specific environmental demands
5. Clarifying responsibilities: Making it evident which unit handles which environmental aspect

By adjusting environments strategically, you create operational units that can function more autonomously and effectively, reducing the need for constant coordination and intervention from higher levels.

Understanding Environment Adjustment

In the context of the VSM, "environments" refer to the external contexts that each operational unit must interact with, such as:

• Customers or market segments
• Suppliers or resource providers
• Regulatory bodies
• Technological domains
• Geographical areas

Adjusting environments involves making deliberate changes to how these interactions are structured, which may include:

• Reassigning environmental domains between units
• Splitting or combining environmental responsibilities
• Creating clearer boundaries between overlapping domains
• Establishing specialized interface roles for complex environments

How to Complete Task C3.2

To adjust environments effectively:

1. Review your current environmental mapping:
   • Examine how operational units currently interact with various environmental domains
   • Identify areas of overlap, confusion, or conflict
   • Look for environments that are split across multiple units without clear rationale
2. Identify adjustment opportunities through:
   • Segmenting environments more logically (e.g., by customer type, geography, product line)
   • Realigning responsibilities to reduce coordination needs
   • Combining fragmented environmental interactions
   • Creating clearer boundaries between units' environmental domains
3. Consider structural changes such as:
   • Adjusting the segmentation of operational units to better match environmental demands
   • Reallocating responsibilities between units to create more logical alignments
   • Creating specialized units to handle complex environmental interfaces
4. Evaluate potential adjustments based on:
   • Reduction in coordination complexity
   • Enhancement of unit autonomy
   • Alignment with overall system purpose
   • Feasibility of implementation
   • Potential for improved performance
5. Document proposed environmental adjustments with:
   • Clear description of current and future state
   • Rationale for the changes
   • Expected benefits
   • Implementation considerations

Example Application

In a manufacturing company:

• Current state: Production units organized by manufacturing process (machining, assembly, finishing), requiring complex coordination as products move through all units.
• Environmental adjustment: Reorganize production units by product line, with each unit handling machining through finishing for a specific product family.
• Benefits: Each unit can better focus on its specific customer needs, reduce coordination overhead, and develop deeper expertise in its product domain.

In a service organization:

• Current state: Customer service teams handling all client interactions regardless of industry sector, requiring broad but shallow knowledge.
• Environmental adjustment: Reorganize teams by industry sector, allowing deeper specialization in specific client environments.
• Benefits: Enhanced expertise, better understanding of sector-specific requirements, and more consistent client experiences.

Implementation Considerations

When adjusting environments:

1. Balance specificity and flexibility: Create clear environmental domains without making them so narrow that units can't adapt to changes.
2. Consider transition challenges: Plan for how to manage the shift from current to future environmental alignments.
3. Ensure capability alignment: Verify that units have or can develop the capabilities needed for their adjusted environmental responsibilities.
4. Maintain system coherence: Ensure that environmental adjustments don't fragment the overall system purpose.
5. Plan for coordination at boundaries: Even with improved environmental alignment, some coordination will still be needed where environments connect.

By thoughtfully adjusting operational environments, you can create a more naturally stabilizing organizational structure that requires less coordination overhead and allows units greater autonomy in managing their specific environmental domains.