Contributions to Requisite Organization Theory

Speaker A If you could go back to that one of your contributions to Elliot thinking where he took a concept and put it together. There were several elements. There are several elements of, of requisite organization that I have found difficult to teach, difficult to explain, and difficult to translate into practice. The first and probably most fundamental, and about which Elliot and I had days and days of violent arguments, was the nature of accountability. Elliot would often say a manager is accountable for subordinate output. And so I would ask, well, does that mean that the subordinate is not accountable for his output? And he would go back and forth and back and forth. Because I would always add, Elliot, you say you can't have two people accountable for the same thing. And he would say, and I think correctly eventually, that a subordinate can only be accountable for delivering on output, no surprises. That if conditions change that make it impossible for a subordinate to achieve that Qqtr, then he must go back, but the manager is the one who must decide whether or not to change it. And in that manner the manager is accountable for the output as a whole. The subordinate is accountable for completing the output, no surprises. And I found that very unsatisfying. I then was greatly troubled by his going back and forth on well, what do we hold people accountable for the outputs or effectiveness? And he would say, well, can't really compensate people based on outputs because those can always be renegotiated. It's got to be effectiveness. Went back and forth. It took me about five years from the time that Ellie and I sort of parted company in 1994 until the late 90s, before I was able to take his language for what an employee was accountable for and say there's really two components. One is a fixed component, things you can measure outputs throughputs, adherence to policy, adherence to regulation. The other are things you can't measure. And that has to do with effectiveness. And effectiveness involves a subjective judgment on the part of managers about the aggregate value an employee is creating. And since effectiveness can't be measured, it can only be judged, but it has to be judged relative to the level of complexity of the role. So in the late ninety s and through 2001, I began to teach accountability has a dual nature fixed accountabilities, relative accountabilities. It wasn't until about four months after my book was published that I finally realized fixed accountabilities are all about keeping your word, no surprises. And the relative accountabilities effectiveness are all about earning your keep. Well, since I had that insight, training managers at any level of the organization, from frontline shop supervisors with a high school education, or barely a high school education, to Fortune 500 CEOs, the whole notion that accountability is not a single thing, but it's about both keeping your word, no surprises, and earning your keep. I've been able to cut through so much of the mythology and so much of the dysfunction that most organizations have when they try to implement accountability. So that for me, it may seem obvious once you say it, that in any human enterprise, if someone gives his word, he ought to keep his word. And that in an employment organization, when one is given a role of a certain weight, that that person has to earn his keep. That, that was my first breakthrough and understanding the second, which I would say is still I'm still on the cutting edge of evolving, was trying to help my clients deal with what Elliot called tiers and tires. Tires are what managers do with their subordinates. They assign things. So tires are task assigning role relationships and tiers, which he called task initiating role relationships. He had six different items, and he and I used to debate for hours on end about what the tiers were really about. And some of the last discussions we had prior to our divorce was that advising was really about informing people, monitoring and coordinating was really around persuading people, auditing was really around instructing people. And in the ten years since I stopped working with Elliot, we've recast that whole notion into direct and indirect accountabilities. And we've developed a model for taking a group through any critical process and dealing with the direct and indirect accountabilities. And I would say we're about 85% there. But the concept now is much more readily taught and understood than with tears and tariffs. Most of my colleagues who have moved into the field of records organization tell me they have a great deal of trouble with their clients trying to get the tears and tires. I feel that that's another area in which I've been able to take the intention that Elliot had further refine it. But those people who've worked with Elliot all say the same thing, that these clashes of the mind around debating ideas and clarifying and refining ideas are just they are among the most stimulating intellectual exercises anyone could ever have. He was a brilliant man with a great mind and unrelenting passion about bringing clarity into everything and anything he studied. I'm often asked by people what my role relationship with Elliot was like. Not just my human relationship, and I liken it to Elliot being a physicist and I'm an engineer, and he's discerned a number of fundamental laws of physics and began to describe and have prototypes of the engineering applications. I think my expertise has been in a much more rigorous and pragmatic engineering of those principles into methods and practices. So in addition to sharpening the concepts of accountability and direct and indirect types of accountabilities, the whole notion of stewarding systems, we've taken the array of leadership practices that Elliot probably best describes in Executive Leadership that he wrote with Steve Clement. And we've made them a discipline of communication and developed very effective models for people to understand the discipline, to practice it, to rehearse it, to embed it in their day to day leadership practices. Setting context, I believe, is the single most valuable source of leverage that a manager has. And I believe some of our enormous success with clients in helping them to become successful has been in bringing in a sustainable methodology for setting context, getting ambitious, but achievable. Qqtr is defined staying on top of that, bringing in some of the knowledge and the practices that Harry Levinson had worked out around behaviorally anchored feedback and a much more rigorous approach to coaching and mentoring than Elliot had described. I found, as I talked with Elliot about what he had done at CRA Mining and other places, he would essentially throw out the idea, but leave it to each organization to develop their own modes of teaching it, their own modes of implementing it. And when I would speak with people from those companies, essentially it was abandoned. If you don't provide people the scaffolding with which to hold the walls up, they crumble very quickly. So we've been quite diligent in developing ways of teaching what we call accountability leadership that start from a very different premise. Elliot would build the model as a physicist for his audience, and he would start with some basic premises and work inward. What I learned observing Elliot as a teacher is that he would lose half of the audience right off the bat, and then the other half that would stay with him when they would ask questions that reflected their lack of understanding really what he had said, he would get angry with them. And it caused me to realize that because he developed this knowledge, he had very little conception of the difficulty taking people from an existing mindset and frame of view of the world into his. And so our teaching involves a great deal of exercises and videos to help people surface their assumptions and begin to understand the difference between responsibility and accountability, to help them understand the difference between keeping your word and earning your keep the different kinds of consequences. So I think that we've done an excellent job in finding ways to first give people good knowledge at many different levels. And in our faculty, typically I will work with the most senior levels. And then we've got people who are very good at the level four and three level, and then we've got folks that are very good at the level three, level two level. And some of our clients in the late 90s were so committed to this that they asked us to develop a train, the trainer methodology, certifying instructors within their own company. And we hired a world class instructional designer and spent four or five months. And so we've now caused to be trained tens of thousands of people. And we have personally trained twenty s and thirty s of thousands of people in this. So I think that the first thing is that we've been able to make the concepts much more accessible, much more practical, much more understandable, and to make the actual practices a more practical thing to implement. The next area in which I think Elliot left people to their own devices without a lot of satisfying is the basis for effectiveness appraisal. He called it personal effectiveness appraisal. We refer to it as Demonstrated Effectiveness appraisal. And this came about after ten years of very empirical attempts to give managers a framework and give them a methodology with which to articulate their perception about people's effectiveness and to make sure that the different components that go into effectiveness are described in a similar way by all managers about all of their people. And the basic construct that we've ended up with in the last three or four years has just been very powerful and has caused our clients to have enough confidence in the effectiveness appraisal process that they're beginning to use it as the basis for differential compensation. And the whole notion of tying pay to outputs is gradually dying down in our organization. As long as people keep their word, no surprises. So I would say that's another area it's bringing in as straightforward a methodology in the evaluation of effectiveness, which is inherently subjective, as Elliot had already developed about the evaluation of potential, which, although it's subjective, it's around a physical entity, someone's mental process. The final area in which I believe we've made great progress has been in the development of software. I was very intrigued with the software that Elliot and Catherine and her son had developed in the late 80s. But it really, while it was an interesting way to view information, was not very practical, didn't allow an organization to use it to effectively and richly manage their pipelines of potential. And in maybe 1992, I began working with Elliot and Catherine to set out the specifications of a richer and more robust software application, which was beginning to reflect the ways I had working with Elliot, improved with post it notes and wall charts, our client's ability to assess potential and effectiveness. And as I began to describe the requirements of the software, catherine's son started a second effort. And I was pleased to note that on their flash screen, they gave me credit for the contribution of a number of those. But it was around the mid 1994 that my relationship with Elliot and Catherine was beginning to suffer, and it was clear that we were not going to be able to work together on the software. And I began with one of my clients, my first effort to build software, because the software wonks need acronyms, they like three letter words. And at that point, we were calling our methodology Essential Organization, so we called the software Leo Levinson Essential Organization, and we began to work with the client. They invested over a million dollars in developing the software, and it was with a firm that really was not doing its homework well. And so all of that money went down the drain. But it taught me a lot. So, beginning about six years ago, I began to work with David Jackson, who was an It director in that same company, who had left the company and started to moonlight for me to begin to develop, at least as a consultancy tool, if not an HR It tool, the software. And that's just gradually become more and more robust. We've used it with 25 or 30 clients. It is a curious thing because it's still in sort of beta format. We've never charged for it, and the net effective is we're able to do the work in half the time, so we charge less and the client gets a much better product. But what began happening about three years ago is our client said we want that software ourselves to manage our pool of talent. And so we began with some of our clients money to build a manager interface for it. And it's been sort of patched together. We're now working on a third generation of what I think will be the be all and the end all, and we're planning to build it as a product, and we think that we would license it to the other practitioners of this. And it's one that will assist in all aspects of diagnosing an organization, designing it, building from the processes, up and functions and levels, and all of the talent management, including tracking, accountabilities and context. These are some of the ways in which I believe we've engineered the physics of requisite organization as Elliot Jackson developed it. Now, that leads to just a general discussion of what has it been like to transform an organization built in Harry Levinson's model. It was approximately 22 years old when I took it over, and we've gone another 16 years. And at the time, it was probably just past its prime as the preeminent leadership development firm, providing leadership seminars to enhance the personal leadership effectiveness of managers and executives. I would say during the early to late 80s, it was at its prime. It was just without parallel. And over the course of the nearly 40 years now, we've trained over 40,000 managers and executives in that particular approach to leadership. And all of the consultants and faculty that he acquired were either PhD psychologists or psychiatrists, because the model had faculty teaching concepts that were essentially modified clinical concepts and then running small groups where each participant would present a case. So entered Cranus in 1990 to begin to transform the Levinson Institute, admittedly for the first three or four years with a very naive view of what requisite organization was about, and as a matter of fact, a very naive view about business. I knew nothing about business before working with Elliot, and I tried unsuccessfully for the first five years to convert our clinical staff into becoming organizational consultants. An organizational consultant applying west methodology when hearing about a problem will begin with the question, well, who's accountable for what? A Levinson Institute clinical consultant would start with the question, how does that make you feel? And there was just no meeting of the minds. Ken Shepard up in Canada had put together a number of seminars with Elliot Jacks that was pure Elliot Jacks, and I paid to bring up a half a dozen or more of my staff and they enjoyed the time. But I don't believe any one of them has really solidly understood the whole notion. Which is not to say they aren't tremendous in their work as executive coaches and people doing assessments, but what I discovered over time is I was not going to be able to develop a pool of consultants from that group. And as it happened, my subsequent consultants all came from clients that we worked with. And so whenever we would work with a client for two or three years implementing what Elliot would call a requisite project, at the end of that time, one out of three times the project lead within the client would ask their owner if they could start moonlighting for us or even start to work for us. And so essentially, all of our organizational consulting, all of our accountability leadership training faculty are people that have come from being our clients. Now, that hasn't been too much of a problem because and this relates to a long standing discussion elliot and I would have on these long flights back and forth from the States to Argentina, it was his belief that no consultancy firm could build on a McKinsey like model and apply these concepts. The McKinsey like model being you have a fairly routinized strategic planning process with 25 young MBAs and get them all crunching numbers on a spreadsheet and you can charge a great deal of money. The work, and I believe he is correct, the work is largely, at least the first quarter of the work, high level individual contributor work to assess the key problems of an organization in requisite terms and to begin the diagnostic process leading to the organizational modeling process. And so, because we've not really had many more clients than we could handle, just enough to keep me a little too busy, we've never really had the need to develop a large stable of organizational consultants. The problem has been that the organizational consulting work that has come to the Levinson Institute over the last 15 years has by and large come from people who have attended our seminars. And as I have spent far less time than Harry Levinson trying to build and sustain our seminar enrollment, so has the number of people coming to the seminars diminished, and so has the frequency with which people have been asking to have major organization.