Task A4.3: Analyze the System Three Star and its Channel

What is Task A4.3?

Task A4.3 is part of the "Observe" phase in the Viability Canvas methodology, specifically within the "System Three: Optimization" step (Step A4). This task instructs you to "Identify the elements belonging to System 3* and the inquiry channel."

Purpose of Analyzing System 3* and its Channel

The purpose of this task is to identify and understand the mechanisms through which operational management (System 3) collects direct, unfiltered information from operational units (System 1). This serves several important functions:

1. Preventing blind spots: Identifying mechanisms that help management avoid information gaps
2. Understanding reality checks: Mapping how management gets ground-truth information
3. Identifying audit mechanisms: Recognizing formal and informal audit processes
4. Revealing information richness: Understanding how contextual information complements formal reporting
5. Distinguishing information from control: Separating pure information-gathering from control mechanisms

By analyzing System 3* and its inquiry channel, you gain insight into how operational management stays grounded in operational reality, preventing the formation of blind spots and enabling more informed decision-making.

Understanding System 3*

In the context of the Viable System Model, System 3* ("three-star") is:

• A pure research or inquiry mechanism
• Designed to collect direct, unfiltered information about operational units
• As close to real-time as possible
• Complementary to regular reporting channels
• Intended for information gathering, not direct control
• Essential for preventing blind spots in management understanding

System 3* provides management with rich contextual information that might be missing from standard reports, allowing for better interpretation of data and more informed decisions. Unlike the corporate intervention or resource bargaining channels, the inquiry channel is specifically for gathering information, not issuing directives.

How to Complete Task A4.3

To analyze System 3* and its inquiry channel:

1. Identify System 3 mechanisms* in your organization:
   • Look for formal audit processes and reviews
   • Consider "management by walking around" practices
   • Identify surveys or feedback mechanisms
   • Note any direct observation of operations by management
   • Consider special investigations or studies
2. Analyze the inquiry channel:
   • How is information collected through these mechanisms?
   • What is the frequency and regularity of these information-gathering activities?
   • How does the collected information flow to operational management?
   • Is the information complementary to what comes through regular channels?
3. Evaluate the effectiveness of System 3*:
   • Does it provide unfiltered, direct information?
   • Is it seen as information-gathering rather than control?
   • Does it occur frequently enough to keep management well-informed?
   • Does it cover all operational areas or are there gaps?
   • Does the information actually influence management decisions?
4. Document your findings:
   • List all identified System 3* mechanisms
   • Note their frequency and scope
   • Describe how the information flows to management
   • Identify any gaps or weaknesses

Example from a Manufacturing Organization

In a manufacturing company, System 3* elements might include:

• Gemba walks: Regular visits by managers to the production floor to observe operations firsthand
• Quality audits: Periodic detailed assessments of quality practices and outcomes
• Employee feedback surveys: Direct collection of input from frontline workers
• Customer feedback mechanisms: Direct information about product quality and satisfaction
• Special investigations: Detailed studies of specific issues or opportunities

The inquiry channel includes how this information is collected, documented, and communicated to operational management, creating a richer understanding than what's available through standard reporting processes.

By analyzing System 3* and its inquiry channel, the organization gains insight into how operational management stays connected to ground-level realities, essential for effective decision-making and continuous improvement.