Here is a state-space system corresponding to a DC motor model:
This system is observable and controllable:
Extract a subsystem with the two first outputs only (ignore the angular position output):
This subsystem still has 3 states, but one of them is not observable anymore:
Reduce this subsystem to remove the structural unobservable state:
Optionally, the indices of the states of the reduced system can be obtained along with the reduced system:
The resulting system has two states and is now controllable and observable: