Leadership, structure and people: What it takes to be a requisite organisation

Requisite Organisation (RO) is the name given to a holistic body of work that offers proven principles and practices around how organisations should be designed and operated, based on building and maintaining strong relationships aimed at achieving goal directed outcomes.

The following three strands and their specific characteristics constitute a requisite organistaion:

RO, also referred to as scientific management, was pioneered by Dr Elliott Jaques and developed into an integrated set of models, tested principles and global applications across different industries over a period spanning more than fifty years.

RO comprises three integrated facets: Structure, People and Leadership and has documented applications globally, across industries such as Defence, Telecommunications, Mining, Energy,
Construction, Health, Government, Financial Services, Hospitality and Religious Organisations.

This article will largely focus on the first strand – that unpopular but necessary topic of hierarchy and using levels of work complexity, the vertical axis of organisational design. Hierarchy remains the most efficient way of structuring an enterprise, if its basic principles are understood. It is not about power or prestige, but about adding value.

Some theory – The growth of organisational complexity

Organisations are complex adaptive systems and evolve by creating, adding, modifying or discarding pieces on their journey. New levels of work emerge to meet demands generated by higher level of contextual complexity, which may be self-directed or environmentally imposed. Organisations continually shape shift in response to their environments.

The Nobel Prize winner, Ilya Prigogine’s work showed that any system, in response to increasing energy, would eventually implode (fail) or transform to something new at a higher level of complexity. Ashby’s Law of Requisite Variety states that internal complexity must match internal conditions and no perfect state is ever reached or reached for long.

This messy, unpredictable and stressful process of transition offers no guarantee of success. Failure is all too common, but when successful, a new order emerges and a new level of work complexity is created; the organisation moves into a new state of existence.

Successful organisations become more complex over time. Nature abhors scarcity and equilibrium, loving abundance (growth), seeming chaos and simplicity of design.

Levels of work complexity

RO states that in order for an organisation to be successful it needs to have clearly separated Levels of Work Complexity, with each theme performing unique functions:

The Added Value Domain is where operational efficiency, productivity and expertise are critical. It is where most businesses operate and is focused on achieving outputs in the most cost effective manner, providing efficient services and being able to respond or initiate quickly.
Work is about serving a known client base with known products and services and asking if the systems, processes and procedures are still doing what they should be doing and if it is possible to do them more effectively.

Here, pride in the work, its quality and delighting customers and guests is important as it holds reputation, brand and image.

The second “work chunk” is the Innovative Domain and is the executive levels of management. Here strategic direction is set and frameworks created to take the organisation forward over a time span from three to ten years. This domain is responsible for stakeholder and shareholder relationship management, the forging of joint ventures, new products, services and innovative ideas. This is the top end of an independent company or division within a large group. There are two work levels found within this domain.

The third domain is concerned with the management of multinational and global enterprises and has two work levels. The Values Domain is about shaping business units within their individual contexts, sensing changing values, nascent trends and patterns and making them tangible and real to stakeholders and shaping institutions that are able to interact with these new forces.

Changes at these levels are across boundaries and cultures and deals with multiple and diverse unified whole systems. The impact of decisions made at this level may not be felt for 50 years.

Descriptors of work level

Work Level I or Quality is defined as using skills and training to produce an output that is largely prescribed, tangible, measurable and meets a specific need, within a specified time. This work is critical because it ensures the organisation’s viability and represents the first point of contact with the public and needs great care and attention.

Pride in work is hugely important, as is the understanding of products, the value of the company and being embodiments thereof. This Level of Work involves managing oneself or an immediate team on a day-to-day basis.

Roles in this work level would include team leader or supervisor. Work is in the now, with short time spans.

Work Level II or Service work is the application of knowledge and experience to a particular situation or issue. This includes ensuring availability of resources, dealing with and resolving issues so that image and reputation of the organisation is enhanced. This would all take place within the prescribed boundaries and available resources. The concern remains to ensure Quality outputs when managing a permanent team or being a specialist.

Roles in this work level include the first level of full-authorised line managers. Such roles are accountable for task assignments of the team; use of resources and equipment, setting an annual budget, ensuring adequate team members and approving expenditure. It is also the first level where we find specialists and professional services (accountants, doctors, scientists).

Work Level III or Practice is the work theme of senior management and is concerned with the co-ordination, integration, planning and management of people and resources in order to achieve specified outputs in an optimal manner. The issues of systems of work becomes a unique value add at this level.

Roles in this work level include managers who meet, liaise and co-ordinate their work with that of other managers at regular management meetings. The span of decision-making may be at a maximum of two years.

The two executive work levels – Strategic Development (Work Level IV) which translates the strategic intent of an organisation into business plans, performance and operational objectives, manages continuity and change and Strategic Intent (Work Level V), which sets direction and is accountable for viability, establishes governance and regulatory frameworks – are held in a state of dynamic tension. This is where GMs are found (Level IV) and CEOs or MDs of a division of a multinational or international.

Jacques’s research and that of others shows that over time an individual’s capability unfolds at a predictable rate and generates the need for different and larger work challenges as our way of processing information changes. This deep organic need to seek new challenges is often unnamed, but it is a call to adventure that cannot be ignored.

As our capability for decision-making unfolds so our need for challenges increase. In response we seek different roles (paid or unpaid) with greater complexity. This rate of change differs from individual to individual, but all take place within seven Growth Modes. Depending on our Growth Curve we move through different transition points at different ages, entering and growing into new levels of cognitive complexity (our ability to handle ambiguity and uncertainty in exercising judgement when we do not and cannot know the details) and thus work themes or levels.

Entry and exit transition points from each cycle can be traumatic, if we are finding ourselves underutilised. If we are in flow, meaning we are appropriately challenged and enjoying what we are doing, we hardly notice this transition. Sadly, too often this is not the case. The challenge is finding the right roles at the right time. If we do not we become underutilised (not using our given capabilities to the full) or overextended (the work challenges take us out of flow and make us uncomfortable).

“Flow” is a sought after state when we are really connected with our work challenges (paid or unpaid) and find life is fun, stimulating, meaningful and often reflects periods we look back at with fondness. We often tend to forget ourselves during such periods as time and work and fun become one.

This is illustrated in Figure below, the “Flow” graphic below used in the management of Talent Pools: Organisations often map the capability of their talent pools to meet current and future organisational needs. The key reason for this is to ensure availability and “flow” between tasks and those with the need for the challenge.

However while this capability for dealing with complexity is essential it is not the full picture – employees also need to have the knowledge, skills and experience to deal with the specific role. They should value the work (want to do it) and have wisdom (or EQ) to do it in such as a way as to cause no harm.

The importance of managerial leadership

Requisite Organisation has, through its research and observations, identified a number of core managerial leadership competencies that need to be used in daily and longer-term practices. Many of these practices are aimed at building trust and fairness. RO is formal and clear in the use of how to design a business from the ground up, including structure, role types and authority and accountably mapping to role type; as well as the minimum necessary managerial authorities and in effective tasking.

The Requisite Leadership competencies are regarded as basic essential skills for all who lead a team. All managerial leaders need training to understand the basic competencies and practices needed to be an effective managerial leader. Some examples of these core competencies are:

In conclusion a requisite organisation means doing business with efficiency and competitiveness and the release of human creativity (Jaques, Requisite Organisation, 1992).