Task C5.3: Review your Ability to Change

What is Task C5.3?

Task C5.3 is part of the "Decide" phase in the Viability Canvas methodology, specifically within the "Innovate" step (Step C5). This task instructs you to "Based on the information about the external environment, look at the way System 4 formulates plans to ensure your organization can adapt to change. Does System 4 have enough resources? Does it focus on continuous operation? Can it simulate possible future situations? Which sources of resistance to change do exist?"

Purpose of Reviewing Your Ability to Change

The purpose of this task is to evaluate how effectively your organization can transform environmental intelligence into adaptive plans and actions. This serves several important functions:

1. Assessing adaptive capacity: Determining how well your organization can respond to environmental changes
2. Identifying planning constraints: Discovering limitations in your ability to formulate and implement change
3. Evaluating System 4 effectiveness: Determining if your organization's future-focused function has adequate resources and influence
4. Understanding change barriers: Identifying sources of resistance that might impede adaptation
5. Building change capability: Developing the organizational muscle for ongoing transformation

By reviewing your ability to change, you ensure that environmental awareness translates into effective adaptation, maintaining organizational viability in dynamic conditions.

Understanding Ability to Change

In the context of the Viable System Model, "ability to change" refers primarily to the capabilities of System 4 ("Outside and Then") to:

• Translate environmental intelligence into strategic options
• Formulate plans that prepare the organization for future conditions
• Model and simulate potential future scenarios
• Advocate for necessary adaptations
• Engage in productive dialogue with System 3 about balancing current operations and future needs

Effective change ability requires adequate resources, appropriate methods, supportive structures, and organizational readiness to implement the changes identified as necessary.

How to Complete Task C5.3

To review your ability to change effectively:

1. Evaluate System 4 resources and positioning:
   • Does System 4 have adequate staffing and budget?
   • Is System 4 positioned with appropriate authority and influence?
   • Does System 4 have access to necessary information and expertise?
   • Are System 4 functions clearly defined and assigned?
   • Is System 4 respected within the organization?
2. Assess planning and simulation capabilities:
   • What methods do you use for strategic planning?
   • How effectively can you simulate different future scenarios?
   • Do you have tools to model the impact of potential changes?
   • Is your planning process flexible and iterative?
   • Can you rapidly develop and evaluate strategic options?
3. Review the System 3-4 dialogue:
   • How effectively do operational management and future planning functions communicate?
   • Is there a productive tension between current operations and future needs?
   • Are conflicts between Systems 3 and 4 constructively resolved?
   • Does System 5 effectively moderate this dialogue?
   • Are decisions balanced between short and long-term considerations?
4. Identify sources of resistance:
   • What structural barriers might impede necessary changes?
   • Are there cultural factors that resist adaptation?
   • What political dynamics might block change initiatives?
   • How might resource constraints limit adaptive capacity?
   • Are there psychological factors contributing to organizational inertia?
5. Assess implementation capabilities:
   • How effectively does your organization translate plans into action?
   • What is your track record with previous change initiatives?
   • Do you have methods to manage change processes effectively?
   • Is there change management expertise within the organization?
   • Are leaders skilled at guiding transformational efforts?

Example Application

In a financial services firm review, the task might produce:

System 4 resources and positioning assessment:

• Strategic planning department understaffed relative to operational functions
• Innovation initiatives funded at 2% of overall budget, below industry average
• Strategy team perceived as disconnected from business realities
• Future-oriented functions fragmented across multiple departments
• Limited executive attention to long-term planning

Planning and simulation capabilities assessment:

• Annual planning process primarily extends current business model
• Scenario planning exercises conducted but rarely influence decisions
• Financial modeling sophisticated but limited consideration of non-financial factors
• Technology roadmapping process exists but operates in isolation from business strategy
• Limited capabilities to rapidly prototype and test new concepts

System 3-4 dialogue review:

• Quarterly strategy reviews dominated by operational concerns
• Innovation initiatives frequently deferred when operational pressures increase
• Cultural divide between "visionaries" and "operators"
• Limited structured processes for resolving tensions between current and future needs
• System 5 (board and executive leadership) tends to prioritize short-term results

Sources of resistance identification:

• Incentive structures heavily weighted toward quarterly performance
• Organizational silos impede cross-functional innovation
• Success with current business model creates complacency
• Risk-averse culture emphasizes avoiding mistakes over pursuing opportunities
• Middle management lacks change leadership skills and motivation

Implementation capabilities assessment:

• Previous change initiatives have had mixed results, with many failing to achieve objectives
• Project management discipline strong but change management capabilities weak
• Limited experience with transformational (versus incremental) change
• Communication about change typically one-way and focused on rational arguments
• Pilot projects often successful but scaling proves challenging

Strategic Considerations

When reviewing your ability to change, consider these strategic factors:

1. Balance exploration and exploitation: Ensure resources are appropriately divided between improving current operations and developing future capabilities
2. Create structured dialogue: Establish formal processes for productive engagement between operational and future-focused functions
3. Build change muscles: Develop organizational capabilities for change through regular practice with smaller initiatives
4. Address resistance systematically: Develop specific approaches for different types of resistance (structural, cultural, political)
5. Connect sensing to acting: Create clear pathways from environmental intelligence to strategic decisions and implementation
6. Leverage diverse perspectives: Ensure change planning incorporates viewpoints from across the organization
7. Develop feedback mechanisms: Create ways to learn from both successes and failures in change initiatives

A robust ability to change is essential for organizational viability in dynamic environments, ensuring that awareness of environmental changes translates into effective adaptation.