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Speaker A At this point. On one hand we could approach the founder entrepreneur's work or on the other we could start to end analyze the kind of organization which arises which appears. We're going to try to move along both of these paths simultaneously, which is what we normally would do as business consultants in our attempt to help stabilize and develop these organizations. Let's take a look at this diagram that will help us to understand first of all, how the mind of people who have created the business work. This will allow us to understand what Jax defined as a confusing task, that is the owner's task, which is something which is not really studied too much in the theoretical world, but which undoubtedly is something that the requisite organization can help us with very much. Let's recall the applied current capability, function and the three elements that comprise it. These are the complexity of mental processing, the value and commitment to the task and one's skilled knowledge. To start, let's focus on the appreciation and the commitment to one's work. This kind of founder businessman has a deep commitment towards the various tasks he undertakes which we have chosen to call operative work. And the truth is that all the knowledge and know how regarding that we have called substantive technology is not enough to assure the development of, and much less the stabilization of the organization and enterprise these gentlemen have built. It is for this reason that their skills and know how in the field of substantive technology are the bedrock upon which they have founded their undertaking. But it is the development of other dimensions of this difficult role, as Jax would call it, that will allow the owner founder businessman to create the organization that will accompany his entrepreneurial vision. Every owner founder has somewhere in his mind what we have called the four dimensions of the founder owner role. One of these four dimensions, as we can see in the chart, is the one that has to do with substantive technology, that is a manufacturing or the lending of a service. The teaching of information management, medicine, building houses, making food stuffs. All of these make up one of the four dimensions. The second dimension is the commercial and contextualized one which establishes a relationship between the object and the external world. The third dimension is the administrative, economic and financial one. This one relates to the use of technological, physical, human, material and intangible resources which assure the operation of the undertaking which will take place. And finally we have the fourth dimension which is the one that refers to organization, coordination, motivation and leadership. It is precisely here in this fourth dimension that all the strategy, system theory and requisite organization concepts come to the aid of the work that the entrepreneur must slowly learn to do before going on with the question of the development of these specific skills and trying to understand the appreciation that the founder has of these different tasks. Let's take a second to think about the context in which all of this is happening. I believe I mentioned that in its early stages this organization is highly oral. As a result of our work with entrepreneur time, we've developed a conceptual scheme that allows us to see the possible evolution that an organization might have not from the point of view of its levels, but rather seen from the angle of how the work is organized. Working with the founder businessman has led us to observe that the concept of post or position or as we say in Spanish, the role concept is not intrinsically part of the businessman's conception of work. This is possibly because he is continuously sliding along from the manager's post to the more operative positions and is permanently traveling through the four dimensions we were looking at before. This concept of does not exist as a criteria which means that at the beginning of an enterprise what we find is an organization structured along people, not upon tasks or functions. And at the same time it is based very much on oral commands, on spoken commands that are permanently repeated throughout time, even those of a repetitive nature. Once and again, as the days, weeks, months and even years go by the same orders are given and perhaps even to the same people. This amounts to an enormous expenditure of energy. And this evolutionary period is what we call prehistoric. Why prehistoric? Because of the idea that history began when things started to get written down. So the first quadrant is in an organization based on people who have a highly oral culture where there are no written records. Not only are we referring to daily orders, financial and administrative instruments are also scarce. Something that has turned out to be rather surprising due to the organizing impact it has had has been that as part of our consulting work we have insisted company owners put down their orders in black and white. This written record has additionally benefit from the way we have organized our work as consultants. Basically, it gets organized around a weekly meeting which lasts an hour or an hour and a half. This time organization for somebody like the businessman who is constantly changing his functions, who in the same day will carry out a series of different tasks. He goes up a level, he comes down a level. This produces a certain organizing effect in his mind. When this is added to the proposal that he write things down including those things that we will later go over at our scheduled weekly meetings. The writing becomes, at least in an external relationship such as the one that he has with the consultant, one of the means for taking on the task at hand. This is then how and why each businessman starts keeping a record of some of his daily tasks. And it's really amazing to see how the rest of the organization automatically and quite easily, in fact falls right in line behind him and starts putting things down in black and white too as soon as they see him doing it. Somehow this opens the door and allows culture and work to start sliding along what we call the y axis which is where we find management tools like forms to fill in for perhaps day to day company information. And this is where we find things sliding along from an oral culture into a written one and so end up with the possibility of developing procedures that generally our entrepreneurs have in the substantive technology fields but do not have for daily management. So, as a result, written results start becoming the norm for everyday affairs which allows information to be accessed even if the person in question is not available. Additionally, as the organization grows and as a byproduct of this basic weekly organization a new possibility arises that of the boss himself beginning to discriminate in his diary at least another central element in consulting work what part of his time he will dedicate to the commercial sectors, what part to manufacturing, what part to administration. And as the weeks begin to repeat themselves so does the owner's vision of himself working in different functions. In this way, as time goes by the entrepreneurial organization will be able to start sliding along the X axis which we call the basis for organizing work and will then move on into the following quadrant. This implies being organized according to these functions or positions or roles while simultaneously moving further up along the y axis. We will then have these four quadrants where we'll find an organization based on people but which has evolved in the use of written records and is already at the halfway mark of its possible evolution and has developed according to the idea of functions. Finally, it'll end up in the highest segment of its evolution. And we'll discover that we have a small organization which in terms of its work organization might even be comparable to the large organization as a result of having procedures, routines and knowledge recorded independently of the knowledge accumulated in its people. Thus, we will have advanced to the highest degree of evolution in the area of executive organization. Although it does not appear in our chart based on our experience it is difficult to imagine that somebody could slide along the x axis and advance to a point where his organization would be structured according to roles and positions while at the same time maintaining a low degree of writing. Actually, the quadrant representing a low degree of evolution is practically non existent. Precisely this month, the academic field will be testing a tool that we've been working on based on a survey in the area of Rosario conducted with 40 companies none of which have worked with our consulting agency. Rosadio is a midsized Argentine city that has allowed us to verify that companies can in fact be classified this way. Besides, something interesting which has also come up in relation to the evolution of company organization is that even if these companies remain small scale, as they attain a higher degree of written organization and have more tool for management and information analysis at their disposal, they can get ISO certifications using their very economic procedures. This gives them more stability and allows them to move on to longer life expectancy models without making large modifications or introducing other levels of management. It goes without saying then, that the possibility of evolution clears the way for the transition which, if and when the moment for growth occurs, will allow us to introduce a new tier between the founder owner of this tutor organization and its daily operations. But for this qualitative jump to take place, it is fundamental to understand the role the founder's current applied capacity plays, given the fact that it is divided up among many different types of work. Here we have another chart in which we see what happens as the organization begins to develop horizontally and the owner founder starts to carry out the four types of work that we mentioned earlier. To begin with, the appreciation the individual has for these different kinds of work varies according to the stage of development the business has reached and the stage of life the owner is at. So it's logical that these individuals should have a certain appreciation for the substantive technology dimension at the beginning of the process, which you can see here on the y axis. This appreciation, which varies if it is applied to administrative, economic and financial work, or if it's applied to commercial work and contextual analysis, and is different once again for work related to questions of leadership, organization or motivation. If we put these four types of work on the y axis, we'll observe how they are appreciated, how much they know, and what their specific skills and experiences are in relation to each axis and in relation also to each specific dimension in which they must do their work. We will realize too, according to the different positions or roles they occupy within their two tier organization, if they're working at a higher or lower level of capacity as a result of their appreciation, their knowledge, their skills and their experiences. With the aid of this chart, we can orient the CEO's training program either in conjunction with the consulting agency to work on the development of a specific organization related dimension or with other external training work focused specifically on the other axis. The intention behind all this is to help the company founder keep moving upwards along his current potential capacity axis, so that his current applied capacity never falls below his current potential capacity. Experience indicates that this chart should be updated every six months during the organization's early years and can then be followed up on a yearly basis with clarity and in cooperation with the businessman. This procedure assures that his training program will be designed to cover all the different aspects of his original tasks. Now, as the founder develops his skills and moves up from his applied current capacity to his potential current capacity, the organization will be able to grow taking horizontal steps without the need of adding another level. Allow me to draw this on the diagram we saw previously. This is perhaps one of the most important contributions the Requisite organization can provide in relation to the organization's design. Let's consider for a second the fact that to the owner founder's eyes the organization is invisible. He tends to imagine the organization in terms of people. So inasmuch as he no longer has sufficient time to look after a sector in growth, be it manufacturing or the provision of some product, for example, he would naturally tend to create a level that would be defined by the person with greatest capacity in that field and this would take his organization to a third level. It's interesting to note that using a trick, foreseen and theoretical work, I'm referring to the creation of a new position, that of a direct assistant to the general manager. We can avoid the creation of this level and we continue within a two tier scheme. This allows the businessman to see his product directly and to find support for his work in the figure of this assistant which we have created without having to add a new level. This may seem to be extremely easy and in fact in organizational terms it is. But it's amazing how fast small organizations quickly add more levels instead of creating positions like the one we have invented here. The creation of more levels is something which only makes the enterprise's organization weaker. The Work and transition analysis chart for the founder businessman that we were just looking at along with the work done to assure the evolution of the executive organization and finally the analysis of potential. These are the elements that will allow us to assist the businessman through time in the creation of one of the three legs on which any company stands. These are strategy, company culture and structure. It is precisely in this field of generating an organization that the Requisite organization helps the founder businessman and provides his enterprise with stability and possibly growth. This is something which needs to be deeply understood. When one changes a person's work, one is changing the organization of the work. But it is the nature of such a businessman that people should have multitasking skills, something which is difficult to learn in one of the organizations which usually are considered to be top notch in areas related to managerial accountability. Let's look at this transition from a two tier to a three tier organization. On this graph, consider the fact that we have been working on the original two tier entrepreneurial organization. As you can see on the chart, by developing skills, understanding value of different kinds of work, analyzing the complexity of the entrepreneur's thought processes while simultaneously stimulating the evolution of the executive organization. All this will now allow us to lay the groundwork needed to pull off the transition from a two tier organization to a functionally organized one that will accept the introduction of another level situated somewhere between the founder and the operation. As we can see on the chart, the assistance that we originally designed when the organization was a two tier one will now be available as the first professional managers for the new organization which until now had accepted the fact that the owner founder was the sole person in charge of delegating work to his subordinates. So, along with the evolution of both the Empress Ario's skills and the company's executive organization, we find that the social group as a whole will have generated enough faith in itself so as to permit a first degree of delegation simultaneously. We must make sure that the work also grows looking not only inwards, but at the external competition too. Thus, people are seen as a group and the different organizational functions appear, leading to the transition movement and the generation of the first management group. This set of people has a distinct identity which is independent from that of the company's original founder. So the organization of tasks and the work can now appear as the first stage of evolution in the two tier company. It is precisely at this moment that we must go back and work with the entrepreneur so that he can now visualize the supra organizational spaces. This means the one belonging to the governing body, the one reserved for the association and perhaps the shareholders one also. Let's now move on to the third part of our presentation which are the testimonials and review of cases related to this type of organization. Let's begin with the CT case which you can now see on the chart. This is the case of a company founded by just one person in 1984. Its level of activity was 20, measured not only in sales terms but also in terms of market delivered production soon after the organization startup. It had ten employees. Its degree of evolution was prehistoric. It had a two tier executive organization. And something which is important to point out is that at the beginning of any consulting process it's worth your while to try and differentiate the applied capacity from the current potential capacity from the potential future capacity. With these three values we'll be able to tell the highest point the organization can aspire to reach under the leadership of its founder making sure, of course, that all work related areas are always correctly organized. In small organizations the visible working capacity is not well represented by the person's available current capacity because he's moving about in a highly oral and highly emotional field with very little objective information. The truth is that by understanding these three different capacity values thanks to the requisite organization, the businessman and his organization can be taken to a level of development that is above and beyond the founder businessman's own capacity. This would place not only the existence of the organization at risk but also that of the entire company. The last element to appear, then is an attempt to comprehend the degree to which the founder can identify the various instances or spaces that we mentioned previously. These are the ones belonging to the members of the association, meaning the shareholders, the one reserved for the association's governing body and the instance related to work within the executive organization. The owner of this institution has been working in consulting since 1988 for 18 consecutive years a fact which has allowed this enterprise to take its level of activity from 100, which is the base figure we use whenever we begin a consulting process, to 12,240. The payroll has jumped from 35 to 603. The executive organization's degree of evolution has reached an intermediate level. Two more levels were introduced into the structure level three, which is the level we looked at in the conceptual transition scheme, and the new level, level four. And progress has been achieved, although not enough in the discrimination of the different organizational instances, the governing bodies, the associations and the shareholders. At this moment it is the largest company in this sector in Argentina and within its market niche it has the greatest volume of work and a level of activity higher than those of the multinational companies it competes with. This.