Brain of the Firm 2ndEdition StaffordBeer Contents Prefacetofirstedition 2 Prefacetosecondedition 4 Acknowledgements 6 PartOne: ConceptualComponents 7 SummaryofPartOne 8 Chapter1:Let’sThinkAgain 10 Chapter2:ConceptsandTerms 26 Chapter3:TheDimensionsoftheProblem 37 Chapter4:TheOrganizationofUnthinkableSystems 47 Chapter5:HierarchiesofControl 57 PartTwo: TheFormoftheModel 65 SummaryofPartTwo 66 Chapter6:TheAnatomyofManagement 68 Chapter7:ControlPhysiology 78 Chapter8:Autonomy 90 Chapter9:AutonomicManagement 103 Chapter10:TheBiggestSwitch 116 ii CONTENTS iii PartThree: TheUseoftheModel 129 SummaryofPartThree 130 Chapter11:CorporateStructureanditsQuantification 132 Chapter12:Autonomics‐SystemsOne,Two,Three 143 Chapter13:EnvironmentsofDecision–SystemFour 155 Chapter14:TheMultinode–SystemFive 170 Chapter15:TheHigherManagement 190 PartFour: TheCourseofHistory 203 SummaryofPartFour 205 Chapter16:AFlyingStart 206 Chapter17:IntoitsStride 218 Chapter18:TheOctoberWatershed 261 Chapter19:TheEndoftheBeginning 277 Chapter20:Prospectus 291 PartFive: Appendix 329 NotetoPartFour 330 Glossaryofcybernetictermsusedinthisbook 332 Selectbibliography 334 iv CONTENTS CONTENTS 1 DEDICATION Tomycolleaguespastandpresentmanagerial andscientificwithamotto ABSOLUTUM OBSOLETUM –ifitworks,it’soutofdate Preface to first edition This book is about large and complicated systems, such as animals, computers, and economies. Itisinparticularaboutthecontroloftheenterprise,thebrainofthefirm. That is a difficult subject – difficult to think about or to read about, difficult to write about. WhentheWhiteRabbitaskedtheKingwhereheshouldbegin, theKingreplied: ‘Be‐ ginatthebeginningandgoontillyoucometotheend: thenstop.’ Butexplanationis notlikethat. Hisadviceisagoodexampleofthefailuretorecognizewhenoneisup againstalarge,complexsystem. Thisparticularsystembeginswithtwosub‐systems, themselvesalmostunthinkablycomplicated,calledtheauthorandthereader. Itgoes onwiththetopic–thesubjectmatter(alsocomplicated)bywhichalonetheywillbe connected. Itthenseekstoweldthethreesub‐systemsintoameaningfulwhole. That iswhatcommunicationisallabout,anditisnoteasilydone. After a lot of re‐arranging and re‐writing, this book turns out to begin three times – whichiswhyitcomesinthreeparts. Thefirstestablishessometalk. Thesecondsays whatIreallywantedtosay,usingthetalk. Thethird(hopefully)sayswhatthereader really wanted to hear, given that he has already heard what I really wanted to say. It soundscomplicated,becauseitis. ButIhopetheapproachmakesthingseasierrather thanmoredifficult. Incommunicationeverythingdependsonwhatyouendupwith,notonwhatwasactu‐ allysaidorwrittendown. Hereyouaresupposedtoendupwithaninsight,notwithan agglomerationoffacts. Wheneverythingisunderstoodthedetailsceasetomattervery much,orcanbechanged,orcanevenbeabandonedforanotherset. AsWittgenstein saidattheendoftheTractatus,whenyouhaveclimbeduptheladder,youcanthrowit away. Buttheladdermustbethere,andsecure,andtherungsinplace;theclimbitselfmaybe stiff.Myonlyhopeisthattheviewfromthetopisworthwhile.Afterthecommunication isallover,ofcourse,wecanagreetodifferaboutallthestepsontheway. Inparticular,wecanchooseawholenewvocabularyifwelike.Forthemoment,Ihave hadtochooseone,becauseIamstartingthiscommunication.Manywillfinditstrange. Butwordsareonlynames: pleasedonotbeputoffbymynames. Pleasehaveanagree‐ mentwithmeaboutthem.IsayallthisbecauseIfindthatcyberneticsespecially(these arecyberneticwritings)leadspeopletoarguewithfervouraboutnames–forgettingthe 2 3 ideastheyname. Thoughallcommunicationrunsthesamesortofrisk. ThispointiswellcoveredbysuchwritersasWittgenstein. Butitwasbroughthometo memostvividlybyoneofmychildren,Matthew,whenhewasthreeyearsold. Hehad foundtwocoppercoinsinadrawer.‘Daddy,’hecarefullyexplained,‘thesesixpencesare half‐pennies.’ Mysixpencesmaybeyourhalf‐pennies,too. Itdoesnotmatteraslong aswebothknowwhattheywillbuy,becausewhattheywillbuyisalltheyareabout. S.B. Preface to second edition Theoriginaleditionofthisbookwaspublishedin1972. Translationshaveappearedin Danish, French, German, Italian, and Portuguese, and preparations continue for ver‐ sions in another three languages. Meanwhile, however, the original English text has beeninconvenientlyoutofprintsinceearlyin1975.Thereasonwasthatsharpchanges ineditorialpoliciesandpeoplehadoccurredintheoriginalpublishinghouse,where dozensoftitleswereconsequentlyandsuddenlyabandoned.PublicationrightsinBrain werecourteouslyreturnedtome. Bythistime,however,twothingshadhappened. Amassiveapplicationofthiswhole approach to management cybernetics had been undertaken (1971 ‐ 73) in Chile. The eventualoverthrowofPresidentAllende’sadministrationwasastraumaticanexperi‐ enceformeasformanyotherswho,thoughnotbornChileans,hadreasontoidentify themselveswiththenation’ssuffering.YearsweretopassbeforeIfeltabletoreviewall myChileanpapers,andtowriteafullpersonalaccountoftheapplications–anaccount whichnowappearsinanewPart(ChaptersSixteentoTwenty)ofthissecondedition. Secondly,ifsecondarily,Ihadbeenengagedinthewritingoftwootherbooks:Platform forChange,whichJohnWileypublishedin1975,andTheHeartofEnterprise,whichthat samehouseissuedlatein1979. Thelatterwork,however,isthecompanionvolumeto this. ThankstomypublisherandfriendJamesCameronofWiley’s,HeartandBrainare nowavailableincomplementaryeditionsthathavebeenpreparedinparallel. Ihope verymuchthattheirmutualsupportwillreleasesynergisticenergyforthereadersof both. Use of this work is certainly becoming quite widespread. It is helpful to know about applicationsonwhichIhavenotpersonallybeenconsultednorhelda‘watchingbrief’. Thisispartlyforresearchpurposes,butalsobecausepeopleoftenwritetoseewhether theycanbeputintouchwiththoseusingtheapproachintheirownfieldsofmanage‐ mentortypeoforganization. Thefirstpreface,whichyoumayjustnowhaveread,explainedwhytheoriginalbook beganthreetimes, andthereforecamein threeparts (plusanAppendix). The above storyisperhapsalreadysufficienttoexplainwhythebooknowbeginsfourtimes,and comesinfourparts(theoriginalAppendixbecomingPartFive). Therewasofcoursea temptationtorewriteeverything,butthisseemedunfairtothosealreadyfamiliarwith thefirstedition. Inreviewingthattext,Ihavemadeadditions,ratherthanalterations. Thestructureandchapterheadingsremainasbefore. Thefinalproblemaboutthepre‐ 4 5 sentationofthisfresheditionconcernsitstitle. Evenin1972,theapparentlimitation ofthecyberneticsoftheviablesystemto‘thefirm’wastoorestrictive–becauseappli‐ cationstootherkindsofenterprise,andespeciallygovernment,werealreadyintrain. WiththeinclusionofallthenewmaterialinPartFour,thetitleisstrictlyamisnomer. However, it simply does not seem either legitimate or helpful to use a new title for a bookthesubstanceofwhichisalreadyestablished. Onthequestionoftitles, BrainandHeart shallsufficeintheirreferencestoanatomy; thereisnotruthinacolleague’sexpectationthatBigToewouldeventuallybereached. Havingmadethisresolution,Iallowmyselfonefinalreferencetoabodilyorgan–re‐ latingasitdoestothebusinessofmanagerialandministerialinnovation,onwhichthis bookhasmuchtosay. ThefigureofPrometheusispicturedonamedalthatwaspre‐ sentedtomeinSwedenin1958,andthelateEdyVerlander,whowasinchargeofthe event,askedmewhatthisfigureportended. OfcourseIrepliedthatPrometheusstood asasymbolofscience,sincehebroughtdownfirefromheaven.‘No,no’,saidEdy.‘The medalisindeedforinnovators,butthepointaboutPrometheusisthathewaschained toarockandhadhisliverpeckedout.’Ididnotthinkatthetimethathewasexactlyjok‐ ing;butnowIamsurethathewasperfectlyserious. Thereward‐and‐penaltystructure inmanagementheavilydisfavoursinnovation:itisafactwhichdemandsfreshthinking ifourinstitutionsaretosurvive. Meanwhile,IcommendyoutoBrain,anorgantobetreatedwithespecialrespect–even withacertainreverence,sincethesearethebrainsofaplanetaryfuturewithwhichwe deal. Thereisabook,writtenbyJocastaInnes(ReferencesD),which–tojudgebythe frequencywithwhichIconsultit–mustbeofsomeimportance.Shememorablywrites: “brainsneedgentlehandling ortheyareapttodisintegrate.” Amen. S.B. Acknowledgements TothemanyfriendswhoknowthatIknowthattheyhelped,andequallytothosewho suspectthatIdonotknow,myverywarmthanks. Isalutethememoryofthosethreegrandfathersofcybernetics,NorbertWiener,War‐ renMcCulloch,andRossAshby,withmuchaffection. My thanks to those managers in business and industry, government and universities, and in communities too, who have allowed and even encouraged me to develop this theoryoforganizationontheirterritoriesoverthirtyyears. MayIalsopubliclythankmywifeSallieforkeepingbothmeandthetypescriptgoing throughmanyyearsofwritingandthroughtwoeditions–thisbeingtheonlypagethat Itypedmyself. S.B. 6