Introducing Fractal Organisations: How Structure Creates Resilience

Introducing Fractal Organisations: How Structure Creates Resilience

A few years ago, I discovered Patrick Hoverstadt’s work on fractal organisations, which builds on the Viable System Model (VSM) developed by Stafford Beer — a pioneer in management cybernetics.

Beer described cybernetics as “the science of effective organisation” and applied it to everything from businesses to governments. One of our upcoming podcast guests shares a fascinating story about Beer’s involvement in Chile’s government in the 1970s — an experiment that drew international attention and ended in political upheaval.

What Is a Fractal Organisation?

Last week we explored the power of connection. This week we turn to structure — specifically, how organisations can be both resilient and adaptive.

The Viable System Model creates a network of self-contained teams, each with a clear purpose, autonomy, and alignment — while staying in constant communication.

This lattice-like structure enables organisations to respond rapidly to change without becoming brittle, slow, or overly centralised.

Decentralisation Without Chaos

Too often, companies attempt decentralisation without guardrails, which leads to inefficiency and wasted resources.

Fractal organisations solve this by embedding control mechanisms while still allowing for dynamic, responsive decision-making. It is decentralisation with structure — order without rigidity.

In our upcoming Ways of Working podcast, Trevor Hilder explains VSM using a simple but powerful Starbucks analogy, showing how organisations can function more like living systems than machines.

Structure as a Source of Resilience

The strength of fractal organisations lies in their ability to balance autonomy with alignment. Like natural systems, they adapt to pressure while remaining coherent.

In today’s complex world, resilience doesn’t come from centralisation or speed alone — it comes from structures that can hold complexity without breaking.

Kholo’s Perspective: Designing Adaptive Organisations

At Kholo, we help leadership teams apply systems thinking to organisational design. By using principles like the Viable System Model, we support teams to:

• Balance autonomy with shared purpose.
• Build resilience into structure.
• Lead with adaptability and foresight.

This is how organisations can thrive in the future of work.

Conclusion: Can Decentralisation Work Without Chaos?

Fractal organisations show us that the answer is yes. When structure is designed thoughtfully, organisations can be both decentralised and resilient.

At Kholo, we help leaders design adaptive organisations that grow like living systems. Book a call with Kholo.

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