Organisation | People
View all articles
SUBSCRIBE TO NEWSLETTER to get articles and more
A hierarchy required by nature
David Hodes, Founder
When I was in Year 3, I won a book prize for topping my class. The book,
called How Things Work, had pictures of steam engines, telephone
exchanges and aeroplanes; motor cars, power stations and printing
presses. It fired my imagination and curiosity for how things work, which
has never diminished.
Technical systems, like the ones described above, can be understood
through the laws of physics and the axioms of mathematics. Social systems
are another matter. Each of us is far more complex individually than any
machine, and when you put us together in an organisation to accomplish a
common goal, that complexity increases exponentially.
So, what means do we have at our disposal to understand how these
complex organisations work? How do we get beyond the clichés of purely
behavioural approaches to the challenges of managerial leadership and
come to an understanding of what separates the great from the good and
the indifferent from the failures?
Before we do, let me confess that when I first discovered the Theory of
Constraints (TOC), fairly early on in my work career, it had immense appeal
to my natural proclivities and the training I’d had in mechanical engineering.
The ‘inherent simplicity’ Goldratt had discovered fitted in very well with my
worldview, and I thought it simply a matter of time before everyone was
doing their work using a constraint-based paradigm. I even left my secure
job to start a consultancy in TOC as I didn’t want to miss the boat. More
than two decades later, I have some better-formed ideas about why it is so
difficult to bring this new way of working into the world, based on the
principles of systems thinking.
What helped me on that journey of understanding was the work of Elliott
Jaques, a pioneer in the field of Stratified Systems Theory and author of the
seminal book Requisite Organisation. Jaques was born in Toronto in 1917
and died in 2003. He studied medicine and psychoanalysis. Through his
work, which analysed tens of thousands of positions in a wide diversity of
organisations, he empirically established a strong correlation between
mental processing ability (cognitive capacity), time horizon of work and
complexity.
“Different levels of work have as different a nature in terms of
modes of thinking as, by analogy, water is different to steam”
Jaques made the point that there are strata of work in any substantial
organisation, and that these strata are ‘as required by nature’. Thus, the
requisite organisation is not seen as being optional, but rather, as he puts it,
there are only requisite organisations and degrees of variance from the
requisite order:
Misconceptions lead to inept people systems, which produce
unfortunate behaviours, which lead to one-sided, negativistic view of
people at work, which leads to new inept people system fads, which
produce unfortunate behaviours, which…
He maintained that rather than the traditional 4D world of human life—
three spatial and one time-based, there were in fact three spatial and two
time dimensions. There is Chronos, which we are all familiar with as time
measured by a clock. But there is also Kairos (also from the Greek), the axis
perpendicular to the Chronos axis in the diagram below. At any given point
in time, Kairos is informed by the memory of the past, perception of the
present and intention for the future.
Cognitive ability is that quality of mind which defines the outer limit of the
horizon of intention. That is, not some vague notion about a future vision,
but the actual mental processing ability to apprehend the future,
understand the complexity associated with bringing it into being and having
the wherewithal to exercise judgement and discretion in overcoming
obstacles on the way to that horizon.
Jaques discovered through his vast research that different levels of work
have as different a nature in terms of modes of thinking as, by analogy,
water is different to steam. He found that the time horizons of the levels of
work were remarkably consistent—regardless of the specifics of the
industry or organisation within it.
These levels of work, he called modes, and they break down as follows:
Mode 1 – 1 day to 3 months
Mode 2 – 3 months to 1 year
Mode 3 – 1 year to 2 years
Mode 4 – 2 years to five years
Mode 5 – 5 years to ten years
Mode 6 – 10 years to 20 years
Mode 7 – 20 years to 50 years
(For Mode 8 and beyond we’re talking about ideas that change the world,
such as those of Galileo’s and Einstein’s, or Gandhi’s and Martin Luther
King’s, which go beyond the realm of organisations.)
Interestingly, the cognitive classes of the strata repeat in a fractal way.
Mode 1 is the frontline worker, Mode 2 the supervisor, Mode 3 the
manager and Mode 4 the executive. So for the frontline worker at Mode 1,
the object of the work is completion of the task at hand. At Mode 2, the
work is supervising the tasks at Mode 1. And so on. At Mode 5 things start
to repeat where, for the CEO of the strategic business unit, the object of
the work is
everything
contained within
that business unit.
And the Group CEO
at Mode 6 is
accountable for the
superordinate
organisation
comprised of
multiple strategic
business units. This
stratified systems
view is analogous to
music where each
note of a scale
repeats at the
octave. And in fact
Jaques call the
repetition of these
four fundamental
cognitive classes
‘quadraves’.
The work at the level of Modes 3, 4, 5 and 6 is as follows. Someone
operating at Mode 3 will be running and improving an extant system of
management. It’s what the Japanese Lean practitioners call kaizen—‘change
for better’, or continuous improvement. Mode 4, however, is distinguished
by the fact that the work involves the design of entirely new systems of
managerial leadership—what the Japanese call kaikaku, ‘radical change’, or
transformation. When operating at Mode 4, you are working on a
hypothesis of what the future might be, two-to-five years from now, and
reckoning on all that is necessary and sufficient to bring that future into
being. Mode 5 would be asking strategic questions about new lines of
business, geographies and markets. Mode 6 might be charged with fulfilling
the intention to establish a worldwide chain of businesses, organised in
regions within every continent.
“As long as the person acts within the socially accepted
bounds of temperament, effectiveness is more important
than likeability.”
There’s no getting away from the fact that most organisations have too
many levels, and some have strata missing. No organisation can ascend
beyond the level of work practised by the most senior person in the
organisation. If that senior-most person cannot operate at the level
required by the role, it will cause compression in the roles below, with
competent people frustrated that they cannot be effective in exercising
their discretion and judgement suited to their capability. Alternately, if a
managerial leader occupies a role which is too big for him or her, then they
will feel stressed, ineffective and unworthy of the trust placed in them
when they took on the role in the first place. If a person is in the right-sized
role for their cognitive ability, they operate in flow and have the
opportunity to get great joy and reward from their work.
Having the right person in a role is thus not merely a function of their
experience, knowledge or affability. One doesn’t have to be agreeable to be
a fine managerial leader. As long as the person acts within the socially
accepted bounds of temperament, effectiveness is more important than
likeability.
What Jaques’s work promotes is the idea that in any managerial
accountability hierarchy, success is predicated on there being a tight fit
between accountability for getting the job done and authority over the
resources required to do so. Understanding the nature of levels of work
means there is a much richer set of conditions to overcome the all too
frequent mismatch of accountability and authority.
In discovering the work of Jaques I felt I’d finally been given the key to
understanding how organisational hierarchies work and how they can be
designed to work better. It’s like being given a pair of X-ray specs to look at
the organisation’s skeletal structure and noticing whether or not it is
‘requisite’. So often, in the early days of my enthusiasm for TOC I would
hear vacuous statements such as ‘you have to have buy-in from the top’, or
even more perniciously that hierarchy was in and of itself not a good thing
and that the organisation should be ‘flat’. I now know that without a solid
understanding of the pioneering work of Jaques I would always be running
blind, dependent on dumb luck for results. A Requisite Organisation is a
necessary condition of reliably and sustainably unleashing the power and
promise of systems thinking.
____________________________
What’s next?
The change from standard thinking to Theory of Constraints (TOC) is both
profound and exhilarating. To make it both fun and memorable, we use a
business simulation we call The Right Stuff Workshop.
We’d love to run it with you. To learn more:
download the brochure (no email required)
schedule a call
____________________________
[Background photo by Bernard
Hermant on Unsplash]
“In a hierarchy, every employee tends to rise
to his level of incompetence”—Laurence J. Peter
0
