AI Migration and Other small improvements

04AHoffman.wav

ronadmin — Tue, 26 Sep 2023 08:11:08 +0000

04AHoffman.wav

Job ID

1695715793

ronadmin Tue, 09/26/2023 - 14:11

Duration

1897seconds

Summary

- Arden Hoffman is the Vice President of People at Dropbox where she leads global HR and recruiting. She has a long career in HR with various positions at Google and Goldman Sachs. How do you acclimate from one industry to another?
- How do you get leaders to be comfortable with conflict, particularly younger ones? Anchoring to equity and meritocracy is often something that works quite well. Onboarding is big, and it's about educating people. Take some questions.
- Rips: What would be the implications if Dropbox were to adopt a NASA online sort of approach? What would happen within dropbox. No one would probably end up doing their jobs. We have a lot of open systems within our company, and I think people would love that.
- A lot of the unofficial values of Dropbox seem to embrace conflict. Can dropbox teach people to be better programmers or do you just try to find the best programmers?
- Do you think there's something about software development as a technical process that requires. this approach to freedom? I do, actually, and I think it's quite difficult to one. And you can see that there's a war for talent within the Valley.
- And then your second question in terms of the sorry, silicon Valley versus software. I would definitely say it's a Valley and software engineer. But I go to Chicago. I'm going to call it there.

Video Link

https://aioperations.cmsmentors.com/project-transcription/govideos/2015%20VIDEO…

Formatted Text

Speaker A Let me introduce our next speaker, Arden Hoffman. She is the Vice President of People at Dropbox where she leads global HR and recruiting. She has a long career in HR with various positions at Google and Goldman Sachs as well as DeWitt Consulting. And actually she happens to also be a very good friend. We met at Ward in our MBA program and I've been following a very successful career since. So Arden.

Speaker B Thanks, everyone. It's great to be here. It's been a long time since I've heard so much academic research. So I feel like I'm going to go back to work on Monday. I'm much better person, probably much better at my job. One of the things that John mentioned, we met at Warden and we've always been discussing cultures and companies and I've always personally been fascinated by bringing tons of people together and having these successful companies grow and how that happens and how it's designed, how leaders are built. And so moving from places after business school that were quite traditional and have a lot of history to high tech has been quite an interesting challenge and quite interesting professionally, but also personally in terms of the values that people have moving from one industry to the next and how do you acclimate from one industry to another. And tech is very insular looking. It doesn't like to look at other areas or older companies because there's an assumption there's no innovation. And so it's really kind of bringing some scale and kind of maturity into these newer companies while at the same time embracing the creativity and the newness that happens. So I'm personally really interested in how you're creating, how we create these cultures of freedom and I'll get a little bit into that a little bit with the combination of yet informing and giving rules and building a culture. So I wanted to just give a little bit of context kind of what happens in the Valley and a little bit about Dropbox and then kind of highlight some of the paradoxes that happen and that we're managing through and I think a lot of new companies are managing through. So just to give you kind of a sense of the realities of the Valley, I think this is important context. These are all very early stage companies. They don't have a lot of history, very little tradition and they have very new values. And I say new because they may seem old to companies that have been around a long time, but people are spending time in room saying what's actually important to us, what are the symbols? We want to tell the company by which to live. People are obviously younger, but I think I wanted to kind of veer away in this presentation from just it's not actually an age thing, the newness of a company, you don't have the bigger change management issues that are going on in large scale companies of thousands and thousands of people either globally or nationally. Innovation and creativity is obviously on the forefront, but it also means not hearing no. So the idea that processes and policies that actually might make things move more smoothly or might kind of ensure equality are seen as kind of stifling and bureaucratic. The answer of an engineer will say, if I heard no or that wasn't possible, google Glass wouldn't exist. Self driving cars wouldn't exist. The cloud may not exist. There's all these innovations that are coming every day that would not exist. So when you're trying to talk about, well, hey, this is actually a place where we need to think about a rule actually makes sense. The immediate reaction is, Are you kidding me? Like, that old school is corporate, and I'm not really into that. And you're stifling innovation. Young leaders and managers who have an aversion to conflict have an aversion to saying no. These people grow up as friends. When they started these companies, it's very difficult to turn around five to ten years later and say, hey, you know what? That raise that you wanted or that job that you wanted or that opportunity that you wanted, I can't give it to you. Even though we were just having freaking whiskey together a year ago, now I can't actually deliver on that. So it's a very different people are very sensitive to treating people like human beings. Doesn't matter what you wear at work, it doesn't matter what matters what you do, doesn't matter how you present yourself. And so that is very much they kind of take the holistic person. When I'm on Wall Wall Street, I was talking to a friend of mine and I said, how's your job going? What's going on? And he know, I'd really like my job if I actually worked as human beings. And I was like, okay. So I've always kind of taken that with me. It's very much the opposite in the Valleys, I'm sure most of you can attest to or possibly had that relationship. The valley is about relationships. It's not about networking. So you hear a lot about bigger companies, oh, this person needs to network. They need to get exposure. The value is about relationships. What kind of relationships, kind of friendships do they have? And that's obviously because of the nascent nature of these companies, but also how people have connected over time. When you've started in a room of ten people and you grow to even 1000 people, you still know a lot of people, and then there is a war for talent. I didn't really understand war for talent. I have to say, no offense to McKinsey and all the academics talking about it in 2001, because everyone was crashing down and John and I were lucky to still have jobs after graduating from business school. There actually really is a war for talent in the Valley. There is a definite fear of losing talent. There is a fear of losing the best. I mean, I have people coming to me all the time saying, oh my God, this person's going to quit. I'm like, well, are they really quitting or they're going to quit at some point? And what does that look like? Well, they're going to quit at some point, so we need to give them some more money. And I said, well, I'll give it. They're not leaving. I don't understand what the worry is. There's a tear that there's a Steve Jobs sitting out there and that he or she may go off and create something new. And then you look at a smaller company, and one hire can actually have a huge impact. That's been something a big learning with. Mine actually coming to a company like besides Dropbox, which is about now, what, 1400 people, it'd be 1600 by the end of the year. You hire one person, one the right senior leader, one expert, and it could completely change the direction of a team or group. And this is very similar across the Valley. You see. This is similar in Facebook. You've seen it at Google. So just to give you that context and talk a little bit about Dropbox, how many of you are Dropbox users? Okay, thank you. I'm done. So Dropbox was started about eight years ago with Drew Houston, and he was actually on the red tee in Boston coming from MIT, and he forgot a file. And he actually was like, oh my God. He didn't have his thumb drive, so he didn't have the documents he needed. So this became the beginning of the idea of the Dropbox. There's one place to house all of your materials. He goes to the Valley and he goes to Y Combinator, which many of you know is the incubator and helps startups get off the ground. He said, you need a co founder, go find someone. So he found Arash Friedoshi, who's a lovely guy, actually a good article about him at Forbes, if you're interested. In the last couple of weeks, they became very close friends and know the kind of heads of the company, and they drive a lot. Obviously. Drew's CEO now, and Arash is CTO, but Arash really drives all things culture, so he's seen as the culture guide. He will write me, just wrote me last night about something one person said. X, y or Z. Can you talk to them? How are we going to deal with this? Again, a smaller company really addressing things in a small way. We now have over 400 million users, and that's growing every day. And we're moving into the enterprise space, as many of you probably know. So keep referring to us. Our mission is really to build a home for everyone's most important information so we can free people from the pain of technology and they can do more with their lives. I'm not going to spend a ton of time on this, but I just wanted to give you a little bit of context that we want to do things in our own Dropboxy way as well. And so as the company started to grow and started to form, the question was, okay, what are our values? What are the things that we're going to tell the culture and the company that we want to be our cultural norms. So there were really five of them be worthy of trust. So that is being authentic think going to do and doing what you're going to say and saying what you're going to do and doing. It taking care of one another and our users. So obviously we are housing your data. It is very important that you all trust us with that, that you know that it's not being accessed, but it's also that we trust one another within the workplace. Sweat the details get to simple. If I had one more time, I'd write a shorter letter. That kind of concept is very much alive within our culture. That's why Dropbox is easy to use. It takes a long time to get that simple, as I'm sure most of you know. Aim higher audacious goals, pushing the envelope again, willing to make yourself uncomfortable. And that's something that's actually very consistent in the Valley. Google says very similar things, facebook says similar things. Square, twitter, et cetera. It's all about pushing boundaries. It's not about staying within structure. We not I very much putting the company first. This is an interesting one because Drugbug is kind of one of the first companies that I have found in the Valley that actually really emphasizes putting the company before. This is much more old school in my view. This is a Goldman, this is banking, this is like you come with us and we pay you to be there and so you follow our rules. And this is not that, it's not that prevalent in the Valley. You tend to see because of the war for talent, you see a lot of individuals like, well why can't I have this and why can't I have that? And we'll talk about that in a second. And then the last value is cupcake. And when I was interviewing at Dropbox, Drew was saying to me, well it's a cupcake. And I'm thinking what the hell is going on? Just shows me this cupcake. I'm like okay, but it really is more kind of what is the magic of Dropbox? How do we make the user experience for all of you fun and interesting and surprise you in some ways? How do we do that within the company while we're working together? So those are really kind of our values that we talk about, that we do. They are the communicated values. And obviously there are also other ones though that are not as communicated but are unofficial values is what I call them. But they're also the norms, the type of behaviors that are accepted which cause some kind of tension and I'll get to that in a second. Very emotionally intelligent, as we highlight. There's obviously a ton of research on being emotionally intelligent, but this founders are very open to individual need. It's a very democratic culture. So if you have an issue, you raise it. You go to the CEO, you come to me, you write me an email. There's no boundary or hierarchy in that regard. We want to know how people are doing. We want to know how they're feeling. We're very open to feedback, introverted, so not being too forceful drew and are also quite introverted people. So you see kind of this interesting combination of bringing in more senior people who are very experienced in their roles and kind of know the answer and how do you navigate those relationships and inform one another and educate one another, but yet at the same time stay kind of humble and respectful. I already talked about the democracy piece. There's also a skepticism, a challenging of authority. So assuming worst intent is kind of something that kind of percolates a lot around. And some of these are not values. The title is The Unofficial values, but some of it is just like behaviors that happen. And so it causes this tension of I want to know how you're feeling. But actually if you're assuming the worst, maybe that's not the right thing. We want to encourage an unlimited vacation policy. And we have this on site internal bulletin board. It's called Secret Box. And people post all of these crazy comments and sometimes they'll post their salaries and literally everything. People post snarky comments and all this. And so anyway, people were posting all these posts like, oh my God, this is just because they want to save money. Because if you do unlimited, you actually don't have to pay people out when they leave the company. And everyone was convinced that we were doing it for financial reasons. So I had to answer a question at the all hands. But instead of actually just like embracing, oh my God, I have unlimited vacation, this means I can probably take more, it was, this is a nefarious thing that you're doing. And I'm like, well, you should actually care about the financial well being of the company. So we could start there. But again, it's just kind of a good example of like, I'm going to question authority and I want you to be transparent with me about everything. And so how do you kind of protect the company too, while you're transparent? So some of these how we build culture and reinforce our values while giving people a lot of freedom. And that's something that we kind of struggle with. Frankly, I think a lot of companies do every day taking care of one another. That's within our value set. But it also means but we can't meet every individual need. So how do we explain to individuals and this sounds probably very basic to a lot of you who've been in bigger companies, more historical companies, we're all older. It's like, just get on with it and move. But I get emails from people every day. They're like, hey, I actually really need you to I did get a request, or someone on my team got a request for their pet bring their cat and their pet snake to corporate housing. So I was like, well, we're not going to do that. Why? You don't care about me. And yes, we do, but we can't do that. There's some extremity, but that's not extreme. That's extreme to me because I'm in my 40s. It's not extreme to him. He who's 21 and an engineer and has connected to cat snake. So we're all a lot of our things, but there's also kind of an expectation that the immediate culture that we live in, if I have a job change, if you've given me someone to manage, I should get a promotion today. I should get a paid increase today. So there's less balancing of structure and less patience in that regard. Earning trust means being transparent. We try to be very transparent, as transparent as possible. We have all hands. Every week, people ask questions. They ask them anonymously or not. We're expected to answer them. There's nothing scripted being at older companies that certainly are companies with a lot of history. There's always planted questions, okay, we're going to ask this because they want to know about this. We know we're going to ask this, and you're going to ask it, and this is going to be the answer. That doesn't happen. It's just, hey, these are all the crazy questions we have, and someone's got to get up and answer all of these. So we take our time and we answer them. And sometimes we have the right answer, sometimes we don't. And sometimes we can't actually answer the questions. And that causes a certain level of tension as well, which is, I know you want to know how we decide pay for different people on the same team, and I'm going to give you a generic answer to that. But that's all I'm going to give you, right? I'm never going to share know I said I'd say to the company, compensation is actually confidential. I'm not going to share other people's comp. And was like, compensation is not confidential. You should tell us. And I was like, okay, I don't want you to know my pay. We're not working for the DMV. I don't know what planet we're on here. But so the expectation is that if we want to know information about the organization, that you're going to tell us. And so then how do we as a leadership team, keep the trust with people at the same time also protecting the company? One interesting story just in the Valley right now. Some of, you know, Twitter's being sued for gender discrimination, and part of the case that's being used is that they talked to them in all hands about the fact that they're investigating gender inequity and pay. So that's actually a key. So how do you talk about that with a company, but also not put yourself at risk if there is something in that case, sweating the details, speed and quality. To what end? Right? So there are certain things that you need to think about and sweat the details on. Other things you may not need to. I have a lot of conversations. It's taken me a good amount of time. It's not been that painful. But it's like, hey, this is actually you're hiring experts to come in. You're hiring a CFO. You have now head of people. You have people who can now actually make these decisions quickly because they've seen it before and they know but it's like, well, wait a second, maybe there's a better way to do it. Maybe there's a different way to do it, and should we think about that? And then, so there's that tension as well. And then aiming higher. There's a lot of extremes, and places like Google can afford to say, hey, we're going to give a chunk of cash over to this group, and they're going to be innovative, and they're going to work on glass or self driving cars or whatever it is that they want to work on. We're going to buy another company. But when you're a smaller company and you're actually in a different stage of your business, you also have to prioritize. And you can't have people who particularly engineers, who will go and say, I'm going to work on whatever I want to work on. Well, actually, you need to work on the things that we need you to work on so that we can actually be successful, so that tension is created as well, and how we think about bringing in and attracting talent and giving them freedom, but at the same time helping them focus on where we need them to focus from business. And then again, the we not I prioritizing the greater good. As I mentioned, it's not a typical behavior in the Valley. It is not something it is definitely someone will come in and say, uber's giving me an offer, and I want you to meet that offer. Most mature companies would say, don't let the door hit you on the way out. It's pretty rare that people, companies counter. It's rare that what they do in that regard. They don't go to extremes. The Valley doesn't go to extremes. There's a lot of countering. There's a lot of like, I'll give you what I can so I don't lose you. So again, this kind of setting expectations and the immediate gratification, how do you kind of meet that need while also telling people, hey, can you wait six months? We need to be more fair. We need to be more equitable. And you're going to be now in a process that feels bureaucratic and somewhat stifling. So this is just some of these things that we're struggling with. And I wouldn't say struggle. It's really more of the evolution of a company. We are, as I mentioned, 1400 people now will be 1600 by the year. We're 1000 this time last year, or 800. So again, you're bringing more people in. We're acclimating more people. Some are more experienced, there's more junior people. And so how do we kind of hold on to the values that I mentioned earlier and yet also be able to kind of respect the unwritten rules, the uncommunicated behaviors that we see that are important to people, that actually people think Dropbox is very special, and I think it is very special because of that. And it's different. We hear different stories about Airbnb and Uber down the street and Pinterest and Google and know Facebook has an approach of, hey, if you leave, go ahead, that's fine. We expect you four years and we're okay if you leave. Other companies have a very different approach to talent, how they think about that. So again, everyone has a piece of that and makes a decision on how they're going to manage their talent accordingly. So just a couple of ideas, and Willie actually touched on a little bit of these. This is a much more simple version, a more non academic version, but training leaders to be okay with conflict and disappointment, bringing people in and letting them acclimating them to the culture, the onboarding is big, actually. It is a big word and it's about educating people. How do you get leaders to be comfortable with conflict, particularly younger ones? Anchoring to equity and meritocracy is often something that works quite well in terms of, yes, you may want to raise today, but what about these other four people? Now, I did have someone say to me, well, you should just give it to those other four people. So that conversation pretty quickly. But I was like, well, that's not going to happen, so let's go back to the greater good and a lot of clearly defining problems in the final decision makers. When you have consensus oriented organizations, obviously it's like in these younger companies, you tend to see, well, who actually has to make the final decision? What does that look like? And unless you have an answer to that, it can quite create a lot of spin. I said to my CEO, reward loyalty and call the block. If someone's going to leave, let them leave. See if they leave. Usually the people who complain about leaving, my experience, actually don't leave. So it's not that risky. And then the detail piece, what's essential, what's not, where do you need to sweat the details, where do you not need to sweat the details, and where freedom is essential and where it's not and why and for whom, actually. So those are some things that we're looking at and how do we work through that within the company? Right now, I'll pause there. I'm getting the time, and I'm happy to answer any questions quickly. I know we're low on time.

Speaker A Thank you. Take some questions.

Speaker C Rips, could you help us think through what would be the implications if Dropbox were to adopt a NASA online sort of approach? What would happen within dropbox.

Speaker B What would happen within dropbox. I think no one would probably end up doing their jobs. No, I do think it was interesting. I was thinking about that while speaking. Obviously, there is a huge curiosity to work together. We have a lot of those open systems within our company, and I think people would love that. We actually in the valley. The kind of solution to that right now is things called hack weeks. So we run one, facebook runs one, google runs one. And what it is, is people go offline for a week and they actually do collaborative. People come up with hundreds of ideas, and then everyone can join teams and they just work together on those things for an entire week, and they come up with solutions. And it could be things like that are cultural in nature, and it could be things that are technical in nature. Some of our products have come out of half week. We actually have it coming up in a couple of weeks. So we do try to create those systems for people beyond their role. But we have to kind of carve out that time as opposed to having it in such a large number.

Speaker C Your own people.

Speaker B Our own people, yeah. So I think because we have such I'd have to think about it more, but my initial reaction would be, given that our focus on privacy and security, it would be a scary concept to be working with other people outside the company on things that are so proprietary. Not that NASA isn't, but I think that would be a little jarring. And I think from a news perspective, like Dropbox is sharing secrets with other people outside. And how are people going to feel about their data then if people are accessing that question.

Speaker D So really quickly started with sort of this industry level or value level of analysis where you said there was this aversion to conflict. And then when you talked about some of the unofficial values of your company, a lot of them seem to embrace conflict. Right. Challenge authority, skeptical. I would argue emotional intelligence requires an appreciation for conflict. So I'm wondering going back to what Dr. Kazi represented at the beginning, was selection onboarding. Which of those do you think have been used the most in your tenure there to accomplish that sort of embrace of conflict, given that I imagine not selection, since your story about the snake and the hat. So interesting to see if you saw anything in that that you see working at Dropbox.

Speaker B Yeah, this is also what's interesting to be a smaller company. We're so new that my responsibility is actually creating a lot of those new sound systems. What does our onboarding look like that's not just like, hi, here's your laptop. Right? So we are really trying to think about we do presentation on the culture, on the values, but then it's like, well, what does actually that mean from a behavioral standpoint? And what's interesting is people are comfortable with group conflict. They're not comfortable with individual conflict. So sorry if that was not clear. So it's very much the one on one and the kind of holding accountable and the direct feedback. Everyone's really nice and we're great and we have a nice lunch and everything's good. And it is very difficult for people to hear feedback that's different from like, I am challenging the larger institution to think in a different way and that we just see through it happening and I think people see it, it continues to go and then it grows from there. I actually don't think that would be something that we would not that we would discourage people, but I don't know if we would encourage people to do. But we would say things like we want to be as transparent as possible. We want to tell you all the information, which obviously creates a lot of questions. But we're in the process of having to define along that the selection onboarding, the accountability piece, what actually that is going to look like. Can dropbox teach people to be better programmers or do you just try to find the best programmers? Both. Yes. So we do have a pretty rigorous training program, but our hiring bar is quite stunningly high. So we hire some of the best engineers in the world. So it's both just a follow up question. Do you think there's something about software development as a technical process that requires.

Speaker C This approach to freedom?

Speaker B I do, actually, and I think it's quite difficult to one. I mean, a lot of people are drawn to tech because you ask them and a lot of people, I want to solve problems. I want to create new things. I want to create solutions. I want to change the way that people look and view and work in the world or just are in the world. And I think you can't have a restricted culture and invite those people in. They don't want to be there. Right. And you can see that there's a war for talent within the Valley. There's not a war for talent for the best engineers leaving the Valley and going to companies that wouldn't offer that opportunity. Right. We're not losing people to engineers, to regular, larger companies that are doing more kind of maintenance mode things. Sure.

Speaker E I have questions because you're in an organization that's growing but started off as an entrepreneurial firm. So very often when we talk to executives, there's this comment that structure and structure doesn't exist in small companies. And so I'm curious, from your experience there, as Dropbox has grown, how you've seen the design of Dropbox internally change and how that's affected the cultural change.

Speaker B Yeah, so we've definitely started to put a lot more structure in place. I'd say that's less in the engineering side, but definitely in things like, obviously finance, HR, people used to not track their expenses. Now we have them track their expenses. There's all these kind of small there's smaller things that are kind of you take for granted when you're in a bigger company. But there were a lot of like, oh my God, why are you doing this? This is process bureaucratic. It's a waste of my time, which it kind of is a waste of people's time. It's kind of a boring thing to do, but we have to do it for a lot of reasons, for a lot of business reasons. But I think people understand that this is how you run a more mature company and this is how you scale. And so we spend a lot of time talking about scaling the business and growing the business and being able to be equitable and have the right information about what's happening in the company. And so when we rolled out the unlimited vacation, we said, look, I still want you all to record when you go, because that's going to allow me to find more data about who's taking vacation and who isn't. And what if I see a team that actually isn't taking vacation, we can do something about that. Right. We'll have that data. So I think when people understand that we're using data in the right way, I think that's made it more useful. But I think it's changing the sensitivities of people in terms of how they need to think about how they spend money, how they spend their time, how they work with one another. Sure. I've been there eight months, so I haven't seen a huge I'm sure someone here who's been there four years would probably have a different answer as well. But I think it was just kind of do whatever you need to do to get the job done, and the company is growing so quickly, it was just like, just go. Right. So it definitely flows things, for sure. Yeah.

Speaker C Kind of building on this earlier question, and that is the startup company usually has a culture, if you will, that reflects the values of the founders. Dropbox, of course, is still much in the startup phase. So I have a two part question. One is to what extent the culture that you just described is a reflection of the two founders versus of course, it's more of an emergent culture. Let me ask the second question so we can answer both questions together. The second question is that you refer to this as more of the Silicon Valleys culture. You also mentioned that it's more common among the software programming sector. So the question is to what extent is this really a Silicon Valley culture, or to what extent is this basically reflection of that particular industry?

Speaker B Yeah. So in terms of the first question, I think the company very much is driven or has a lot of I think Drew and you know, who they are as people is very much influenced the company. As I mentioned, they're both somewhat introverted. They're very kind of gentle in how they communicate. They're not out there pounding. We don't have those kind of and those people tend to come off as arrogant to us. We may not hire them. There's a certain selection. This is my own observation. I don't say it's not anything that's intentional. They also are connected to pretty much everyone in the company because they've hired almost everyone in the company. So there's also that kind of, oh, how do people operate problems? How do they think about problems? When we go into come up with solutions in a room, people are quiet. It's not about grandstanding. So it's a different approach. So I would say it's very much aligned with who they are. Want to learn a lot. They want to be pushed. They want to be challenged. And that also comes out in the culture as well. And then your second question in terms of the sorry, silicon Valley versus software. Thank you. Honestly, I haven't worked in other regions of the country to say what that would look like. But I do know that when I talk to other engineers that are at more traditional companies and they're not the dominant culture of that, they definitely don't have as much power and there's not as much kind of freedom, and they accept that. So I do think it's probably a confluence of both being in the Valley and having incredible job opportunities at every time you turn around getting phone calls every 20 minutes. And with companies that are frankly more Western in nature. Right. They're more casual. They want to treat people well. They're about well being. They want you to work out. They want to provide services for you on site. They care about. So I think it's a combination, but I would definitely say it's a Valley and software engineer. But I go to Chicago.

Speaker A I'm going to call it there.

Speaker E Thank you very much. Ram.

06RFunk.wav

ronadmin — Tue, 26 Sep 2023 08:11:07 +0000

06RFunk.wav

Job ID

1695715793

ronadmin Tue, 09/26/2023 - 14:11

Duration

1831seconds

Summary

- Research tries to get at the question of how informal social structure in organizations might shape organizational outcomes. Studies tend to focus on individuals networks, individual person's position within a network, in an organization. Global network perspective can lend a lot of value.
- The quality and efficiency of surgical care differs widely among hospitals. Over 50 million surgical procedures performed annually in the United States. Surgery accounts for about 40% of all physician and hospital spending. Researchers are trying to map how different providers communicate with one another.
- We have about 4000 hospitals just shy of 800,000 patients, about 700,000 physicians, about 15 million physician and patient encounters that we can use to make some kind of inferences. How these networks might be influential for organizational performance.
- Hospital systems where physicians have very cohesive ties that are conducive to information sharing and coordination have lower readmission rates, Ed visits and mortality. Cross specialty integration seems to have an association with lower cost care. How easy or hard is it to coordinate across specialty lines?
- The claims data don't differentiate between informal, formal and so on. I've been thinking about this more as informal structure because it's something that is influenced. What's reflected in those ties seems to also be reflected in informal patterns of communication.
- Team based medicine could be a good way to improve health care outcomes. But there is a downside to interprofessional rivalries and conflicts. And so thinking about how can you change the institution is something that needs a lot of consideration.

Video Link

https://aioperations.cmsmentors.com/project-transcription/govideos/2015%20VIDEO…

Formatted Text

Speaker A Talk about today is research that I have going. It's fairly early stage work and it basically tries to get at this question, this broad question of how informal social structure in organizations might shape organizational outcomes. And by informal social structure I just mean things like communication and collaboration ties or information sharing ties basically networks inside of organizations, informal networks in organizations. So there's been a lot of research over the past couple of decades on networks and organizations. This isn't a new area and it's been very valuable, very useful work that's generated a lot of interest and useful insights. But what's a common theme about that work and the approach it's been taken is it tends to focus on individuals networks, individual person's position within a network, in an organization and how that influences the individual's performance or outcomes, right? So things like there's been research on how the strength of a person's connections might influence their ability to acquire new complex knowledge or research on, say, how being a broker and straddling disconnected contacts might affect a person's career advancement, right? Now, this empirical approach of focusing on the individual is somewhat though, in contrast with a lot of really classic theories about organizational design and just organization theory more broadly right. Which tended to focus on broader networks within organizations that connect all the members of an organization, kind of bring people together and in turn have consequences for the organization's performance.

Speaker B Right.

Speaker A Not an individual, but organization's performance. And so some classic theories ask questions like are communication patterns, are some communication patterns better than others for managing environmental uncertainty and turbulence? Or do bad communication patterns contribute to the failure of young firms? Or things like how do communication patterns within an organization shape overall decision making and its effectiveness? And so if I was going to try to visualize the difference between what's been a very common approach to studying networks and organizations and the kind of approach that I'm advocating, I could do it with this figure. So on the left hand side, you have what's been sort of the predominant approach and studies tend to focus on well, how does this person's position within this network or in this network neighborhood, the fact that they have three connections that are configured in some way affect their performance and same with this. And these might be two observations in our data set, right? And what I'm proposing is something that's a little bit more on the right hand side where we have information about this global network of informal network structure within an organization and how the fact that, well, say this is a firm, right? And it looks like there are three sub communities within this firm and there are a couple of boundary spanners that seem to be pretty important, how can we use that information to give us any insights about whether this organization is going to perform well and under what conditions and things like that right. So if we move to this global level of analysis now, one area where I've been looking at this, and I think it's pretty valuable, I think that this global network perspective can lend a lot of value. And I think also the context helps us learn a little bit more about how informal social structure matters for organizations more broadly. So it goes both ways is in surgical care delivery.

Speaker B Right?

Speaker A And so why focus on surgical care delivery? Well, there are a couple of reasons. And one is that there's this vexing problem within health policy. And it's the observation, the persistent observation, that the quality and efficiency of surgical care differs widely among hospitals.

Speaker B Okay?

Speaker A So just to give you a few numbers, mortality rates for vascular surgeries, the common surgery range anywhere from three and a half to about 7%, among the lowest and the highest quality quintile hospitals. That's sort of a known finding. What's probably even more striking is that within a single metropolitan area, it's been found that the average cost of a knee replacement surgery can range anywhere from about 17,000, just shy of $17,000 to nearly $62,000 within the same metro area. And these sorts of differences between quality and cost are persistent even after you adjust for things like patient health, local economic conditions, and a lot of other factors.

Speaker B Right.

Speaker A So there's wide variation among hospitals in their performance on these key dimensions of cost and quality.

Speaker B All right?

Speaker A And these differences matter. They add up to be very significant. There are over 50 million surgical procedures performed annually in the United States. That's about $500 billion spent on surgery every year. And surgery accounts for about 40% of all physician and hospital spending.

Speaker B Right.

Speaker A So cost and quality of health care has been a big part of the national dialogue recently. And so one place that we can focus if we're trying to make a difference is thinking about interventions into improving surgical care delivery.

Speaker B Right?

Speaker A Now, why? A network perspective is the next question. And I think there are also a few reasons here why this kind of approach could be pretty useful. The first is that surgical care is often described as a team sport, or at least in an ideal sense, it should be a team sport, right? And that's something that people strive for. One reason for that is that over the course of a surgical treatment, a patient will typically see multiple different providers of different specialties, and those providers are likely dispersed across different locations, and the patient's seeing them at different points in time, it could be a PCP, a surgeon, a medical specialist. And so a single physician is rarely overseeing all aspects of a patient's surgical care, especially in the US. Healthcare system, where insurance companies aren't really reimbursing for care coordination and other sorts of things. We rely on patients oftentimes to transmit this sort of information.

Speaker B Right.

Speaker A So if we're thinking about cost and quality and surgery as a team sport. It's really essential for having effective communication. It's really essential to have effective communication and collaboration. If we have that, it might do things like eliminate ambiguity around treatment, know, oh, is the PCP going to take care of this or is the surgeon going to take care of that? Who's going to prescribe this medication lapses and care transitions. So the surgeon thinks that some aspect of the recovery is taken care of, whereas the Pct was thinking that had already been done. Conflicting advice in areas where there aren't clear guidelines, one provider might feel one way, the other feels the other way. If they're not communicating, then that can create problems, particularly in the form of things like costly emergency department visits. That's something that's been a big priority for Medicare and Medicaid and intern insurance companies to try to avoid the benchmark of quality things like unnecessary readmissions that could be taken care of in a physician's office as opposed to in a hospital, and just to improve the overall quality of care. So within this context, we've been working on studying physician networks within hospitals and trying to map this global structure of how do different providers communicate with one another and what can we learn about how the structure of those networks might influence outcomes. Now, one reason why I think there hasn't been quite as much research on this topic until now is that it's been hard to get this kind of data right, because in order to study variation in these global networks, we need massive networks across lots of different organizations, potentially across different periods of time. So we have enough variation as opposed to before, to study individuals networks, we might just need to study one or two organizations to get enough variation. But now with all this research and all this interest in big data and administrative records becoming more and more available things on websites and so forth, we have lots and lots of data that let us get very rich pictures of this kind of thing that's happening inside organizations. So what we've been doing to map these networks is getting claims data, national claims data from Medicare through the center for Medicare and Medicaid Services, which is the organization that runs Medicare and Medicaid. And what we have are four years of data. So from 2008 to 2011, for four common major surgical procedures that are common among elderly patients, we have Medicare data. We're focusing on that. Those are collectomy prostatectomy, hip replacement, and then coronary artery bypass grafting, basically bypass surgery it's called also known as cabbage. And that's what I'm going to focus on today. And we have lots and lots of data too, which lets us get at this question. If you can imagine when a patient goes in and they're seeing all these providers, it generates a lot of claims, right? So that's what lets us get this rich picture. We have about 4000 hospitals just shy of 800,000 patients, about 700,000 physicians, about 15 million physician and patient encounters that we can use to make some kind of inferences and sort of describe what's happening in this setting. So I haven't been doing this by myself. This has been really a big team project because there's a lot of different aspects. And I've relied really heavily for understanding the medical context and the aspects of care delivery by leaning on physicians who do this day in and day out. So I have collaborators mostly at the University of Michigan, but also some people at other universities too, that have been able to contribute in a lot of ways to this and give lots of insight to many aspects of the project. So what I want to describe now is how we move from claims that are not created necessarily for research purposes, right. They're for billing and other financial records to network data.

Speaker B Right.

Speaker A And one way that I can help you try to see that is by describing a typical or somewhat simplified pathway through which a patient might go from feeling sick to getting coronary artery bypass grafting. So imagine this guy is an 80 year old patient and wakes up one morning not feeling too good, has some chest pain. He goes and contacts his primary care provider and goes in for an office visit. And she says, Run some tests and ask him a few questions and says, I think we need to look into this further. You might need surgery. And give him a referral to the guy, referral to a surgeon. The surgeon does some more tests and says, yes, you're a candidate for cabbage. Let's schedule a time in the operating room, get this done. So the patient goes into the hospital. While he's at the hospital, maybe for some other complications. He sees an endocrinologist, sees a psychiatrist because maybe there's some concern about depression. He gets out of the hospital, he's doing well, has a follow up with a PCP, follow up with a surgeon, maybe a few weeks later, a couple months later, checks in with the PCP again.

Speaker B Right?

Speaker A So every time that happens, a claim gets registered with Medicare, and from those claims, we get lots of information about who the patient is, who the physician is, what the nature of the visit was, other demographic information. And we also know about frequencies of interaction. So the patient saw the PCP three times, other providers just once. We can then go from these patient to physician interactions to start to look at interactions among physicians around shared patients. So we know that this is the patient's care team, and since they were all working on the same patient, they have some sort of relationship with one another.

Speaker B Right.

Speaker A There's also been work on this that's validated this approach and found that the more patients that paraphysicians share in common, as evidenced by Medicare claims, is actually a very strong predictor of a self reported tie. So it's very good data for getting at these sort of networks. Now, to map the hospitals and get the kind of data that we want to analyze, we repeat this procedure for all the patients within a hospital over the course of a year and then for each hospital in our data set. So there's 4000 hospitals. That's how we get these observations of this global network structure over time within a hospital. Now, one of the things we were most interested in when we first started this project was just getting some descriptive data on how much variation do you see in these networks and on what dimensions do they vary and what can we learn about health care delivery, surgical care delivery, by looking at these. So here's one example of the kind of wide variation that we see and how you can start to think about how these networks might be influential for organizational performance, right, and the ability to deliver high quality, low cost care. So what you have on the left is a hospital. These are both very similar hospitals. They're in a similar region of the US. They have sort of a similar number of patients, have a similar number of physicians. So they're sort of comparable. But you see, the structure of the network is very different. On the left hand side, we have a hospital that we say has high cohesiveness, right? So we use some network metrics that I could discuss, if you're interested in, to kind of quantify the extent to which physicians cluster around shared patients. They have many shared patients in common with one another, and the people that they share patients with also share patients with one another. So like a clustering measure, right? And you see this network has this dense core which is indicated by these red ties. So you can get the sense that there's a lot of information sharing. People know one another within this hospital. And so it seems less likely that information is going to fall through the cracks. If a patient has a problem, it's likely someone's going to be on call and they know who their Pct or who their surgeon is and can share information. That's not what we see in the hospital. On the right here, the network is much more sparse, all right? People are a little bit more isolated from one another. You see far fewer of these clothes or cohesive sorts of ties, which suggests that information sharing coordination might be a little more challenging. We've also looked at this in another way. We've tried to look at the extent to which there's information sharing or shared ties across different types of specialties among physicians that are involved with providing surgical care. So we have primary care physicians of the gold color, surgical specialists of the red color, medical specialists of the green color. And the idea is, again, going back to what I said earlier about these surgery being a team sport that requires input from surgeons, PCPs, medical specialists. The idea is if the PCPs within a hospital have more familiarity with a broader race of surgical specialists and surgical specialists have a broader familiarity with the PCPs and the medical specialists, it again creates more opportunity for information sharing. And in fact, this has been a big goal of healthcare reform, is to break some of these barriers and get people coordinating more as teams and not as silos of medical specialties. So unfortunately, it's not coming up quite as clearly as I hoped. On the screen, the lighting is a little weird, but according to our measure, what I'm trying to convey here is that this hospital is more integrated because you see more wider distribution of these blue ties, which are ties across specialties, right? Whereas in the hospital on the right, which is again comparable in a lot of dimensions, many of the cross specialty ties come from just a couple of different primary care providers and surgeons that refer heavily among one another, right? So you might expect that people concentrate their relationships a little bit more deeply within a particular set of providers and aren't quite as familiar with some of the other specialists within the hospital. Again suggesting some interesting things potentially about coordination. So the next thing we were interested in is sort of after spending a lot of time staring at these balls and stick diagrams and trying to figure out what was going on, is if we could see any connection to outcomes.

Speaker B Right?

Speaker A Really at this point in the project, as I mentioned this early stage, we're just trying to test for associations, so to get the best associations we can to see if there's anything interesting happening. So we started creating models and obviously there are a lot of other factors that likely get in the way and make this relationship sort of hard to observe, right? And so we've tried to control for a bunch of alternative possibilities, things like one of the things we spend a lot of time figuring out is how sick are the patients?

Speaker B Right?

Speaker A Because you could expect that would easily affect the network structure, could also affect the outcomes for the hospital. So we've included a lot of controls for that. We've included a lot of controls for the socioeconomic status of the patients and of the market in which the hospital is situated. Also other measures about the healthcare capacity and the healthcare market that the patients are trying to that the patients would be a part of. How many patients, how many physicians? What's the volume of activity being done at this hospital? We've also tried to account to some degree statistically for some of this, some of these possible sort of alternative things that could be affecting this relationship. What we've been interested in are three measures of quality and one measure of cost. So we've been exploring 60 day readmission. So after surgery, is the patient readmitted within 60 days. That's something that's interesting. Again, from a billing perspective, it's something insurance companies care a lot about. Ed visits, unplanned emergency department visits are much more expensive than if a patient goes to see a Pct. Mortality is obviously something we care a lot about. And then the total episode cost and what we find. So here's readmissions we find a similar pattern. Here's readmissions, here's adjusted EV visits and then our adjusted measure of mortality. And I just want to focus on mortality because the relationship is pretty similar. But one of the things we find is that a 10% increase in the cohesiveness of these networks above the mean is associated with something like a four and a quarter percent decrease in the adjusted mortality, right? And then you can even see differences across the high and low hospitals with high and low levels of cohesiveness or sometimes we've called it we're presenting this for a medical audience at teamwork levels. So the difference between the highest and lowest hospitals on teamwork is something like 28 and a half percent difference in mortality.

Speaker B Right?

Speaker A We also find some pretty interesting relationships with cost. Again, this is looking at that measure of integration. So do specialists coordinate well across different do they have good communication ties across different specialties PCTs medical specialists and so forth? And we find that from the hospitals with the lowest levels of integration to the highest levels, it's a difference of about $3,000 per procedure per cabbage, which, when the cost about fifty nine thousand dollars fifty seven to fifty nine thousand dollars might not seem like a lot. But one thing to remember is that each year there's something like 200,000 costs of these performed, right? So if you could save $3,000 on each one of those, then also keeping in mind that this is just one of dozens and dozens of very common surgical procedures, you could potentially talking about billions of dollars of savings for the healthcare system. This is something that could be implemented. So just as a way of kind of wrapping up, the things that we've found so far are that there is a lot of variability in the structure of these informal networks within hospitals and health systems around different surgical care episodes. We find that hospital systems where physicians have very cohesive ties that are conducive to information sharing and coordination have lower readmission rates, Ed visits and mortality and then cross specialty integration seems to have an association with lower cost care. That leaves a lot of kind of open questions. And one of the things that we're trying to figure out now is sort of like what are the mechanisms and how do we make sense of this relationship? I think one thing that needs a lot more exploration is trying to understand, well, what's the role of formal structure, right? So how are formal dimensions of the organization? Things like electronic health records or IP systems or other things like that influencing these networks? And how can they maybe complement or serve as substitutes for this kind of coordination? And then there's the big open question that something, again, we're trying to move forward on understanding. Also combining this with some qualitative work is figuring out the dynamics.

Speaker B Right.

Speaker A How can you change one of these networks if this could lead to something that would have substantial cost savings? How easy or how hard is it to get providers to coordinate across specialty lines? I'll go ahead and just stop there. Thank you.

Speaker C So what you're shown here actually, is that if there's more information processing across the transition points right. Then both the mortality goes down and the cost goes down. Is that the correct interpretation of your presentation?

Speaker A Yeah, the data seems to be suggesting that's what's happening. Yeah, absolutely. And that's consistent with other research that's been done more at a team based level.

Speaker B Right.

Speaker A And there's been some work that's been following particular patients and videotaping and seeing what happens as providers, even within a single unit, are passing on patients. A shift change, for example. And the quality of information transfer at those points in time can vary a whole lot and then can have significant implications for continuity of care, even when the patient's within the hospital.

Speaker B Right.

Speaker A Figuring out how information sharing can be more efficient is something that's really of interest to potentially having an impact on quality, cost, things like that.

Speaker C And what your research? Will that sense be generalized outside the hospital system? Because these formal structures in the hospital with emergency department actor created matrix structures. And if you find that there's both a cost reduction and performance improvement in other ways, that might be some resources could be taken to other types of matrix structures.

Speaker A So is it generalizable beyond the other?

Speaker C Yeah.

Speaker A What I will say is that we have seen consistent patterns across the different types of surgeries that we've been looking at, and they vary in terms of things like the complexity of the surgery. Some are much more routine, you're in the hospital for one day, overnight effects, and others are more complex. So I know that it generalizes, but beyond cabbage. But I think it's an open question. Certainly there's an assumption within the health policy literature, and there is some research as well too, that says fragmentation is a huge problem in the healthcare system. And that's just not within, but that's also across. So thinking about the hospital to the physician practice, to ambulatory surgery centers, and so the idea is to reduce that fragmentation should improve outcomes. And so I think that this could be viewed as some evidence in supporting that idea. I think it sort of complements that, but I can't really directly tell.

Speaker D Yes, I agree. Very interesting discussion. You have used the claims data that are sort of binary to build up the network structure. And then you've interpreted that structure as the informal structure but the claims data actually don't differentiate between informal, formal and so on. And it all kind of confounded in terms of you have a real structure. I understand, but I don't know how you can characterize it as an informal structure.

Speaker B Well.

Speaker A I've been thinking about this more as informal structure because it's something that is influenced. So physicians make referrals, right. But patients are the ones that need to actually implement those, and a physician might make a referral that's never followed up on. And so it's informal in the sense that I guess why I was using the term informal is that it's getting at, I think, patterns of communication around these shared patients. And we know that what's reflected in those ties, what's reflected in the claim, seems to also be reflected in informal patterns of communication. We know that hospitals vary in the ways that they're organized. They tend to be organized for the most part around specialties and primary care is separate from specialty care and so forth.

Speaker B Right.

Speaker A That's not the case everywhere, and there's a movement away from that by introducing things like patient centered medical homes where you're getting settings that are organized more around patient needs as opposed to specialties and things like that. But I still think the predominant way of organizing this is more of separation. And so I tend to think of these ties as things that are spanning some of those boundaries. And that's why I've been calling informal connections.

Speaker B Good.

Speaker E Just a quick question, and I'll preface this by saying I know nothing about healthcare, and I try and stay away from hospitals whenever I can. But I remember asking somebody once, what's so special about the Mayo Clinic? I know you're in Minnesota, so you might know, and somebody told me something about team based medicine. So I'm wondering if, when you created your structures, did it correlate with any self identified philosophies or missions of those different hospitals? I know you said these hospitals are similar. Maybe they're similar size, similar budget, but did they have different philosophies? And that explained why some of them had the different cohesiveness or the different integration.

Speaker A Yeah, well, so one of the things that we were trying to do to handle that is use mostly fixed effect models. So we're trying to make comparisons within hospitals. And so as long as the Mayo Clinic doesn't change its philosophy within this period and that's kind of a fixed thing, then that's the way we can it's not perfect, but that's the way we're trying to deal with it. I think places like the Mayo Clinic are more the exception than the rule, and I know that one of the things that makes them unique is the way that they pay physicians.

Speaker B Right.

Speaker A The physicians there are salary based they're not using fee for service. And I think the idea is that that allows them to spend more time with patients right. And not be they have to focus less on the volume of care that they're doing and can focus more on the quality and giving people the attention sort of things that they need, which lets collaboration happen a little more easily. But I think that even like replicating the male clinic model by male clinic in other settings has taken a long time. It's been very hard. And so although other places are trying to do that, I think it's not quite.

Speaker F Healthcare sees that the team model leads to successful outcomes or better outcomes. So I'm curious about when does that not apply or what are the limits to that? So from your study, do you have a sense of what are the detrimental or negative aspects of this? Because I want to be able to generalize this now to other studies. So is it the speed of which the outcome, as we make it more cohesive these networks? Is the surgery delayed? And what's the trade off between having these team work versus I haven't heard anything about the downside. Is there no downside?

Speaker A No, I think there definitely is a downside. This is one of the areas where I'm starting to move now, is to try to figure this out and to think about this more deeply. Two responses. One is just to give an example of what I think is a downside or risk with this and that has to do with some of the cross specialty sorts of collaboration, right? So coming from more of a sociological background and a huge field that I'm sure a lot of you are familiar with sociology of professions and there's a lot of work about how there's jurisdictional competition among professionals, people don't get along and it just makes this type of coordination collaboration very hard.

Speaker B Right?

Speaker A And so I think that there's a real risk that if this sort of thing is just implemented in a place where there are those very strong interprofessional rivalries and conflicts that it could just end up making things worse. Right, because people maybe don't want to work together and they feel like their specialty is superior and then now they're being told that they need to work together in more of a teamwork setting and it's just going to be a challenge. And so thinking about how can you change the institution or other things like that is something that I think needs a lot of consideration. That's just, for example, one of the ways that I've been thinking about it, but I certainly don't think that it's something that would always work. And then there's also the fact that within health policy they talk about this quadruple aim which is sort of four goals that a lot of people think need to be accomplished in order to improve the health care system. And one of those is care for care for patients, reducing costs. But another big one of those is care for providers, right? Teamwork takes work, right? And if providers are already. Just really strapped as far as time, and they're just struggling to keep up. And we have a shortage of physicians. And then asking them to maintain all these other relationships as well could also be something that could be problematic.

Speaker B Thank you.

07RNicol.wav

ronadmin — Tue, 26 Sep 2023 08:11:07 +0000

07RNicol.wav

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1695715793

ronadmin Tue, 09/26/2023 - 14:11

Duration

1753seconds

Summary

- Our next speaker is Ron Nicholson, who is Senior Partner and Managing Director at BCG. He was named Top 25 Global Consultants by consulting magazine team. And so I'd like to welcome ryan McGregor.
- Most of the clients we work with want to reduce cost. And when you see that, it's because they have very inefficient structures. This is what I call the layer level diagram. It shows the layers of the organization, and these are the levels of the pay grades. It's a diagnostic to show the client what they're really operating as.
- Most large corporate organizations have what I call the frozen middle. We needed a process that expanded geometrically, not linearly. Two thirds of the time that I do this diagnostic, I do not do the process. It's a model of enablement as opposed to direct engagement.
- The first one is changing organization. Organizations have a mass and a velocity and the momentum of the organization. The other thing that's really helpful in this process is using a set of principles and guidelines. These are about cultural change.
- In a cascade, one cascade typically takes five to six weeks. Leadership and management is about having a high span of control. If people promote more of the junior people and give them more of a challenge, the organization becomes much more dynamic.
- John, question about the rule no individual contributors above level four. In our system we will allow individual contributors all the way up to direct report to the CEO. The span control depends on the activity. The metrics really matter.

Video Link

https://aioperations.cmsmentors.com/project-transcription/govideos/2015%20VIDEO…

Formatted Text

Speaker A So our next speaker is Ron Nicholson, who is Senior Partner and Managing Director at BCG. This is an extensive resume, so I'll keep it short, but he has served as, among other things, worldwide, head of BCG's Global Practices, the head of their organizational practice, as well as the head of their technology, media and telco practice. He was actually named Top 25 Global Consultants by consulting magazine team. He's also PUCO MBA. And so I'd like to welcome ryan McGregor.

Speaker B Thank you, John. I want to thank John for inviting me. But also I want to particularly thank Rich Burton, who was my professor 30 years ago, and he really inspired the love of organization. So I've been doing it for 30 years. What I want to talk about today is really a process, and so I'm going to do it in a somewhat context and content free way. But I want to describe the uses of this process. This is something I've been developing for literally decades, and it's been used now. We're using it in change management in general, but very specifically in organization ways. So the first and most simple use case, and this is what we started with, was taking an existing organization and changing it to reduce cost, reduce the number of layers in the organization, and to increase the span of control. Very traditional view of organization. The second use case is actually to take a new organizational design and use this process to implement a new organizational design. The third case is one that I'm very excited about because we're doing this now. If you've read any of our current work on adaptive strategy, what you see is that we actually have to create organizations that are much more adaptive to be able to work with the agility they need to work in this environment. So the way to think about that spectrum is entropy at one end of the spectrum. The example I'll use today is a very low entropy organization. It's january 5, 1914. Henry Ford announced the $5 workday, and it started the moving assembly line. Everybody was optimizing on the process and what specifically be done on the other end of the spectrum. These organizations that we're seeing today have very high entropy, but they're less efficient and less effective. So I want to talk about the process. So the statement of the problem is as follows. So what we're going to do is move from one organization to another. And the key to this is this is what my clients were asking for. Most of our clients, by the way, are Fortune 100 or their equivalent around the world. So these are companies that typically have 100,000, 200,000 people in them. And they came to us and said, we need to figure out how to change. And so this process is scalable. So I've done this process, and I don't recommend my clients do this with something less than 20,000 people, but anywhere between 50 and 300,000 people. We use this to change organizations. So what we're really going to do is move to this as rapidly as possible. As you can imagine, large organizations need to move from one state to the other very quickly. Second, make sure everybody has ownership. This is really critical because when you make change to organization, if the people in the organization don't own it, it doesn't work. Efficient, effective, of course, retain the highest count individuals and minimize the number of layers of management and span of control. So I'm going to talk specifically about delayering today. At that first example or use case I mentioned the interesting thing about this. Most of the clients have come to us over the years and say we need to reduce cost. Our costs are out of control. We want to lower our overhead cost. So the objective they start with is this the value is in this order that actually much faster decision making. You end up with better accountability, so forth. Once organizations have been through this process and I've actually had the pleasure of doing this in many different types of organizations, from large industrial companies to large telcos to technology companies. Actually last year had the opportunity to do this with one of the headquarters of the services within the Pentagon, which was fascinating because the culture is very different there. But the process worked. So let me be a little pedantic here and just go through a few definitions. I'm going to show some slides that are going to hinge off these definitions. So first layer, when I talk about layer of an organization, it starts with the CEO at the top and the people that report to the CEO are layer two. The people report to them are layer three. So layer is a structural dimension of the organization level. When I talk about level, I'm talking about pay grade. So level one in this case will be the CEO and his equivalents or her equivalents and so forth down the pay scale. So if you look at this simple diagram, level two are the two people in the boxes on the second row. There's another person over here that happens to be a level three, but a layer two person that might be in a large corporation that might be the public relations people or investor relations, something like that. The reason we do this, by the way, and then we talk about, just to finish the definition, a supervisor is anyone that has people reporting to them. So they're people that manage other people, while individual contributors are people who are doers, not managers. I know that's a fairly binary definition, but we found it to be quite useful. Now why do I do all this? To basically do a diagnostic to show the client what they're really operating as. And I apologize for the complexity of this chart. This happens to be a sanitized data slide of a very large US telco okay? And the numbers are 50,000 because I've rounded them. But this is what I call the layer level diagram. So the top left is the CEO of this company. And what is on this on the Y axis are the layers. So these are the layers of the organization, and these are the levels of the pay grades. So these are the senior executives. So when you show this but I've now seen enough of these pictures, I can look at them and see problems right away. So I showed this to the CEO and I said, Dave, who are those 20 people? He didn't know you knew a few of them. So he had 20 people, very highly paid at layer five in the organization that he didn't even know. The second thing, I actually interviewed these eight people. These eight people were fantastic workers. They had no clue what the people above them did. And you can see when I asked them, who are these managers above you? They said, I have no clue, don't know the other thing. And I'm going to come back to this a minute. Organization structures should be geometrically, should expand geometrically. But I almost always see somewhat of a normal distribution here. And when you see that, it's because they have very inefficient structures. And one of the problems, by the way, in getting to organizations like this, one of the reasons this process we're going to talk about is so critical is because most large corporate organizations have what I call the frozen middle. And what do I mean by that? Well, my first career was at nuclear submarines. So when you're a nuclear submarine and you go down to 200ft or 300ft, you can be in sea State five and you don't feel a thing. You're on the surface in sea state five, everybody's getting sick, you're tossing on top of the ocean. Most middle management is at 200ft. So we had to have a process to penetrate through that organization. So there are two things I already mentioned. One of these, the geometric nature of organizations, that organizations expand geometrically. One of the insights that I think we have here is that we needed a process that expanded geometrically, not linearly. Most other practitioners had tried to redesign organizations with a linear process or by providing more and more consultants. Well, that was failing. It doesn't work. The second one. And there's a concept in chemical engineering which I love called Le Chapgier's Principle. Le Chapgier's Principle says if you take a system in equilibrium and you apply a force, the system will rearrange itself to relieve the force. So this whole concept is based on these two things. So this is the point, by the way, if you think about the geometry of organizations, if you had a span of control of nine, you could manage 600,000 people with seven layers. Most organizations, I find, have ten to twelve layers and medium span of four to five where the optimal would be eight to ten. Or in some cases, like some companies are using technology effectively, they get the span of controls of 15 to 20. And we rarely see organizations that are of course this small. Now, this is the Lashati's principle point. So the idea of the process is to design a set of forces on the organization and think about it as a differential equation. So you're setting up this differential equations. What you're really doing is setting the initial conditions and just pushing go. And if you do it properly, everything will happen appropriately. So one of those, and the top one is the most important, is CEO direct involvement. Two thirds of the time that I do this diagnostic, I do not do the process. And the reason is because the CEO is not willing to make tough decisions. Others, transparency, everybody sees everything, peer pressure. So I'll describe a bit of how the process actually works. Principles, I'm going to come back to that in a minute as a mechanism. Visibility to results, fact based analysis and all these others. So over time, we've defined these processes to be very specific. Now, so what is this? This is important. There's two roles that a consultant can play, I find can play effectively in an organization. One is an analyst to put the facts in front of the client and show them the truth. The second is a catalyst. And just as in the sense of a catalyst, which is something that accelerates a reaction but doesn't take part, and that's the key thing. It's actually one of the things we've done at BCG over the years is move to a model of enablement as opposed to direct engagement. It's very related to some of the things that we were discussing earlier around visible and invisible forces. So this is a cascading process and this is where the geometry comes in. So it starts at the top cascades a layer at a time through the organization. And that's how the organization is redesigned. And I'll show you some of the specifics in a second here. So this process, by the way, takes about six months to do. And when I talk to my clients and they say, well, how long is it going to take me to do this? I say six months. Well, we can't possibly wait that long. I said, you can't afford not to. And so they all want to do it within a weekend or it just doesn't work. Another concept I use a lot is organizational momentum. Organizations have a mass and a velocity and the momentum of the organization. Most large companies are like oil tankers in the water and a lot of CEOs would like to believe they're on a speedboat. So they're left full rudder, right full rudder. And by the way, the crew standing behind said, what's this guy doing or Gal doing? Because the ship just keeps doing this. So again, another concept to think about is how do you change momentum of an organization? You take the first derivative with respect to time. So you have a change of mass with respect to time times velocity plus the change of velocity with respect to time times mass. That strategy. The first one is changing organization. So anyway, we start with a fact base to find out what the picture looked like. A lot more like more than I showed you earlier. Then we develop a new operating model for the company. And this typically involves a new design. So in one case, we took an organization from a very functional organization. This is an It services organization of about 130,000 people. And we went from a functional organization to a matrix organization over this period of time, which became very different. It was a challenge, but it worked very well. Then we outlined the process, everyone to buy into it. And then we start the cascade top down. And it's very lonely. One of the clients I did this with about 25 years ago was a major airline. And my client I'll mention was Bob Crandall at American Airlines. And Bob is one of the smartest CEOs I've ever met. But he and I sat for literally a month going back and forth with designs of his layer two. And he's a very decisive guy. So he makes decisions and then the layer two then does the next layer and so on. And so this is a typical process. Now, I mentioned earlier this was the telco situation. This was a large, greater than $50 billion market cap company revealed the picture I showed you earlier. Multiple layers, low spans. We worked with senior executives to redesign the structure. And then we did this cascade. So I'll show you now the before and after picture. Not yet. The other thing that's really helpful in this process is using a set of principles and a set of guidelines. So think about it as the constitution and the laws. So we begin by with the senior executives setting up the principles for the process. It's one of these forces I mentioned. And then we have a set of rules and any violation of the rules, any exceptions to the rules, and there are many exceptions, by the way, because we want to make the right decisions for the organization, not just some algorithm. But any exception has to get surfaced up to the senior management team, typically the CEO and his layer two. And so there's a natural force that nobody wants to ask for exceptions from their boss. And so it has a tendency to stop a lot of the exceptions. So this is an example set of principles. And again, I'll just pick a couple of these. These are very high level, so things like all decisions are subject to senior management approval. That's why this exception process coming up. We'll deal in open and direct fashion. These are about cultural change. I should mention we talked earlier about culture. One client we did this with, we did a cultural diagnostic before we started the process. And what we found is that they had a passive aggressive culture. So the management in meetings, they'd all be really nice to each other and the meeting would break up and then they all talk behind everybody's back. And so we saw that, we recognized, we took it to the CEO and said, look, you have a real culture problem here with passive aggressive behavior. So one of the things we did in terms of this cascade is filtered out the people that were extremely passive aggressive and it changed the culture after the process is finished. The last point, by the way, is really important is any violation of these principles will require a change in the principles to proceed. So the only way you can violate these is to change them. And so for somebody and by the way, sometimes people do come back and say, well we didn't add one or we need one. And if the group agrees, we add the principal to the group. These are the design lists. You'll see, these are much more specific things like managers will have a minimum direct span of seven, VPs will have direct reports, so on and so forth. These are things where at the design level, when someone's designing their organization, they actually can ensure they're hitting these criteria. So now I mentioned this cascade. So here's what happens in a cascade. In a cascade, one cascade typically takes five to six weeks. It starts on Monday morning of the first day with a leader coming in and saying, okay, you are my team. I've chosen you. Here are your roles. Now your job is to design the next layer of the organization. So the first thing they do is structure first. Because what I found over the years, people want to design organization around personalities and individuals. So we start with structure first boxes on the chart. So that takes about a week and a half. They come in and perfect example, that telco example, the head of network came in to the CEO and said, well you don't understand our organization. It's highly technical. I only really can have four direct reports. Now the CEO basically said, well I'll tell you what, let's meet next week and if you can't have seven to ten direct reports, I'll find somebody that can. Now why is that important? Because let me just give you the example. I'm old enough to remember the Ed Sullivan Show. I assume some of you are as well. So there was a great act that people spun plates on a stick. And watch these guys and they are good managers. This is very binary, but they're managers and they're doers. So managers are the people that know how to spin plates. And you watch, the guys are really good at this. They get the plates up, they step back, wait till nobody's Wobling, and they put another plate up. And they do that until they're only running back and forth, keeping the plates up. Well, that's why leadership and management is about having a high span of control. Because by the way, if you go too far, plates fall. And the worst thing though is when somebody has only two plates, the manager's doing this and how does the plate feel? Over managed. So you got to have this larger span of control. So the second part of that so then we decide, okay, here's the structure, it gets approved. Then we have people choose the candidates. Typically like to see three candidates for every box on the chart, rank them and then choose who is in that organization. Now the challenge here is if you don't take a slice off the pyramid, all you effectively do is push everything down. And so in union organizations, you have no choice but to do that. So you have what I call a bump and hole, which is if somebody doesn't make it this layer, they're automatically going to get a job below them and that's going to cascade all the way down till people, the junior people, leave the organization. That's not optimal. The other thing that's not optimal is what I would call bump and out, which is nobody at this layer gets a job at the next layer down. But generally speaking, this requires a lot of tough decisions by management is you have to outplace people through the slice of the pyramid, which means very senior people are leaving and back to that middle management problem. Middle management is leaving too, because otherwise frankly, one of the things I found over the years is if people promote more of the junior people and give them more of a challenge, the organization becomes much more dynamic and much more effective. Okay, so this is the picture, by the way. This is the one I showed you earlier. And that's the after picture after the process. So you can see lot fewer Spanic control. You can't see the Spanish troll in here very well, but you see many fewer layers. It started with 14, we ended with eight. And this now is more of a triangular distribution as opposed to a normal distribution. And this is an important point. This was the point I was making earlier about the fact that this organization was able to make a decision very quickly. It would have taken a lot longer if they had the previous structure. Common pitfalls. Okay, I already mentioned one, not getting buy in by the CEO. Got to have leadership on board. People try to attempt to put a lot of process and systems in this fact, one of the things I've learned about this when I first started doing this 25 years ago or whatever, I did an extensive diagnostic of figuring out what all the activities in the organization were. I created a relational database of customer, supplier and product internal products and external products. I could create de average targets. And when I realized you don't need it, the people in the organization already know what's valuable, not valuable. And so I've gotten to the point where now I just have the organization make the decisions. So that's it. Let me stop there and open it up for any questions.

Speaker A You said that this only works for 50 to 30,000.

Speaker B If that's what I said. I just spoke it does scale. In fact, one of the reasons I divide this process is because it scales geometrically. So I've been able to do this with organizations up to 300,000 people. One of the things that's important though is having these forces in place is really critical all the way down and you do get some attenuation. So it's very important to start at the top and really make sure. So when you start at the top, by the way, some of the leadership team small groups is why do we have to go through this rigorous process? The answer is because once they go through it, they force everybody else to go through it. So your point is good. It is very scalable and it scales to fairly large organizations. Is there a minimum? The minimum to me is setting up a process like this requires a lot of tension, it requires data analysis and so on. So I would say anything above 20,000, I would use this process. The way I think about it is anything I could do in a spreadsheet I wouldn't probably use this process. I was saying you use the phrase or the term operating model. I just wanted to check what components you're thinking about when you're talking about operating model. Okay, good question. So when I say operating model, I encompass a couple of things. Basically the strategy of the organization. And so that's why I mentioned adaptive strategy and so forth. So it's the intersection essentially of strategy, organization and how the company operates. So the way we think about strategy is there are position advantages and capability advantages. And so we look at what those position and capability advantages are for an organization and then we try to optimize the strategy for competitive advantage and then organize around that.

Speaker C John, question up here. Yes, thank you for the presentation. We talked about no individual contributors above level four. And then one of the reasons for forcing a larger spend of control was if you only had two reports you would drive them nuts with micromanagement. Is there not in many corporations really important work at senior level special projects where the manager himself 80% of their time needs to be doing that thing with no reports and actually two reports may be too many for that person. So I'm wondering about the rule no individual contributors because I know many corporations have used very senior EVPs for these special assignments which are really time consuming. So I just wondered if you'd comment on that. Because in our system we will allow individual contributors all the way up to direct report to the CEO.

Speaker B If there are these special projects, it's a great question. And what I almost always get from clients and they couch it this way, they say but we have player coach models, so we have managers who also do. And what we found, and we've done exhaustive analysis of this over the years is generally speaking and I have to care because I'm talking somewhat in absolutes, which I don't mean to, but generally speaking the player coach's model is about as effective as it was in basketball. Doesn't work. Now, there are examples to your point where, yes, you need individual contributors very high in the organization. That's why if you think about those principles, those exceptions get made. So when you have a principal scientist, for example, or you have someone who is really critical in salesforce, maybe that would go up as an exception because everybody recognizes that role, that person is critical. What happens? However, I'll give you the downside of the individual contributor problem. So that picture I showed you this, imagine this picture that started with 14 layers and had median spans of control of twelve. Why? Because they had individual contributors everywhere. It stopped the cascade of the organization. So you didn't have people managing, you had everybody getting highly paid and just filling up the organization. And so one of the things we found is important point by the way, the metrics really matter. During the financial cris, I got a call from one of the large Wall Street banks. They said, Ron, we want you to come in and do this process with us, but we want to do a pilot on one organization first. And so surprising to me, an organization volunteered. I'd never have anybody volunteer to do this, by the way. So I go in and I'm talking to the CEO of this business. I said wow, so why'd you volunteer? You're not going to find anything with us. We're the best in the world. I said really? That'll be great because I've never seen this before. And he said, well, we have average span of control of 16. I said, okay, what's your median span of control? It was three because he had call centers. He had call centers with 80 people sitting out here and they're using the average instead of the median. He got a lot of opportunity. Anyway, any other questions? Yes.

Speaker D Just think about some areas with technical expertise. And so with the assumption of a pyramid and the nature of the work, one of the things we found is in some organizations that have smart analysts that would use and that's kind of where some of the middle came from, where they really didn't need some of the lower task positions, they needed fewer the very low skill tasks. So I wasn't sure how that worked in different organizations. There might be some that would have very highly they're not managing people. They're managing projects, processes and many other things.

Speaker B A couple of things. One is that when I and again, I'm speaking in absolutes I'll show you a chart which it's in the appendix here. But the span control depends on the activity. So if you're doing something which is simple, repetitive tasks like manufacturing or call centers you could have spans of control of 15 to 20. But when you come over here to places like this gets to your point things like treasury or where you have really need deep expertise tax, for example, you have much lower span of control. So there's not a one size fits all thing. I did this, actually in an organization, one of the large defense contractors that had a matrix structure. So it had large programs for large aircraft or ships and so forth. And so we had to do this process simultaneously like that. It's really, really quite interesting. Okay, I think I'm out of time. So, John.

03LifshitzAssaf.wav

ronadmin — Tue, 26 Sep 2023 08:11:07 +0000

03LifshitzAssaf.wav

Job ID

1695715793

ronadmin Tue, 09/26/2023 - 14:11

Duration

1962seconds

Summary

- Asaf Asaf is going to be talking about NASA and then after that we're going to have Art Hoffman from Dropbox. I will focus specifically around that. How the coevolution of things that are in the microfarations of culture. And the design and redesign of the innovation process.
- Over 3000 people from 30 countries participated in trying to solve 14 problems. The nature of the process is very different temporarily and spatially. Four out of the 14 challenging problems were solved in just three months.
- You are the solution seeker. Let's think of ourselves differently. And in the paper I go deep into this transition from problem solvers to solution seekers. I showed the connection between how the professional identity work took place, the knowledge boundaries, and in the end, where the locus of innovation resides.
- It goes deep to the training of the scientists and engineers. Many organizations are now trying to change it and make this so that if they bring something from outside in, the people inside get some kudos. So this is for the future, but basically this is it.
- Gene Crant: Like a lot of companies the last handful of years, we focused a lot on change management. Part of that is dealing with resistance to change. Sometimes the folks that have achieved the most in the current system are the most resistant to finding a new system. Many managers are trying to make it so that it comes much more bottom up.
- Ken Shepard: From an organization design, it occurs to me that you need to do this model, perhaps fewer people, different talents at a higher level of complexity. Some people disinterpret it. You need less people now. You can do less. But some people actually thought, I can do more with the same thing.

Video Link

https://aioperations.cmsmentors.com/project-transcription/govideos/2015%20VIDEO…

Formatted Text

Speaker A Now we're going to be, well, taking a deeper dive into two organizations with next two speakers.

Speaker B Hilalicious.

Speaker A Asaf is going to be talking about NASA and then after that we're going to have Art Hoffman from Dropbox. So turn it over to.

Speaker B Hi, I'm Milan. Good morning and I'm thrilled to be giving a talk after this broad overview of both past, present and future of organizing. And I hope that some of the things that I saw and will share.

Speaker A With you please speak into the mic.

Speaker B You meet the mic. You can't hear me. I apologize. I will show I didn't miss much. I'm Vila and I'm very honored and thankful and grateful to be here. And I hope that in my study that I will share with you today, you will see some of the emergence that you just talked about. And we will see how the coevolution of things that are in the microfarations of culture, specifically professional identity, and the design and redesign of the innovation process. I will focus specifically around that. But before I go deep, and more specifically to the context of NASA, since this is an orbit design community, I wanted to share with you my overall research motivation of studying new forms of innovation. So in case some of you have thoughts about it, questions, cool opportunities, please know that this is what I'm curious about. And then we'll dive deeply. So my overarching research motivation around these new forms of organization comes from an historical perspective about how we organize innovation. If we just take a minisecond and go back in time a little bit and think of how innovation started, right? We have the lone inventor, leonardo DA Vinci first airplane sketch and then the Industrial Revolution hit. I'm simplifying it, of course, but basically the birth of the lab. This is Thomas Edison first lab that is still today a genie. And for the next few centuries, public and private organizations are the focus and the locus of innovation. And innovation is conducted mostly within and across collaboration of public and private organizations. They've been leading that and that assumption both in the literature and across practitioners. But recently, ever since what some people call the digital revolution, the decentralization, the increased modularization, many technological changes that I will not go into have given rise to new forms of organizations. And some scholars and practitioners are claiming that today we need to go beyond, we need to transcend the organizational, the professional boundaries, we need to move into a more open, distributed, decentralized way of organizing. One of the phenomena that gave rise to this was the open source software that for the first time, thousands of thousands of individuals distributed across the globe were able to produce knowledge and innovate as well as, and sometimes even better than the incumbent organizations in their industry. And ever since, this model has been spilling over in different ways and in different shapes to different industries and organizations. Are experimenting with this in multiple ways. Right now, as we speak, many natural experimentation are taking place. The interesting thing about it is that we know more now about what's happening in the online communities. What I would like to talk to you today is more what happens in the intersection of organizations and those online open, peer to peer production communities, what happens in the intersection of these seemingly contradicting worlds or logics, as Will talked about. And I hope that by the end of the presentation, you will see the complexity, the opportunities that lies in this intersection, the cost, the change that it takes, and we can talk more about it. So now we can go deeper, now that, you know, kind of my overarching interest and the research question I would like to focus on today is how using these open architectures impacts R and D professionals and their work. So we will look at what people do, their knowledge work, their R and D work, and who they are, because this is what emerged. Just so you know. The other things that I'm also interested right now, if you have any relevant knowledge around it, is how using these open architectures actually changes the recombinant innovation process. Since if we think about a decoupling that takes place between problem formulation and problem solving, that's something that we always knew. That the way a specific R D problem or any type of problem is formulated is key for solving it, right? And innovating. Einstein wrote about it. Newton, the way you think about a problem, if I had an hour to save the world, 55 minutes, I would formulate the problem in five minutes. Solve it. That's what Einstein said. But usually it's intertwined, it's decoupled in the field. It's hard for researchers to study those because the way scientists or engineers think about problems or managers is intertwined with how they solve it. But in these new settings, these are actually decoupled. And essentially it's focused now completely on formulating the problem and then expecting someone else or many others to solve it. And I see that that's actually where a lot of the performance of these models work. It works much better when there is some work on the problem formulation side. So that's another aspect. And, of course, boundary conditions of these new models. So when does it work? When does it? It is across the different stages of the process of innovation. So we'll start with the first question, and I'll tell you why this is interesting, kind of for me, theoretically, when I first went into this, since most of what we know in the literature about R and D professionals and what they do is that they resist opening their boundaries. We know that they cross boundaries, they bring knowledge across organizations, across disciplines. But then they work on a project with very well defined boundaries. Who's in, who's out, what is in, what is out? And we know that these are important and contested area, a lot of fights. The work of Paul Carla Bospetsky and others on these boundaries of work and all the work from sociology and professionalism literature shows how experts particularly build almost fences and walls against the laymen and not willing to kind of this is what I do. So if you think I'm the Abbott's work, the heart of the theory is around the task and the problem and gaining legitimacy and jurisdiction on these problems. So opening these problems for anyone to solve, as we will see in this open innovation model, goes against the assumptions of these theories. But on the other hand, we know that the web has been challenging a lot of the assumptions around permeability on boundaries and many theories have been calling for more research. And I hope that you will see this study as the first step in understanding what is the permeability of boundaries and then how does it affect people and their work inside organization. So this is an in depth field study. This is the first paper coming out of my dissertation. There was a long, almost three years in depth longitudinal field study at NASA. These are all the cool pictures. I don't know if you can see me there standing near a lunar rover, but these are the cool innovations that took place while I was there and just taking field notes. But this is what happened in three years. And just to give you a sense of the type of data, I collected a wealth of qualitative and quantitative. So they'll focus on the qualitative data observation. They were very open and nice to let me join the lab, shadow people, observe people working meetings. This was crucial for me to see the change that I will soon describe for you and to be in all the work meetings, specifically the Space Life Science Division and the 14 labs audits interviews. I interviewed more than 100 people in different periods of time, especially multiple times. It was important to keep track of the change, and the internal document surveys were crucial. So it was important for me to see what they talk about in meetings, what they do, what they talk to me. But I could not analyze the change in their work if I didn't have those project documents across time. So I could actually see if something has changed after this experimentation with open innovation in their project work documents and their internal work. So we will focus today on the Space Life Science engineers and scientists, a very kind of typical life science organization, but doing that in space and look at their perspective and how did they experience this open innovation so briefly to describe what is this open innovation in this case that took place? So space life science division did a brave thing. I realized now, compared to other organizations that they said, we hear all this talk about open innovation, we don't know exactly what it is. How about we just try posting, opening our strategic problems? We had a strategy plan for this year. How about we keep on working on it in the same time in the way we do? We have collaboration contractors and in the same time we'll try to put it online in all these open innovation platforms and see what happens basically for a year. So it's kind of this parallel simultaneous effort to try and solve this problem. This is space life science division. That's their structure guideline. And I'm trying to show you the type of scientific and technological problems. So these are strategic and that's what I mean to rephrase because many organizations just open kind of a side problem to the crowd, but not really their strategy problems. So these were their strategic problems ranging from different disciplines. You can see scientific and technological and they posted it on three of the most leading global innovation platforms. If you know InnoCentive, a lot of scientists and engineers and different professions on this platform. Around 400,000 members yet to come, more technological focus, also between 200 and 300,000 members and yet tope coder in the end, which is mostly software and programmers and type of kind of computer science professionals. So they did that. It took them not a lot of time and it felt like a different process. And since this is an.org design conference, I just wanted to give you a glimpse of the design of the process and how different it was and how it was experienced. So they kept on repeating oh, this is a whole different way. I can never do Texas accent. I don't know even what my accent is. But imagine that in a Texan accent of doing business. And I was trying to keep the dimensions of how is that different, what is exactly different, where is the tension, et cetera. So speaking about boundaries, talking about the standard R and D process, we know how it works here. It was undefined. They didn't know who's going to come and solve it. Sometimes they're asking is it open to anyone? It is completely anonymous. People can choose all these platforms. You don't know where this person comes from geographically, what are their level of education? Nothing so unlike the expert driven model that we know in R and D. That's the dominant model here. Anyone, the relationship, the nature of them is very different. On the open online, it's this minimal consent, 2 seconds. You don't have the negotiation, the depth, the knowledge of each other, which you have in R and D projects. The hierarchy of the process is different. The level of control is you don't know how they're developing their answers, what they're doing. You can check up on their back and you can test it as they're doing their work. And of course, the nature of the process is very different temporarily and spatially. R and D processes are usually long here, this was chunked into three to six months problems. And the spatial geographic distribution, of course, is very different as well. So to give you a sense, what happened after three months, only of these 14 strategic r and d problems. So over 3000 people from 30 countries participated in trying to solve these 14 problems. The interesting thing that came back is not just the amount of people. And granted, they said it's NASA, so I'm sure it attracts more people than usual, but usually that's the case if you have a small amount of people inside your organization versus a huge crowd that is interested in solving, but they just think they were the solutions. So four out of the 14 challenging problems that they were still working on, as I told you, this was a year long experience, and only three months have passed. And they were bringing experts from outside doing workshops, but four were solved, basically. Specifically, I'll tell you about one that is known, and you can google about it. It's known as the home run of this experiment. It's around predicting solar flares. I don't know if you know, this is a picture from may this year. So solar flares are a big risk. And we're basically now in predicting solar flares where we used to be a century ago, in predicting kind of earth storms. So people sit in their control rooms, they see gamma, beta. In 24 hours, they just start shouting, okay, shut down, shut down, let's cancel the mission. Cancel this. It's regularly risky radiation burst on humans, on equipment. And of course, it can go all the way to satellites. And then we're all done basically here. If we don't have satellites, we can't go into it. But it's obvious specifications both society and the military. So it's a big problem. Okay, it's a problem estimated around $800 billion a year. People work around it in the whole heliophysics community beyond NASA. This guy, if you can see him there, that gave me the permission to show the picture that he shared. Bruce craig, a semi retired radio engineer from rural new hampshire, solved that in less than three months. He's a radio engineer. He's not ideal physics. He brought a different model from radio engineer field in japan and triangulated it and made a discovery. So before they had a 50%, which is like tossing a coin type of prediction model in 24 hours, he brought a model that worked in 75%. The NASA folks tested it 80% to 85% variance. So this was a huge storm. This is the picture that he presented when he got an award in the white house of office of science, technology policy. I won't get into the details, but this has made things go on fire, of course, and literally, and people were excited, and the managers got attention, and all of a sudden, obama writes something about it in his memo. But what happens to the people inside okay, so managers get attention, resources. This we can talk about on a different day. I want to see what happens with the people inside. And they were first just surprised completely. This is the head of this unit and he said this has spun up so fast here and it's caught everyone of Bars turnaround time for solution like this could take years. And then an interesting process started, kind of unveiling. So the manager said, okay, this is great, this is working, it's fast, it's cheap. We get more research, more attention from the headquarters. Let's do a year as fast. Let's do our next strategy meeting and decide what to open. And on that day, on that workshop, I can describe to you the tensions and fears and crazy things that people started telling to each other in this meeting. And it started around budgets and stuff like that. And then it started getting really emotional and deep. And people were saying, what value am I? These things? Every time I have a problem, wanting me to put it out there, it's like slap on the face. We were trained this goes against what we were trained and modeled to do. The history is the scientific method goes against it. People talk in our training, I'm supposed to solve problems. I take this. We work together. So every time I have a problem, just post it out there. It's like cheating. What am I here for? I came to innovate. I want to go. Some people say I want to be open, I want to be out there. I don't want to be employed by anyone. I want to sit at home and solve problems all day. So the more people started talking about why they came, I started going into this. I won't go too deep into the artifact, but I could this narrative analysis and of course it's known and also the data shows here that there is a very clear hero figure of the problem solver of the innovator. The thing is, with this open innovation model, there was no clear hero figure and people could interpret it in different ways. And that's what took place. That's the emergence part that started taking place. Some people said, okay, I'm protecting myself from it. This is why I'm here. This goes against and we'll see how it obviously made them resist this model or adopt it, but only on the surface. On the other hand, some people said, wait a minute, this is about the big agenda. This really works. This can help us solve. So how about instead of thinking ourselves as problem solvers, let's change the way we think about ourselves. And this all happened in arguments, in the labs, in meetings. And one pivotal moment took place when a senior scientist said who cares? Enough with this argument. The solution may come from you, from your lab, from a collaborator, from an open innovation platform. You should not care. You are the solution seeker. So let's think of ourselves differently. Let's build ourselves differently. And in the paper I go deep into this transition from problem solvers to solution seekers. And I show that people that protected their identity also protected their knowledge and boundary work. And they did not bring in this knowledge that was found unfortunately, outside all the solutions. They did not put them in the R and D process and the knowledge that they have inside that did not openly share. And on the other hand, those people that started this emergent profession or refocusing work on being a solution seeker really dismantled their knowledge boundaries and made a deep change in their R and D design and structure. And to give you a quick quote, the people that did dismantling talk about it as a shift from thinking about the lab of my world, when the world is my lab. Some of them even left their level. Just quickly show you what do I mean by dismantling? So they started thinking of what it is in their knowledge production that they can open from within and outside. So I look at knowledge closed from internal knowledge out and external in. So an example about the data, they started thinking, okay, we only set the problem. Maybe we should open it from data that we have. And this is sensitive data. Some of it are regarding astronauts health. They found ways to quantify it and open and share it in the process. Quickly, I'll just show you. If we talk about artifacts, some people left their R D units and asked to open a new unit that you can Google it now it's called Opennessa. They don't have any research inside NASA anymore. So those are the people that talk about the world is now my lab. All they do is outside of NASA. So I looked at the external knowledge and as this mentoring work took place, it was integrated and how the internal knowledge goes out and the resulting locus and focus of innovation that went outside of the boundaries. And I basically mapped those different behaviors and I showed the connection between how the professional identity work took place, the knowledge boundaries, and in the end, where the locus of innovation resides. So that's the gist of the process that took place. I apologize. It was very fast to try to summarize three years of these people's life, but some theoretical interesting issues that come out of it. I think that we see that organizational members do no longer function only as knowledge of kambernators or kind of gatekeepers. They also change the boundaries of the organization. They prefer it, they dismantle them. It has decomplication on this professional versus layman and how do they think of themselves? Of course, having the identity as something that explains a challenge was even a surprise for me, as I was kind of in the field. Understanding that actually how people think about themselves is crucial for what they do and the structure of their work and processes. So this relationship I think, is just very interesting and it's to be explored even further. And I hope this gives you a sense of this complexity of what is the next way, what are those new forms of organizing and how do they imply there are many implications that I will not go into it. But what does it mean about that tradition, the incentive system? Many organizations are now trying to change it and make this so that also the people that if they bring something from outside in, the people inside get some kudos and credit for it. There are now co authored scientists that co author things with Crowds with Crowds. And even about the training. It goes deep to the training of the scientists and engineers. There's now one course that is starting to pick up place in Harvard Engineering that is basically teaching engineers not to code everything by themselves. They have to have part of it open source with the system. So it goes deep to are we training people just to work by themselves and be the problem solvers or constantly work in this more open way and can go deep into it? And of course we have some new cases and some other people that are studying here in the room that look beyond R and D professionals and even about ourselves. I know some colleagues are doing some stuff about our role as professors and with open education. So this is for the future, but basically this is it. So the transition. This is Gene Crant. I don't know if everyone remembers the Follow 13 movie. So this transition from Houston we have a problem, to NASA posting the problems and the world is saying, Houston, we have a solution.

Speaker A Like a lot of companies the last handful of years, we focused a lot on change management. We talk about design, but it's on paper until you actually put it into practice. Part of that is dealing with resistance to change. And we'll talk about sometimes the folks that have achieved the most in the current system are the most resistant to finding a new system. I love a couple of comments you said about or some quotes about where does this lead me, what value do I have? It's like I'm cheating. Did you see any commonalities between those that maybe had a harder time with the change versus those that were open and excited about the opportunity for sort of advanced innovation?

Speaker B This is a great question. So I was looking for these changes because in our world we think that maybe things can be explained. What people do by their gender, status, power, incentive, many things. And none of them in this case and I try to test each of them and none of them in this case really showed a difference, I think, in this specific case. But what I hear many managers take from this is the way it is framed, the way it is even narrated. So in this specific case, the open innovation thing was not it was not thoughtful in the sense that the manager didn't come and say this is X or this is Y. They had this experimental mindset so it left room for interpretation bottom up. And also, to be honest, what happened with the manager. They were so scared by all these fears and tensions and fragmentation, so they backed off for a while. So that's why it left actually room for this to emerge, for those that want to pick it up and for those because they were just this is too much for me. It's a political price I'm paying for this change and I'm not sure it's worth it. So they went to headquarters and now headquarters has a whole new thing. But you have it. And that's what I see in many organizations. They say, okay, let's create it, let's do it somewhere else. It's too hard for the people from inside. But basically I know that many managers are trying to think of how to make it so that it comes much more bottom up and that there is room in the way you narrate and frame the change plan, whatever it is. And you don't say kind of where does it leave the professionals? Are they still the hero? Can they re narrate themselves to be the heroes of whatever their work is? I think that's something I hope people can do because in the end of the day, we need a sense of meaning in our work, regardless of which profession it is.

Speaker A Thank you. I was wondering, from an organization design point of view, could you talk about how the people inside NASA who were engaging with the outside sort of structured themselves and set themselves up so they could accommodate all of this stuff and prioritize what actually looked like was going to be valuable?

Speaker B Anything specific you are interested about? Just almost.

Speaker A If you've got a part of the organization that's doing open engagement, you're getting 3000 people contributing ideas. How does it set itself up to actually work through those ideas, decide which ones to progress, et cetera.

Speaker B So as I mentioned in the beginning, there are new capabilities such as how do I formulate the problems now? How do I make it efficient? Right? I don't want to be flooded by the crowd in that sense. So bear in mind 3000 for 14 problems. So most people had and these are short solutions. So one of the things that they are now building, these capabilities and new skill sets. So this being a solution seeker is different. It adds a layer of knowing how to formulate the problem, how to search. So they build this model of degrees of openness. They think these open systems are constantly changing. So it doesn't have to necessarily be an open innovation platform. One of the beautiful stories that took place in the end of this study is that someone on the weekend actually Googled and at the end through YouTube found a medical device, an engineer that was not even in part of this experiment in the first phase. But she was in all these workshops and she know instead of developing this medical device that we need for a strategic problem that took place all of a sudden she said how about I just search for it a little bit before? Didn't even posted it. And she found this physician who developed it for going remotely to his patients and actually it's now in the International Space Station. It was tested. So it kind of changed their mindset about starting outside first before they go in and develop something. But it's a new mindset in that sense.

Speaker A Very much for this interesting presentation.

Speaker B Who owns the intellectual property rights of the solution? Who owns the intellectual property rights of the cartilage? Bowling is here. She can tell you much more about the It impact of this whole new way of organizing in these specific platforms. It's relatively simple in the sense that they found a way to basically once you decide to accept the reward, you give it to the company. I can tell you that the legal folks in any of the organizations I'm studying are having a really hard time with all these open systems. In my past I was a lawyer, so I have little empathy, but not really because they really ruined innovation in the end of the day. But there are few now legal scholars and practitioners that really understand that there are shortcuts today and so far there hasn't been any mega lawsuits or anything to deter people. So once there is one kind of more advanced person in the legal department, usually it goes through, but in the beginning that's what the managers were working. How do we get legal on board? How do we get procurement? They were not thinking about standards and the engineers in that sense because they were so worried. But it's new in that sense, a.

Speaker A Clarification if you could give it to us. I'm a little unsure of the difference between sharing your knowledge with other people and the idea of as an organization sort of sharing the problem. And this came to my mind when you talked about the person who solved the whole problem of solar flares. That was because the organization shared the problem. I didn't hear that there was shared knowledge that enabled this person to solve the problem. So again, how do these two ideas, these two concepts work together and how is it reflected in this one person who solved the whole problem, apparently by themselves without knowledge from other members of NASA?

Speaker B When you said not knowledge sharing, what just exactly do you mean? What type of knowledge sharing? The fact that he didn't see the previous R and D work on this problem, for instance.

Speaker A That would. Be an example.

Speaker B Yes.

Speaker A There was nothing that you said that indicated that he had seen knowledge from other people.

Speaker B Yes.

Speaker A So he was the recipient in the organization with the beneficiary of problem sharing, but not knowledge sharing.

Speaker B And in the internal knowledge opening, I would say I look at these different I think of it as kind of across the R and D process. So I think you start usually with some data and from there you either research it in a lab or depending on what type of work they do. And I would say sharing the problem, sometimes it's very hard, but it's definitely not the whole process. So it's almost the end sometimes of the process. When you have a defined problem and even when you share it, there is a level of how much do you share of the prior history and prior attempts and failures that were there. And I see a variation across that. So some groups really tried to say don't try that, this has failed, we don't want that. And they try to kind of summarize sometimes five, nine years of R and D work into a two page problem formulation. Those that went deeper, that's the full dismantling try to open and share the knowledge from the moment it's created from the data and the analysis, and keep on going through wiki kind of platforms that every person, even when they know or learn about a new medical device, they post it. So the intra organizational platforms are no longer only from intra organizational members. They work on Wikipedia platforms to make it open to anyone. So if that scientist again wants to solve another problem, he will not only see now the end of it, he can actually see the knowledge as it's progressed, but that's only in the extreme version of full dismantling. In those that do what I call perforation only kind of hybrid, they only share that part. They still make sure that they have control on what they share. It's really scary in that sense for them to share their ongoing day to day.

Speaker A Thank you. One more question.

Speaker C I'm Ken Shepard. Thank you very much. From an organization design, from an HR manager working together, it occurs to me that you need to do this model, perhaps fewer people, different talents at a higher level of complexity. So it's an.org design, it's a role definition problem, a recruiting socialization problem, and it is an organization design problem. So if I were one of the people who was used to working in the lab, I would feel very threatened because I would see the implications, fewer of me are needed of a different type than me, maybe a higher level of complexity. Do you have any comments on that?

Speaker B I sometimes have this funny sometimes when I finish to executives or even with friends, I say what would you do? And kind of people split in the audience. And I can see that some people are like even now, when we're talking about open education, many people say, oh, people will take my courses and then they will stop coming, and it makes me obsolete. So in the data, not speaking about what I think, but what people thought and did, that's the thing about living. You have room for interpretation. So some people disinterpret it. You need less people now. You can do less. And some people actually thought, I can do more with the same thing. And I have new so my role has changed. It doesn't mean they do not need me anymore. Actually. I can build new capabilities that are important and needed. So I think there is a lot in this role, crafting and reframing that people it's not a clear cut. So I wouldn't say some organizations really sometimes decide to lay off some people if they want to change their R and D. So I hear why? I mean, it's a scary thing. It is to say. But still, those people that decided to embrace it decided because they think it can empower them, it can enhance their capabilities and not only diminish and disrupt.

Speaker C So in the Age of the Smart Machine by Susanna, when it changed, fewer people, different times, that's what occurs to me. So I don't know, maybe we need to look at what happens a couple of years down.

Speaker B Yes, this is ongoing. That's why I say it's, like in the field right now.

Speaker A Thank you very much.

11Reflections.wav

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11Reflections.wav

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Duration

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Summary

- We do sort of set aside this last bit here for what we call reflections on the day. It's really a chance for everyone in the audience to kind of sort of reflect on what's occurred maybe across presentations, across discussions. And to sort of get us started, I've asked Rich Burton to maybe offer his thoughts.
- Network scientists are grappling with in an activity called community detection. It's a computationally very hard problem to find clusters of things which are fully self contained. The complexity in the system is what keeps the problem alive.
- A lot of the conversations today have been about design as getting people to do that which cannot be enforced. Where do you draw the line between that and brainwashing? Where's the ethical line here?
- There are two theme areas that might be interesting to consider in the future. One is comparing and contrasting the methods and dealing with this future. The other is the idea of emergence. No matter how much planning or control we try to build into the system, there is going to be this kind of emergent.
- New forms of organizations require people to redefine their identity. Many of these adaptations to new organizational forms require decentralization. Technology is allowing this real time, face to face problem solving both inside and outside of organizations.
- Thank you again to the organizational design community and Simon Fraser University for hosting us. The drink tickets are available here, so please do stop so we can they have been spread. And we'll see you next year in Anaheim.

Video Link

https://aioperations.cmsmentors.com/project-transcription/govideos/2015%20VIDEO…

Formatted Text

Speaker A Wraps up the formal part of the program in terms of presentations. But we do sort of set aside this last bit here for what we call reflections on the day. I don't know quite its genesis, but it seems to be a good thing. And it's really a chance for everyone in the audience to kind of sort of reflect on what's occurred maybe across presentations, across discussions, and either offer a comment or an observation or maybe even a question for one of our speakers or maybe even for our academic audience who are thinking about research questions. And to sort of get us started, I've asked Rich Burton to maybe offer his thoughts on the day.

Speaker B Well, I think this has been a fantastic day and one of the things that comes across, at least loud and clear to me is that organization design is complicated and it is not easy. One of the concepts that well known in organization, if you like, is the differentiation and the integration. And there are sort of two sides of the same coin and that's namely we have to worry about what each of us is going to do, but then we have to worry about how we're going to put it all together. And we have been typically, if you think about most of what we talked about today, was the real difficult problem. And that's namely the integration is namely, how do we put it together? And so one of the things I'd like to talk about just for a second is the integration of ideas and then the integration of, shall we say, tasks that we have. And just for argument's sake, is that we have divided the world into research, teaching and practice for the most part. And that part of the fundamental of why we're at ODC. And what I heard here today is the world of research, teaching and practice is not differentiated. It is highly integrated. It is much the same, shall we say, task. And one of the great things that I heard was that although we have different jobs, shall we say, in research and practice and so on, we were all having a conversation, we're all listening together, and the amount of commonality in terms of the fundamentals is really important and came across, shall we say.

Speaker A In.

Speaker B Depth in all that was said. Let me change this slightly and then we'll open it up. Is that what is the organization design? Well, as I've said before, it's very complicated. We've all agreed about that. And one of the contrasts, but also the integration differentiation, but also the integration is we started out with talking about culture, values, identity and so on. That kind of language has been more academic. But then it was also very apparent, as all the practitioners she always say talked about, that we're doing, but they didn't use quite that language to the same degree. The other side of organizational design, which in some sense has been part of our literature and is very much a part of the practice, is namely dealing with, shall we say, uncertainties interdependencies. What are the tasks, what are the communications, what does a team look like that we just talked about? These organizations are large, 100,000 people, but they're also very small in terms of teams and how do I get a team to work together? So I think that what I would suggest is that we have had too much differentiation both in terms of tasks across organizations and institutions. And that fundamentally, what we found out is that we have integration on a whole bunch of dimensions. Integration, shall we say, with what is organization design but integration across our institutions that make up the membership, shall we say, of ODC, that's really, shall we say, a very high level of what I've heard today. But I think it's been really a fantastic day.

Speaker A So we can open it up to other comments or questions or thoughts.

Speaker C Thanks, John.

Speaker D I had one quick observation and then one question. So the observation is a follow on to Richard's point about organization design being very complex. So you might appreciate this because there's a reason and a way to think about this complexity now that I find quite persuasive as to why the problem really exists. And it goes back to this picture. So Stefan Belizier asked a very interesting question why don't we just put all the same colors together? So it turns out that this is exactly the problem that network scientists are now grappling with in an activity called community detection. They even use the language of modularity to describe these communities. And the answer is it can't be done. It's a computationally very hard problem to find clusters of these things which are fully self contained with no interactions between them or with very few interactions between them. Even so, the moment you say the system is not decomposable, you can't solve this problem. And the fact that you can't solve it means we have a job, right? Because if it could be, you'd be out of a job. So I think the complexity in the system is what keeps the problem alive, one and one that engages and interest and also provides gainful employment to all of us. Then there's the question, which I think is, based on my admittedly limited sampling of the sessions today, I had to.

Speaker C Be in and out.

Speaker D I get the strong sense that a lot of the conversations today have been about design as getting people to do that which cannot be enforced. If I think about structure and culture, if I think about essentially what the last two gentlemen spoke about, which is really institutionalizing boundary signing, that's what they do. This is really about using design principles to get people to do that which cannot be enforced contractually. And that's very powerful because on the one hand, of course, the new contracts were incomplete and you have to be very naive to think design is just about designing contracts but the moment you get into the world of making people do things you can't enforce where do you draw the line between that and brainwashing? You start engineering with the references for instance. Some of the structured culture discussion was quite close to that issue I think. How do you get people to endogenously change their preferences to align more strongly with their group and community? We do it all the time. We call it onboarding as we call it. Where's the ethical line here? So how far do we go down that line? When do we know we're interfering with free choice? Is free choice an illusion? Maybe we should be worried about this. So I think it's a very interesting question for us to think of as a community that if you see our new role of design, not as being finding the contract that forces people to do what we want them to do, but of their own volition. But now redefine it as coming up with instruments that make people do what you want them to do, even if they didn't start out wanting to do it. And they would do it even if they're not watching. Right. And that I think is kind of a tricky question for us to think about.

Speaker E Just wanted to follow up on that point going to a point you made about value integration in terms of integrating values and how the conversation around social enterprises and goal alignment where there seems to be tension between social and economic objectives. I just thought this you mentioned there's a model that looks at value integration as a sort of softer mode of integrating potentially competing objectives. So I just thought that was an interesting point that could really bring social entrepreneurship and that kind of context into all design.

Speaker F It.

Speaker G I think this is my third meeting here. I think the format really worked very well for me. The senior, the junior in the business, I was energized by that. And the whole planning is very impressed with. And so I'm here representing an organization I would encourage. I would come back and try to bring several people from our organization. There are two theme areas that occurred to me that might be interesting to consider in the future one of them comes out of Mark Lascolla's presentation and the effort to bring together is to invite people I mean the Goldbrech star model was mentioned and other the Requisite model was mentioned, sociotech was mentioned. I think to explore some of that commonness and difference in dialogue before this group would be very interesting. So I think those could be running conversations over time because we see much of it complementary, but it's important to see why and where the areas are. But I think that would make very good dialogue. And I know none of these methods are taught purely in many academic settings, so I think it might be enriching to those who do teach design to hear something about these. So when they do mention them, there's more background. We have a former dean at Asper who said, no particular system is ever taught. Even when it becomes madly popular, we still don't teach quality at the University of Manitoba business look, quality has done everything. We don't teach depth, we don't teach any approach to management design. We always teach this broad survey, so no students ever learn any of it. So anyway, that's one theme. The other theme comes from reading a book right now called Rise of the Robots by Martin Ford. One line 50% of all job categories in North America will be substantially automated in 20 years. That single factor has massive implication for the size and design. I mean, retailing, I mean, think about it. Truck driving, cabs transportation, self driving. This has such massive implication that organ designers and HR will totally have to redesign ourselves to know how to redesign these organizations. I don't hear it in any circles on design of this extraordinary, fast impact of technology, except we have to talk to each other digitally. That's the only impact I hear. We all got to be connected and work in real time. So those are two themes. One, comparing and contrasting the methods and dealing with this future, which I feel coming on.

Speaker F US.

Speaker G Had an amazing clip.

Speaker A I just want to respond to fish and then I'll give it to Ray. I don't think we have to worry so much about the control, because I think one of the other themes that came out was this idea of emergence that no matter how much planning or control we try to build into the system, there is going to be this kind of emergent. And whether that is the culture or the conflicts going on in the organization sort of counteracts that. And ultimately, I think there's an attempt to sort of get an alignment there. But because of, I think, the nature of organizations and this contrast between the structure and the planned and the emergent, it's never gonna get never going to quite get there. Thank you.

Speaker F So much, participants today for a very stimulating set of presentations. When I think about themes over the course of the day, I've heard several people talk about new forms of organizations that require people to redefine their identity. So Hilla's presentation was about NASA scientists redefining their identity as what you call problem definers or problem. Well, they were problem solvers. Now they're what, problem specifiers, solution seekers, whatever. And then this Walmart presentation was about getting functional managers to let go, I think, so that people lower down can communicate directly with each other without using a hierarchy. And so many of these adaptations to new organizational forms require, I think, in general, decentralization, because we live in a world of people who've used Facebook and Google and Pinterest and you name your favorite social networking site where anybody with a smartphone is not a consumer of media. They're a co creator of media with everybody else and they will not accept detailed instructions coming down a hierarchy that they just have to follow blindly. And so when we live in a world of people who are co creators of media, they're also co creators of the workspace that they work in. And so managers have to learn the way the agile software people do or the way the military has with special forces to push power to the edge. And managers have to redefine their roles, I think as setting high level goals and then removing obstacles and providing resources. And that's a fundamental change from it goes across generations and if the managers are older and the workers are younger, it's especially more challenging. But I think technology is actually helping in some ways and I haven't heard it talked about today. But hierarchy originally evolved for a reason, which is that people get overloaded with information if everybody talks to everybody. And the kinds of technologies that Hayes and Alberts talk about in their book Power to the Edge. These are two military folks who talked about radical decentralization a long time ago. You can actually get that book online for free. And what they talk about is technologies that allow publish and subscribe to be done intelligently mean that you can publish everything you think might be interesting to anybody and they can subscribe to the things that they're interested in. And we do it by filtering email, by deciding who we friend or follow on Twitter or on Facebook and so on. And so all of us are beginning to do this. And I think this technology is allowing this real time, face to face problem solving both inside and outside of organizations in a way that's moving very, very fast along with automation which the previous speaker referred to. So I thought some very interesting themes came out and some challenges for all of us as organizational scientists.

Speaker A I'll stop here and then I'll call.

Speaker D My way back to that.

Speaker H Yeah, perhaps just building on what you were saying right, I think the importance of what you just said at the.

Speaker D End because I really pick up during.

Speaker H The day the importance of real time emergent, high quality information sharing mechanisms. I think that is fundamentally changing the way many organizations work and there are.

Speaker D Now both at the same time much.

Speaker H More autonomy and decentralization and much more integration effective. And that was perhaps pioneers reasonably in some of the special forces in the military. But organizations, corporate organizations can work in the same way. And I think that's probably going to be metaphors around saying a lot of work is going to be displaced and I think also interactions are going to be deeply modified by this availability of abundant real time information. And we have not really drawn issues in around for a long time. I remember a student right here 40 years ago visiting Ti and Texas Instruments was already at the time writing themselves off, knowing what was going on in.

Speaker E Every plant, every day.

Speaker D I don't think we have coped up.

Speaker H For it cluster and lost that's.

Speaker C I came to learn and I was not disappointed. It was really a positive experience for me. And one of the takeaways for me, one of the takeaways for me, I'm.

Speaker D Not one of those people who can.

Speaker C Speak without microphone, is that just reinforcing the iterative nature to deal with emerging issues. There is a faster pace of change. The last time that I heard Jake Albright speak, he was talking about big data and the influence of big data in organization design. The need to change faster. So the pace is increasing and that iterative nature. That the cycle that we revisit our organizations, not necessarily structurally, but from a health and process point of view is increasing. Question I was reinforced my thought to deal with these issues as quickly as possible. It's probably proactive as being a little bit optimistic as quickly as possible. And then also I was reinforced in the idea that organization structure is not the main deliverable.org chart, is not really.

Speaker B The output of this.

Speaker C The output is our articulation of how we expect this thing to work. So that came out very clearly in many of the presentations today.

Speaker B So thank you very much.

Speaker A Last word, anyone?

Speaker G You're?

Speaker B The last word?

Speaker A Okay, well then I will use it as a moment to say thank you very much to all our speakers today. Thank you for those who came as part of the academy. Thank you for those who came far and wide to add to our body of knowledge here. Thank you again to the organizational design community and Simon Fraser University for hosting us. It sounds like there's opportunities for more discussion as we move into the cocktail hour. I'll just add that again, they're clapping back there. I will add that the drink tickets are available here, so please do stop so we can they have been spread.

Speaker B Out and if you miss one, I have more.

Speaker A Okay, there you go. So that's your drinking instructions. And I just want to say thank you again on behalf of myself and Maggie, and we'll see you next year in Anaheim.

02WOcasio.wav

ronadmin — Tue, 26 Sep 2023 08:11:07 +0000

02WOcasio.wav

Job ID

1695715793

ronadmin Tue, 09/26/2023 - 14:11

Duration

2000seconds

Summary

- William Ocasio is the John Kellogg Professor of Management and Organizations at the Kellogg School of Management. His research is on organizational politics, cognition, and culture with a specific focus on strategy, corporate governance, and organizational and institutional change. He says culture needs to be emphasized more in organizational design.
- Third point I wanted to make was about emergence, which relates to this notion in organization theory. The idea I would suggest in the mindset bringing together the formal and the informal. When you think about the organizational design, think about it from a more emergent perspective.
- How do we define organizational culture? What are the elements of culture? There is really no consensus about what those elements might be. Attention with respect to mindsets really shapes how people pay attention in organizations. The problem with the notion of shared value is that it has become just a PR statement.
- The final point I want to make has to do with when you talk about deciding culture and the elements of culture. It's important to talk about the processes that you need to make sure that that culture takes hold. And ultimately it's about reinforcing all those elements through communication.
- Will: What's the difference between behavior and interaction? Some people believe that you have to define culture as shared and some people don't. Cultures are distributed among people in the organization and there might be some differentiation instead of fragmentation. These three things are central to making Agile software development work.
- Thanks. There is an implicit assumption that it is good to build a strong culture. But of course we know that strong culture has both positive and negative consequences. Can we identify the conditions under which a strongculture is going to be good for certain purposes and under certain conditions and strong culture might lead to bad consequences?

Video Link

https://aioperations.cmsmentors.com/project-transcription/govideos/2015%20VIDEO…

Formatted Text

Speaker A Thank you for coming.

Speaker B Let's get started and we'll start with our first speaker, first session, the microfoundations of organizational design with a focus on organizational culture. He is William Ocasio and he is the John Kellogg Professor of Management and Organizations at the Kellogg School of Management. His research is on organizational politics, cognition, and culture with a specific focus on strategy, corporate governance, and organizational and institutional change. So I'd like to bring that.

Speaker A Thank you. I'm very pleased and honored to be in this conference. I'm actually a bit of you didn't mention design, but I kind of a clout that organizational design person in many ways are very interested in that don't always use the word, but always since the very beginning been interested in organizational design. I think not just in my work, in many ways in many works, in organization theory and even in strategy. Now, the topic I'm going to be today is really kind of a perspective, sort of talk in terms of different ideas that come partly from my research but also partly from my teaching in terms of both MBAs and executives and also a little bit from issues of consulting and also partly from part of that a reflection that issues about organizational design are often seen as quite separate from issues about organizational culture. That's actually particularly true among researchers. I think it's a little bit less true among consulting firms these days. Actually kind of really do see the connection quite consequential. And part of that is then sort of as my title says, I'm talking about how there's organizations that could design cultures, which for some people in the organizational research community, that's kind of anathema to say that there's such a thing as designing a culture and we'll be talking about that in a little more. But if you talk about designing a culture in the context of designing organizations more broadly, or sometimes, as people call them, organizational architectures. Now in prepared for this presentation, I looked at how is it that the organization, the design community talks about culture and read over some of the issues and particularly kind of the first issue of the journal Organization of Design and how many mentions of the word culture and how exactly they used it. I think it was used somewhat, apparently, but the word did come up, including in J. Alvarez. I think it was the first article in the journal and kind of towards the end of the article and I.

Speaker C Think reflects kind of a theme that.

Speaker A Yes, culture is kind of recognized by some but not by all in the organizational design community, but it's typically not emphasized in many ways. What I'm going to say today needs to be emphasized a lot more. So here's kind of what he said here on the human side of the organization is being redesigned. So the sort of notion that you are redesigning the human part of organizations as well, but as well right. So it's kind of a side point in many ways of the argument in many forests, emphasis placed on developing shared values, which is one way that I think probably the most prominent way that organizations now use the take culture quite seriously, although sometimes it's more a public relations necessarily than taking the share values very seriously. They guide decisions without communication. Now, this part I thought interesting because actually I think culture is actually a lot about decision making with communication right, and the process of interaction. So we're going to focus on that. But certainly the issues about interdependent units and managers are important. The last sentence is interesting too because I think it's central to issues of design in the 21st century, this notion of developing a culture or designing a culture of collaboration that managing interdependence, which is much greater. Now, despite the fact that culture may not be necessarily a central topic in organizational design, I think it is very much a sort of topic that has this long history in the study of organizations and particularly started in 1980s when everybody was worried about Japan, right? And well, Japanese are doing better than the United States because they have a stronger culture. That was, I think, the perspective and Peters and Waterman actually kind of made this quite salient in their Inserts for Excellence book and kind of had a lot of influence with practitioners. Now it also had influence among academics. Now, this particular picture is of a Japanese office and I find it quite interesting because I actually visited Japan actually about ten years ago and here you see kind of the interplay between the hierarchy and the culture and it's sort of designed even here explicitly in the physical culture. I don't know how many of you have been to Japan and visited some of these offices. It's very kind of common feature that is table right, where there's very few actual private offices and the private offices don't typically have windows. So there's not necessarily a lot of privacy either. But the interesting thing about the hierarchical structure of the organization that it's reflected in the position of where you sit at the table, right? So as people get promoted, they move from one part of the table to the other and it's very, very seniority based organization, usually and this is changing, by the way, but it still might come in an organization and the department head sits at the end of the table, right? You also see kind of a lot of moving in and out so people are always in their table. So this is kind of an artifact of the culture but it very much reflects the collaboration that happens in organizations in Japan. What I'm going to talk today sort of more general is trying to make five points, which I think why this topic I think is really important. The first one, and perhaps in many ways the big lesson is that although culture is always, I think, an important feature of organizations and organizational design, it's actually more increasingly important and it's more increasingly important kind of from a kind of theoretical perspective, what I would call the decreasing decomposability of organizations. We can't necessarily put people in boxes anymore. That was never quite the case, but it's actually becoming less and less so and in that sense make culture more important. Another aspect which actually comes from kind of work in organizations is notion of embedded agents which goes beyond a boundary rationality, rational after model of individual behaviors and sort of a very different model about how humans behave. The other aspect that I kind of want to mention is that the cultures, we're trying to refine them, but they're ultimately emergent. And I think this is a general idea that I think is not only relevant for the talk about culture, but it's the talk about structure also because although we talk about designing structures, we actually end up with emergent structures which may not necessarily be quite reflect the formal design element. And we have to think about how these two relates. And then the question is some of particular ways that we should be able to do that in terms of the elements of design for the culture and then the elements for implementing that cultural design. So the first point about declining near decomposability some of you may be familiar with this very classic article in 1962 by Harvard Simon on the architecture of complexity. It's kind of a rich theoretical article about hiring and about structure. And basically he talks about systems more generally. But kind of one of his main notes is about organizational systems as basically being hierarchical by hierarchical. He not only means in terms of vertical hierarchy, but basically they're kind of nested systems. They're kind of nested on each other. And then another aspect in addition to hierarchy that he talked about is that systems are more likely to be also wide not only if they're hierarchical, but where they are what he calls nearly decomposable. And at the end of nearly composable systems is when the interactions within the system are greater than the interactions between subsystems. So most of the interactions, like most of the communications, then occur within the system rather than between the system, which I think has big applicability to the issues of organizational design, the communications happening within the boxes or what about the communications between the boxes? Right. And interesting, at the same year that Simon published this piece, chandler published his Strategy and Structure, where he talked about the multidimensional firm, the case of GM and Dupont, which is very much an example of a multi divisional excuse me, of a neolithical possible system. Now there's a lot of change that's happening. These we no longer have the type of organizations that we had in terms of the multi sort of forum. In many ways that's becoming much more common, much less common we had this increased emphasis in change and innovation the problem with the indicompostable system is that the other way that people talk about it is organizational silos right? Every kind of part of the organization is kind of separate from each other. So we're going to break the silos. We're going to make the interactions between the subsidize a lot greater. And the idea there is that then culture becomes quite consequential because we have to think about not of the structural design, but they're all of culture in breaking those interactions between the subsidies of the organization. And part of that I think, is reflected in all the changing organizational design moving away from the multidimensional firm, including in the high tech sector, you have firms even though as a multi business organization, they basically have functional structures. But how do they do that? Why would really culture is quite central to that. And in terms of even sort of more traditional firms, they're going to things like four dimensional structures. PNG was a four dimensional structure with products and geography and functions and customers. This is no longer a nearly proposal system. Right. The interactions between the boxes are going to be huge. I would say. Their culture is really important. There's complementarity of structure. So an issue that was always central. I think it's becoming much more central in organizations. And then the second point has to do with this notion of embedded agency. Traditionally in the literature, in organizational design, this notion is about problems of information processing. Sounded rationality being quite central to design. But there's still kind of a notion of rational based actors. There's kind of another notion from the literature on culture. Little institutions thinking about individual agents not only being rational actors, but also shaped by the cultures embedded in the cultures that they are part of. And this notion of cultural embeddedness is quite important. So we're looking at sort of human behavior the argument by a logic of interest or perhaps it's a logic of consequences, as Jim March would say, that this is also a logic of identity that shapes how people behave. And so focusing on issues of identification and socialization is really important in terms of managing people in organizations and to do that, we have to sort of think about culture. So instead of talking about sort of bounded rationality, we call it in terms of a model of bounded intentionality. Yes, people have intentions, but their intentions might actually be driven by the kind of strong identifications they may have with different organizations, different occupations, different institutions. And shaping those identifications is really central to the issues of organizational design and organizational architectures. Now, the third point I wanted to make was about emergence, which relates to this notion in organization theory. If you look at Fitzcott's book about open and rational natural and open system, this is kind of an idea. Well, we have a formal organization, and then we have an informal organization. They're almost kind of separate. And it's kind of many ways in many ways that the issues about organizational design has been seen. I would say that when we kind of have to reflect upon this to think about it not in terms of the formal and informal as being separate entities, but in fact ultimately the idea whether we're talking about structure or we're talking about culture is we're trying to design an organization that we can't do that completely. Here I have a quote from Phoenix. We also have an article in the organizational design journal. Organizational design is a particular form of human problem solving in which the problem is one of getting multiple individuals with diverse knowledge and interest to collectively achieve something they cannot do so by acting individually. And I really like this particular definition, but I think what I'm really saying here is you have to think about the emergent organization that comes able to achieve this problem solving right, that allows for the collective action to be more effective than the action of individual organization. So we're talking about defined the idea I would suggest in the mindset bringing together the formal and the informal. And I think this is particularly true for culture because we can never kind of fully control the informal aspect of culture. But I would say it's also true for issues of organizational structure. And part of that then we think about all the elements of organization, the structure, the culture, the technology, the economic system. To a certain extent we could actually try to design all of these, but there's always going to be an emergent part of that. So when you think about the organizational design, think about it from a more emergent perspective. Let's see how much more time I have here. One question here is then when we're talking about organizational culture, how do we define organizational culture? What are the elements organizational culture? This is actually a question that's a very tricky one and there's a lot of different literatures that give you very different definitions about culture. I'm going to put one that I particularly like as kind of a systems of rules and tools which includes kind of this more normative element of culture, but also this kind of more cognitive element for guiding attention, behavior and interaction in organizations and there is really no consensus about what those elements might be. As I was mentioning over for this talk actually here I think the organizational consultants are actually more advanced in many ways than the academics are with respect to where they are. And here I'm actually linking some ideas from one particular organizational consulting firm Strategy Ann, which was formerly Booz Allen and they had to talk about organizational DNA and they talk know, they actually don't use the organizational DNA, the word culture at least it's hidden in many ways. But they talk about three elements that I would put into culture. They're going to have the mindset, the commitments and norms of the organization and the idea that these are informal parts of the organization, but you can actually affect them in an important way. And I could link these to different aspects of the pre notions of attention, behavior and interaction that I talked about here. Attention with respect to mindsets. I could spend a lot more time than I have on this one particular issue because it relates to very sensually, to issues about research, but my own research. But for instance, organizations sometimes think of themselves as community, sometimes they think things kind of have a professional mindset. So shaping those mindsets really shapes how people pay attention in organizations. I also think the word commitment I think is really interesting because it's another way to talk about values. But the problem with the notion of shared value is that as I said earlier, has become in many ways just a PR statement. So the question here is in a sense things that you're truly committed to. So think about less about the there are certain values that are more important and including commitment to which are your key stakeholders in the organization, commitments that are shaped to those metrics. And a mission, to the extent that a mission is really something that's consequential. Many organizations have mission statements. Very few organizations are necessarily committed to the mission statements that they have. So I think think about commitment is important and notion about interactions also central in terms of interactions with collaboration and competition. The final point I want to make has to do with when you talk about deciding culture and the elements of culture, I think it's important to talk about the processes that you need to make sure that that culture takes hold, that you achieve that identification with people in the organization as I talked about. So this is kind of also I would say design elements, the sign elements that often we have Darden here, our HR team is kind of people people, right, HR people. So selection. I think one of the things we know is we want to shape and design an organization who we hire and we very to be the issues of cultural fit and also with diversity we can go the other way of having kind of too much of a group think culture that may not be biased the socialization process. This is interesting because the word socialization is kind of a very old idea in the literature that is kind of somewhat dead, but it actually is quite consequential because in many ways what organizations do is what you might call secondary socialization, right? The one beyond socialization you have in school basically try to socialize people in a particular way. One of the things that you have, one of the new words that I hear more and more these days is onboarding, right? And onboarding is very much a socialization process, right? To get people to conform to the norms of the organization, the issues and training. A lot of training. I remember being an emphasis in India. They spent six months training. A lot of it is not a technical training. It's a socialization process to have the conformity with the norms and commitments of the organization. And that's a really central part of that training. There's kind of also the sanctioning process, both in terms of the positive and the negative, sanctions, rewards and punishment. And a lot of this is not just material, because one of the problems that we know is that too much emphasis on material rewards might actually be detrimental to issues of getting people to be identified with the organization because then it becomes kind of an external identification motivation rather than a more influential one. The issues of symbols, the artifacts you saw that in the case of Japan and the model of Japan and kind of the symbols of the artifacts of the culture, including the material aspects, are really consequential. Also the language specific vocabularies that are very central through organizations. And ultimately it's about reinforcing all those elements through communication. Now, for communication to be reinforcing, it has to be transparent and credible. I think one of the difficulties organizations have in some of the communication processes is that what they communicate and what they actually do are two very different things. The rituals and the measurements are also consequential. And I'm going to stop right now. Any questions? Thank you. Let's see. We do have mics here for our questions.

Speaker D Thank you. Will, I was thinking about the definition that you provide for culture. And it might be a terminological thing, but I was curious about these things. The first one, the word the adjective shared is not there. Right. I know that you refer to the reality of organizations, but here you're providing a definition and why share is not in the definition. And also, in your mind, what's the difference between behavior and interaction? Because I see interaction as one kind of behavior. So I know that you attach commitment and normal to those different words. But conceptually how you I'll start with.

Speaker A The second one, which is kind of a simpler one. Right? Yeah. Interaction is a form of behavior. I agree with that. But there's also behavior that is not in the context of interaction. And when we're talking about culture, it affects what we do as individuals when we are ourselves in the cubicles or in the seats and table. And that's not elite interaction, but also about when we're actually working together with others. So it's both. But you're right. Interaction is a particular form of behavior. With respect to issues of shared, that's a big question, and I'm certainly taking a particular view here. That's a subject of one of the reasons there's not more research on culture in organization is the fight over that question. Well, some people believe that you have to define culture as shared and some people don't. And I'm kind of in the camp on the don't right now. Cultures are distributed among people in the organization and there might be some differentiation instead of fragmentation. There's a combination of that. So Joanne Martin has this book that she published in 1992 that actually goes into this particular issue. So I would say it's a system and there's interconnection between the parts of the system, but not everybody shares all the values and the sale. You're as committed to the same thing. So in that sense I want to both stay away from.

Speaker E So thank you for some very thought provoking comments. When I look at things like Agile Software development, which comes out of Agile manufacturing in Japan, it's not the elimination of coordination through shape culture. What it is is it's the radical decentralization of all of this. And so you have stand up meetings where all the members of the Scrum team talk to each other about what their issues are. And you have a scrum of scrums at the next level up, where the leaders of each of these 1210 to twelve person teams talk with each other about interactions across boundaries. But the senior managers just set the high level goals. They call them user stories and stand back and wait. And they're not allowed to interfere. They're not allowed to do what some of the software people call drive by shootings to throw in new ideas or new scope or new requirements. They set the high level goals and they stand back and the team works it out on their own. And to me it has to be done this way because this is a generation that's grown up coproducing media instead of being passive recipients of media, and they're not going to be given detailed work breakdown structures and specifications of the happy. So to me, again, it's a decentralization more than it is an elimination coordination.

Speaker A Yes. But I would say is that that deserves a cultural design and they may not necessarily use that word right. But in fact that is what's happening in Agile. Actually, my brother works in Agile software. Right. And a company was recently acquired developing coordination processes at the team level with that particular interactions with hierarchy, which is very much about creating identifications, creating, I would say, norms, commitments and mindsets. The three things that I talked about I think are central to making Agile software development work.

Speaker C Yes, fascinating talk. One thing I would observe as a practitioner is many people talk about structure, power and cultures orthogonal. But I think you correctly point out that culture is an emergent behavior. So from my experience, certainly culture is an integral function of some structure and power over time. Do you have any idea for how that works? Because my observation is you can change the structure, you can change the power, but you can't change the culture without giving it time to cook, if you will.

Speaker A Well, first of all I would say that those three things are coevolved. They're all emergent because power is also emergent, right? And you think about power yes you can perhaps give people a title that doesn't necessarily you're going to give them the power. Right? So you have to think about the kind of power structures or also kind of emergent structures in organizations. And it's not just about having the formal authority that you design a power structure in an organization. I think, yes, you can do so. The formal aspects of structure can be are more designed also but that isn't necessarily going to affect who actually ends up communicating with who. And actually part of the Agile idea is that you want to develop structures that allow for self emergence, self organization, right. And for that you have to have a combination of what is traditional thought about structure and the cultures that allow for those two things to take place. Self organization is a critical aspect, I think, of the organizations that we have that is part of Agile, for instance, right? Finding out when is it that not having the top in the organization put a kind of particular way when they have to do it or who actually needs to participate but align for self organization to emerge. And that's where I was saying kind know, rather think about designing for emergence and that I would say for those three things. Now, there's actually one of the things that John had said I was out of time, so I didn't put back out of my last slides here is that there's a lot know, designing for emergent organizations. And the second part research on the culture structural linkages. There's something that we don't really know a lot about. And I think there has to be a lot more research on this particular topic.

Speaker F Thank you for sharing your thoughts with us.

Speaker E One of the things I come from.

Speaker F The under the continuum practitioner and one of the things that we do when we do the strategy work and really on InDesign is we define the cultural and behavioral attributes that need to be on fire at the end of the redesign process. I'm wondering that work comes out of Albert Churn's work from the late 60s, early seventy s and one of his design principles being something called design compatibility which is basically the process of design has to fit with the intended culture at the end. Did you come across that in any of your research and how does that fit in with what you have?

Speaker A Well, I think you know, I mean there's multiple different kind of manifestations of that idea, right, that some use the word culture and some don't, right? Even from Jay Galvaiso star model which didn't use the word culture but talked about humanization or nazar tuschfit and then kind of the congruent fit idea. So they're all kind of part of this. I mean, this is in a sense an old idea. I would also say that perhaps the part that I kind of emphasize more here is that there is kind of an active design of that organization that we have to be kind of more proactively that culture that we have to be more proactive about at the same time that we are realizing that we cannot have total control over it. Right. But given how much we know about organization and human behavior, there are things we can more or less predict that's going to go right and then it's a process of emergence. I feel the same way about strategy. Right. Ultimately you start with a plan and then the strategy that's of emerging is not going to be the same thing as the plan. So in a sense what I'm really saying is all of these things are emerging and they have to think about how the different parts co emerge with each other. And yes, some are more stable than others and I think that the point is that the culture part is probably harder to change and more stable than some of the others. But you have to think about the relation between the stability and the change in all these different elements of the organizational architecture.

Speaker B Thanks.

Speaker G There is an implicit assumption that runs through most of the literature in management and also in the culture literature is that it is good to build a strong culture. And I think that your presentation also follows that tradition as to how to build a strong culture. But of course we know that strong culture has both positive and negative consequences. The next question is can we identify the conditions under which a strong culture is going to be good for certain purposes and under certain conditions and strong culture might lead to bad consequences? Now this is one example here of a General Electric under the former CEO of Chad Welch is all your business oriented. Now under the current world he really wants to push it for innovation. So there are really two different cultures, but the stronger culture that you have, the more difficult it is to change the culture. So I just want to open up this conversation beginning under what conditions strong culture is good for what purposes and under what conditions strong culture is bad and also for what purposes.

Speaker A Thank you. I think I might time it, but I was going to say actually that I don't agree with the notion that we want shared cultures and I totally did not mean to imply that in fact and also when you're talking about strong culture, strong cultures at what level? Right. So you may have a strong culture at the level of the department but not necessarily strong cultures at the level of corporation. So actually I don't particularly think that strong culture debate is the most necessarily useful to think about it because there are so many contingencies and it's very close. To the question about shared, right. Because the notion of shared is also strong, is very much related to how shared they are. And I think sometimes you want to have distributed cultures in an organization and depends on the particular strategy, business model, et cetera. Right. One of the difficulties with all of this, and it's the biggest difficulty with generation story design, is that there are no simple answers, right. And we're talking about these complex configurations, not just of this structure, but of culture and their interactions. Okay, thank you. Thank you.

RCapelle - Grouping of work.wav

ronadmin — Tue, 26 Sep 2023 08:11:07 +0000

RCapelle - Grouping of work.wav

Job ID

1695715793

ronadmin Tue, 09/26/2023 - 14:11

Duration

2628seconds

Summary

- I'd like to shift a bit to talk about grouping of work. The starting points are understanding the strategy and then also understanding the work. How do you make choices around what a primary way of organizing is and what secondary or tertiary ways of organizing are?
- In terms of a synthesis with J Galgraith's Matrix work, he puts a lot of focus on Racy. The A for accountability or authority is often not well defined in that model. Could I add to that, please? A client introduced us to a construct that is much more useful.
- Advising is really a way of informing. Monitoring and coordinating is the authority to persuade, but not override. Auditing and prescribing is instructing someone who's not your subordinate. There's no such thing as a group decision. Requisite really helps them get the picture around.
- Use the extant chart that you've been using. Take a look at the grouping of work based on what we've been talking about in terms of the functional and cross functional pieces. In 20 minutes, we'll check back with you.
- We will essentially put the consumer banking and business banking group together. It's a natural progression for the client from a commercial to corporate banking space. And the case of the wealth and the investment banking, put them back together again.
- The bank is schizophrenic. It's organized by multitude right now. Products, geography services, functions, et cetera, completely be cleaned up. The only other thing is supporting cross functional roles versus the key drivers. Let me turn it back to Paul.

Video Link

https://aioperations.cmsmentors.com/project-transcription/govideos/00%20Profess…

Formatted Text

Speaker A I'd like to shift a bit to talk about grouping of work. And as you've probably gathered up to now, as Ro has evolved, there have been some changes in terms of how people do things. So I think that part of the value is making sure that you get the fundamentals and them in a way that is quote unquote correct. On the other hand, I think it's also important, at least for me and my colleagues may have other opinions on some things which would be fine. I think it's also important to talk about the evolution and I think it's also important to talk about what perceptions are, what my perceptions are in this particular case of some of the strengths and weaknesses, because nothing's perfect and if you're going to be part of a profession, the profession grows and evolves. So I think understanding some of that and some of the questions is a good idea. So in terms of our work, just as a context, the core pieces that we've been talking about so far in terms of strata, in terms of time span, and in terms of information processing capability, which we'll get into more, for us, that is a core of both our practice and research. From my perspective, that's really fundamental in terms of what levels of work is about and we've just got enough practice and research and so on and so forth, that I'm very comfortable with that. On the other hand, there are some parts that I think can be further strengthened, some parts that I think are not as strong as they might be. So if you look at functional alignment as opposed to the vertical alignment, my sense is that in Ro that's not as strong. We talked earlier about kind of starting with strategy and then moving from strategy to the alignment of the organization. So if you think about the alignment of positions vertically and functionally that provides the spine of the organization, our view would be to the extent that the spine is misaligned, everything you overlay on that will be suboptimal. It's really a fundamental first piece from our perspective in terms of having organizations that operate effectively in terms of the starting points. The starting points are understanding the strategy and then also understanding the work. We really talked so far today about some of the pieces of understanding the work, but it's really like rolling up your sleeves and getting in there and understanding the stuff. If you look at functional alignment, how you organize functionally, one of the big questions which is not addressed as much is how do you make choices around what a primary way of organizing is and what secondary or tertiary ways of organizing are. So for example, when you think about organizing work in a big company, one of the questions is if you've got a corporate group and you've got a whole bunch of business units in a very large company, how do you set up the business units and what's the role of the corporate group. So there's some work that's been done by Gould and some of his colleagues and they really look at that specifically and I think that's useful work. In terms of the functional alignment. One of the questions coming out of strategy is, okay, so I could organize primarily by geography. So each of the line people reporting to me will be accountable for a geography, could organize by customer type, small company customers, medium sized, big ones, could organize by product or service type, could organize by function, marketing, sales and so on. So we've got different ways that we could organize and a key strategy question and design question becomes how do you prioritize those? How do you make a decision on which one you want to go with as your primary way of organizing? And I think that question and that interface is really critical historically. I don't think we spend as much time on that question as it deserves. One of the implications is, and this gets into cross functional accountabilities and authorities, one of the questions then becomes, or one of the implications becomes whatever you decide as your primary way of organizing, let's say it's customers, then by definition you've got a secondary and a tertiary way of organizing. So if you organize first by customers and you're fairly big, you may secondarily organize by geography. Okay, so we've got all these customers, this person reports directly to the president, but then within this group we're spread out all over the place. So we're going to organize geographically on a secondary basis. And what's interesting is that that secondary basis then becomes the foundation for setting up the cross functional accountabilities authorities. So the primary way is how you set up the managerial and the secondary and even the tertiary way. I've seen material written on having four or five, six dimensions. I can't imagine how one would do that, quite frankly, effectively. I think there's only so much that one can do, but certainly on a secondary or tertiary way, setting those up becomes critical. One of the things we found so the position alignment then is the foundation. One of the things we found is that to get the cross functional right, if you don't have the positions aligned vertically and functionally, and you don't have the employee and managerial accountabilities in place, very difficult to get the cross functional right, okay, those pieces become foundation pieces for the cross functional. The cross functional is one of the most difficult to have in place, but if you don't have foundations in place, then it's very difficult to do that optimally. One of the paradoxical pieces is that if you think about the vertical alignment, it actually is one of the important pieces to get cross functional right? So if you've got a vertical alignment and you've got an extra position there that you don't need and you want to set up some cross functional work. Which one of the two do you invite to the meeting? Invite both of them. Bit of a waste. Invite one of them. If you only invite one of them, are they going to tell the other about it? So the vertical alignment is actually a significant piece in getting the cross functional set up on an optimal basis. So this piece around the functional, I think we can do better work on it. So, as an example, I think that Jay Galbraith has done more work in this area that's useful than I've seen in Ro. There's a lot of things I don't like, and they're missing this whole vertical piece, which I think is pretty substantive in terms of that looking at strategy and then looking at how you set up the functional alignment. I think they've done better work in that area than Ro typically has, just as I think Gould has done really interesting work in terms of that upper level and how you get that upper level set up. Right. So those would be a few preliminary comments. I want to go to the slides and go through those and then I want to talk a little bit more about cross functional accountabilities and authorities. Before I do, are there any questions or comments on what I've said so far? Yes. Tell me if I get too far.

Speaker B Afar, but when we're doing design work.

Speaker A For It systems, we tend to have goals for design, maintainability, effectiveness of delivery, et cetera. Do those motivations play into that or.

Speaker B Were you just describing structural components that go into it?

Speaker A What I'm doing at this point is describing It in a more macro way, but those all come into play. So if you think about so called support functions, human resources, finance, it is a really interesting one because it's part support, but it's mainly core now the way it's evolved over time. So those areas by definition are set up on a cross functional basis. You've got to get the cross functional accountabilities and authorities right for them to.

Speaker B Be fully effective over both sets of goals.

Speaker A Absolutely. Thanks.

Speaker C Ron J. Galbraith argues for true matrix structures where people have two bosses. Yes, I think I know what you might say from an Ro perspective. And Gould's work suggests maybe 8% of large organizations use true matrix structure.

Speaker A What's your view? Right. So quite simply, there's a part that's right, and there's a part that's not the part that's right. Is that when organizations get to a certain complexity, you need to organize on more than a vertical dimension. That part's right. The part that's wrong is matrix is a really suboptimal system for managing work across an organization. You got some solid lines and some dotted lines and they're not as well defined in the core Ro piece. And we've further evolved it. The core Ro piece and the other piece. One of the questions for us is who's the crossover point manager. So the crossover point manager is the lowest level manager who controls most or all of the resources necessary to resolve an issue or take advantage of an opportunity. And depending on what that is, it could be different people in different parts of the organization. That's a real role. It's virtually never seen as a real role and it's virtually never done properly. So you set that up. That should be one of the first questions. You got a problem. First question, who's the crossover point manager? Once you know that role, then the work is setting up context and prescribed limits, setting up a mechanism to resolve conflict and refine the context and prescribed limits. Make sure that positions are aligned properly, vertically and functionally. Make sure that the managerial accountabilities and authorities are right, make sure that the cross functional accountabilities and authorities are right. And that gives you a full and integrated system in terms of doing that work with some real specificity that matrix has never had.

Speaker C So an organization like Chubb that uses true matrix, meaning two hard lines for some jobs, so they'll have someone who's accountable for selling commercial insurance in the Chicago area and they report to the product headquarters and up the geography. RO's view on double.

Speaker A So the view in Ro, which we would agree and continue to use is that every employee would have one manager but can have multiple cross functional relationships.

Speaker D There's one other principle that we found very useful. As you come up with your initial functional structure, you start to look at which of the cross functional processes are most critical and rate limiting and at what level is that cross functional process. Primarily doing the work is the value stream, let's say it's level three. You want to modify the structure so that the people who are in that process flow, if not on the same team, have the same manager once removed to try to bring the crossover point manager just two levels above those critical functions that must work together. You can't always do it, but that's our null hypothesis.

Speaker A That's good, right?

Speaker B That's good.

Speaker A Okay, so what I'd like to do is run through some slides and then I'd like to talk a little bit about cross functional accountabilities and authorities. So in terms of common grouping issues, overlapping and diffused accountabilities within functions and cross boundaries. So some of the problems, there are all kinds of problems here and certainly having that secondary system to deal with them is critical. Waste, limited energy, prevent, effective integration of work. Virtually every organization we go into complains about having silos, complains about not being able to work effectively across the organization. And virtually no organizations we've ever been into have effective cross functional accountabilities and authorities, which is the antidote for those problems. Perpetuate problem, escalation versus resolution, delay, decision making, increase coordination costs, hamper communication, erode, confidence and trust. So all kinds of issues here. Some fundamental groupings of work. On the top part you've got selling, marketing, provisioning, development. So one of the things you want to do first is you want to get your core business organized. So what is the business actually delivering? And once you've got that in place, then you can get more deeply into the other parts of the business in terms of resource sustainment, staff specialists, resource enhancement, and so on. One of the things, if we go into an organization and they want to do a pilot project first, it's easier to do a pilot project with an intact business unit than it is with a function like HR or Finance. The reason is HR and Finance support the core business. And if you don't yet understand what the core business is, it's harder to know if you've got it aligned properly, it's doable. It's just a tougher way to start with a pilot project for that reason. And we've got some considerations here that I talked about earlier. Geography, interdependence, and so on, um, as much as possible, group light work together. One of the, one of the questions for you as you're looking at the groupings, one of the questions is, if you've got a manager managing an area, can that manager handle that breadth? Say you've got two functions and this manager is managing both of those functions. Can the manager be knowledgeable enough about both of those to do it properly? Some consulting firms go into organizations and use span of control as a mantra. So span of control should be seven we'll go through and we'll set everything up as seven. But they don't take into account what the work is. Setting it up in a way that a manager doesn't know the work and is going to fail is not a very good criteria to use in terms of how that operates. If it's interdependent group, it under a common manager as low as possible. It ties into what Jerry said a few minutes ago. If work involves a number of handoffs put in place, supporting plan schedules, liaison rules, and so on and so forth, and then make grouping and layering decisions concurrently in order to deliver this strategy effectively. And the real key here is you get the positions aligned vertically and functionally. That's the spine of the organization. Everything gets overlaid on that. To the extent that that's dysfunctional, then by definition everything else is going to be subalt. Paul talked about colors here's, some colors of different types of work and how they're matched. We generally find that it's better to put the core parts of an organization that are the business delivery pieces together and put the other pieces together. When you mix and match them, it tends to be more difficult. So if someone's accountable for a business unit, they're also accountable for human resources. We find that tends not to work as well as if they're more discreetly set up. So I'm just going to go back here. We're going to give you an exercise in a minute. But I just want to one of the values, and this goes back to the work that Elliot created. One of the values of this compared with matrix is that there are cross functional accountabilities and authorities, or originally called tiers. And one of the benefits of this relative to matrix is it sets up accountabilities. But for the accountabilities it also has authorities. The problem with matrix, or one of the problems with matrix is there's a lot of accountabilities but not clear authorities. That happens in organizations all the time. I'm going to give you a special project. I want you to improve performance management of the 1000 person organization. It's a stretch assignment, but I'm sure you can handle it. No one sets up the proper authorities. No one sets up the mechanisms for that to happen and to work effectively. Then three, six months later this person has not been successful. No big surprise. Lousy design. And then the outcome is someone says to the individual, well, you didn't do very well on this. Maybe if you had a better personality or whatever you could have been successful. So it's kind of a blame game as opposed to thinking about design. One of the keys is how do you design an organization so that people can be successful? The end of the day, if people can be successful and we can remove impediments that get in the way of them using their full capability, then they win and the organization wins. Most organizations are not designed to do that, not intentionally. Most organizations are not designed to do that. So some of these are advice. With the advice, part of your role is to provide advice to people in the organization. They don't necessarily have to follow your advice, but you have a requirement to provide It service providing services in the organization. The role play here on recruiting. Recruiting is a service in an organization that's provided to managers. Coordinate. If you've got work across the organization, someone may coordinate that work. And again with coordinate there's a certain authority that goes with it. If you have an accountability coordinate, people are expected to attend those meetings and do that kind of work. It's not good enough to say, well, it's not my job. Monitor. Monitor is to check and see how things are going in different areas. You often find this in finance audit. We've actually changed the term here to stop. That's what it is. Audit means stop. And we found this was confusing. So this is the authority to stop work someone is doing. I'm not the boss of the person, but I'm the health and safety person. And I deem the conditions in this plant to be unsafe for these employees. And I have the authority to have the plant manager shut down the plant until these are dealt with. Prescribe. You don't find that as much. You'd find it. In a hospital where doctors prescribe medicines, nurses are required to fulfill the prescriptions. The doctors typically think they're the managers of the nurses. Until you start talking to the doctors about what a manager has to do and they quickly realize they're not the managers of the nurses, they just prescribe and the nurses have to do those things. We also find that in a nuclear plant where someone has the prescription authority to take over a situation, take over a risk, high risk situation, collateral is the members, the team members of the same manager working effectively together. And here's one that's not part of it, but we find it really useful and it's recommend policy standards, et cetera. And what we do is it's not a cross functional accountability and authority, but what we do is we pair it with monitor those two together, become what we call a small g governance function, not true governance. You find that at a board level and other kinds of situations. So it's not true governance, but it's a small g governance function. And if you think about some functions in an organization, that small g governance function is the most important function they have. So if you think about human resources as an example, it's critical for human resources to make sure that there's policies and standards and to monitor if things are getting better or not. If I'm the CEO, I want to know what our standards are and I want to know how we're tracking. Those two things are absolutely fundamental. Now, whether I choose to provide services inside or outsource those, that's a totally different question. But this is absolutely fundamental to a lot of those functions.

Speaker E How is it recommend policy versus advised difference?

Speaker A Good question. This is all cross functional. This one is not cross functional. It's to your boss.

Speaker E Okay?

Speaker A Yeah. So for example, if I'm the vice president of human resources, I would recommend this to the CEO on substantive issues. And then part of my role is to monitor, to find out how we're doing and how we're tracking on those things. So it's not a real cross functional, it's a recommend to a boss.

Speaker B One of the value adds we found with the requisite of the collateral, one where you have an intact team manager with if you take it up to the president level, it's like the root of the word president presides, where a president presides over the whole vice presider. You say, what's your vice? Presiding over the whole work. That's the collateral accountability.

Speaker A In other words, the leader.

Speaker B The president is accountable for having an integrated, a fully integrated functioning system, but no one role can do all the.

Speaker A Work that's required to that.

Speaker B So president really says, I'm holding you accountable for wearing two hats simultaneously. One is the functional hat or the vertical hat to make sure you're running your part the way you need to. But also equally, I want you to be wearing a collateral hat that helps me hold this thing together. And we found it's been a real neat kind of ad to kind of thinking about effective teams. That this whole notion of having collateral accountability and constantly wearing those two hats and holding each other accountable for doing the right things on behalf of the whole, not just the part. That's partly the way. In other words, the silo question is often when a client or prospect will say, can you guys help us get rid of the silos around here? And I get to tease back and say, no, because at the end of the day, no matter what you do, you're still going to have parts. Because every system has parts. You can call them parts or functions or departments or whatever you want. They're still going to have them. The issue that we're not talking about is what is the interdependence that's not being managed? And what we found is if you get those collateral teams really understanding that and internalizing that, a whole lot different happens in the organization. A whole lot different happens because if they're connected, united and integrating the organization, that message gets down through the ranks of the organization.

Speaker A The issue there is that you are accountable to work with the people you have a collateral relationship with according to the context set by your manager. And if you disagree on what that.

Speaker C Context is, then the two of you.

Speaker A Go to the manager to get clarity.

Speaker D And that's really important to root out the myth that you have the ability to hold the team collectively accountable. Each member of that team is individually accountable for working effective collaterally within the context of their manager and team. Working accountability is the death of many organizational projects. You can't hold a team accountable.

Speaker A Agreed. Any other questions or comments?

Speaker C In terms of a synthesis with J Galgraith's Matrix work, he puts a lot of focus on Racy. And whilst it gets often misconstrued as to what the A is, if that's a right of veto, does that at all link to any of these definitions?

Speaker A Let me make a general comment rather than a specific comment. My general comment would be that that's a technology that I saw as a graduate student many decades ago, and I don't find it a very useful technology and it doesn't have the precision of this technology, so I would not advocate using that. I agree with you. The A for accountability or authority is often not well defined in that model, but I don't find that to be a good model to use.

Speaker C Similarly, I find most clients use it. So the nearest I can get is that the authority I write to veto is your stop, because it's the only one of those that seems the best fit. And if one's trying to introduce this concept to Racy, which clients sometimes use, that might be a way to build it on. But I'd just be interested in your thought about whether it's actually something completely different.

Speaker A Could I add to that, please?

Speaker B A client introduced us to a construct and we started to include it when we do the role descriptions.

Speaker A We talked about that.

Speaker B We put a whole section in there on decision authority because we're trying to force those conversation around what decisions are getting made at what level. So this little model is kind of a similar Racy thing. It starts with you make a determination around a particular set of key decisions. Which role has the D, which role is the decision maker at the end of the day? But you also say, well, wait a minute. Now that's not a unilateral. Like you can just decide anything you want. So it's built a little bit in here because it fits in here a little bit. So then there might be a role or other roles that need to agree. Could be a collateral partner, could be a cross functional role, whatever need to agree. So the notion is that the decision maker has to get the agree role or roles to agree. That the three of them or two of them or whatever it is, has to agree. If they can't agree, we do the same thing. A simultaneous escalation to the next level of context setting around, what do we need to do here? Then the other two pieces would be what roles do you need to get input from? But the input does not have to be taken. So it kind of matches up with the advice, all right, but you have.

Speaker A To talk to them.

Speaker B You have to say that you talk to them.

Speaker A And then the other one might be.

Speaker B Some roles where, you know, a decision.

Speaker A Needs to get made, but you need.

Speaker B To have people going off and putting some recommendations together around what the decision would need to be, which would then go to the decision maker and the agree roles. They would pull that together and say, we agree that that's the decision that's going to get taken. And away you go. We found that to be much more useful. We found the racing gets very general and kind of too many cells, and it just gets all created and then it kind of falls apart.

Speaker A Too many A's across one line.

Speaker F Yeah.

Speaker A The other thing just to reinforce what Paul is saying is that what Paul's talking about is he's building accountabilities and authorities on top of a position alignment. Part of the problem with the Racy charts is we build a chart that's correct, but it's not based on a viable position alignment, which in our view would be the fundamental that you need for good work.

Speaker G And what's the fourth one? So the decision agreement input, and the.

Speaker B Fourth one is recommend.

Speaker A Okay.

Speaker B And then there's actually a fifth one called Execute. We found some cases that you don't really need to use that just if we want to write it down. There's a Harvard Business Review article. I think it's 2006, rogers and somebody or other, and it's called Who Has the D? It's a very good little model, and I would recommend you take a look at it soon as we go on.

Speaker D Sunday morning when I do the keynote, I'll talk about another way of configuring this, and that is Ellie and I spent hours debating it. Advising is really a way of informing. Monitoring and coordinating is the authority to persuade, but not override. And auditing and prescribing is instructing someone who's not your subordinate. And if you then think of the metaphor of a traffic light, informing could be either advising or recommending. That's green light. They can do whatever they want, but they have to listen. Monitoring and coordinating is yellow light. So now you can create tension. And if the person doesn't agree, you have to decide whether you delay and elevate, and the red light is, sorry, you're out of standards, and you have to stop. We found that using the green light, yellow light, red light with that behind it.

Speaker B That's true.

Speaker D Just immediately understood by people.

Speaker A I like that. That's really good.

Speaker E When you have consensus decision making.

Speaker A First.

Speaker B Of all, you have to remember, in records of theory or reckless organization, there's no such thing as a group decision. There is no such thing. In other words, the next most accountable role holder in a hierarchical organization can always say hopefully with the right rationale and whatever, I understand. I don't agree. We're not going to do that. There is no such thing as a group decision.

Speaker E But you see that in practice.

Speaker A Oh, absolutely. And what happens?

Speaker B I've got a client right now, and the new president has come in and said, geez, I've got this organization that they want to try to reach consensus on. Freaking everything. Like it's slowing the place down. We're not getting decisions made. It looks like we're having group discussions.

Speaker A Around what should be someone's individual decision.

Speaker E Why are we doing that?

Speaker B Requisite really helps them kind of get the picture around. Maybe Tremble is making some sense here, that we're kind of wasting our time here.

Speaker E Yeah. For some reason, it seems to be prevalent. Right. Like everyone's trying to be nice that.

Speaker B Sort of say it's not about being nice.

Speaker A If you scratch beneath the surface, you usually find it's not really consensus. The organizations I've been into, the last one that I was in that used real consensus was when I was doing my PhD in psychology and I was working in a group home for mentally disturbed adolescents, and they really believed in consensus, and they were prepared to stay till all hours to do it. And it was real consensus. But the stuff that's called consensus, I haven't seen anything that I've even put that label on, even though it's used greatly. Okay, let's move on, then. So what we'd like you to. Do is to go back.

Speaker B Can we hurt the time a little bit?

Speaker A I think yes. Agreed. So stay in the same groups as the last exercise. Use the extant chart that you've been using. Take a look at the grouping of work based on what we've been talking about in terms of the functional and cross functional pieces.

Speaker B That's wrong on the slide.

Speaker A Thank you. Yeah.

Speaker B The one you were working with before.

Speaker A Do you see any problematic cross functional issues when you look at how it's organized, what are the pieces you see that you think need to be aligned properly? Maybe you change the position alignment, maybe you make sure you've got good cross functional accountabilities and authorities built in. Are there any other issues that you see any potential grouping changes? And I think in terms of a time on this fault, 20 minutes. So how about if you work in your group on 20 minutes, for 20 minutes then and take a closer look at the cross functional pieces, both how it's functionally organized, but also what you need for cross functional work in terms of accountabilities and abilities. Okay. Is the past clear? Okay. So in 20 minutes, we'll check back with you. So how about if we start at the back table over there? What are two things that came up in your group that you just like to know? Thank you. Chris not.

Speaker F Okay, well, firstly, we cut a lot of the groupings of the different functions, essentially putting some stuff together.

Speaker C So I'll start there because that's the.

Speaker F Question to say that we will essentially put the consumer banking and business banking group together.

Speaker C Okay.

Speaker F Because it's a similar type of client. It's often a small business owner that has a private account with the bank anyway.

Speaker A Okay.

Speaker F So it may create an easier flow in that environment, similar infrastructure, similar type service being provided in the commercial banking and the corporate banking possible to put those together as well. It is a very different focus kind of service. Potentially a personal business banker that works with you. It's also a natural progression for the client from a commercial to corporate banking space. So it's a natural kind of growth and situation there. And the case of the wealth and the investment banking, put them back together again. So that eases the volume of integrational complexity that you'll have with regards to product development and potentially with regards to sales. Then we start to talk about the fact that the risk is sitting in different places. So there's definitely some discussion on what type of risk do they monitor, where and what would be the critical risk aspect, therefore potentially escalating that to a kind of chief risk officer role. And then asking the question, but where is the thought leadership piece around that is happening? And where is the delivery monitoring of that is happening?

Speaker A Okay, that's great. That gives us several thank you. Just a comment. It's just a short thing, but I think it's useful. Real simple. Specialization or differentiation is not free. Specialization or differentiation is not free. People think that they can split everything up in an organization into as many pieces as they want. It's easy to split things up. What tends not to happen is that at least equal time, energy and thought should go into how you integrate them. If you split them, you also need to think about how you integrate them. Very seldom does the effort go into the integration side. And as a result of that, that contributes to the silos and it contributes to the lack of effective work across the organization. So specialization or differentiation is not free. You need to give equal thought, time, energy change to the integration piece as well. How about this table? A couple of thoughts from this table.

Speaker G Just to add, given the aggressive growth strategy and the multitude of different customer bases that this bank has, it is not logical to have a functional structure at the very top.

Speaker A Okay, interesting.

Speaker G We also just again, in terms of in the line of sort of addition, we thought that the marketing function may have some conflicts because part of it is centralized under marketing and brand management. And yet in consumer banking, product development is actually done not even at the bank level, but within regions.

Speaker A Okay, great. Those are great questions to be raising. How about the group in the center here? Generically, we said, came out center rate, just about everything, hybrid everything except for ordering, keep ordering centralized. Okay. Pretty far along in terms of that type of organization. Really differentiate in terms of business units, yes. Centralization integration. While every business unit would have some marketing, every business unit would have some It, et cetera. Central group integration. We had a good discussion on auditing and regulation too, because we felt that if that wasn't centralized okay, good. Okay. How about this group here? Comments from this group I think we.

Speaker B Can echo a number of the things that have already been said. I think we felt that with the diversity of the customer base and the banking business value chain, that we needed not only the CRO position, but we needed a strong CMO position to get the customer information file and get everything sorted out up top. And if they were going to make the decision to go stronger into consumer and retail banking, that again, the flatness of delegating so many low level resources to the branches did not have enough leadership positions actually guiding decision making in that area. The operations area also looked very, very weak and very diffuse and would need to have much more kind of a technology innovation leader if indeed they were going to invest capital to go in that direction. And beyond that, on the loan side, we basically felt again, you might keep investment banking if you will, separate, but we were going to move more wealth management resources over towards the retail side to kind of take advantage of cross marketing.

Speaker A Okay, good points to be raising and thinking about. Thank you. Group of the corner, please. I can try to say more eloquently.

Speaker E So the bank is schizophrenic. It's organized by multitude right now. Right. Products, geography services, functions, et cetera, completely be cleaned up. They need to start with that vertebrae and they need to align by one and then break it in. And then we got in. I think the only other thing is supporting cross functional roles versus the key drivers. So there's a lot we talk about risk and marketing and there's also bhr from the transformation perspective, even corporate audit from a risk perspective. So those need to be more services driven, kind of supporting the key business operations.

Speaker A Good, thank you.

Speaker B We want a level four human resources officer.

Speaker A There you go. Okay, good issues to be raised. Yes.

Speaker F Just one last comment that I do think it's quite obvious in this kind of environment asking how your business banking It platform is going to work. Because if you've got a single platform that needs to service all your product steps, you're going to have a different view than if you have a differentiated business banking platform. And the kind of risks about that.

Speaker C Is going to create new other dynamics.

Speaker A Good point. What you typically find is the starting point is they've got multiple, multiple platforms and then the question becomes how does one move beyond that? Great point to raise. Let me turn it back to Paul. Thank you.

PTremlett - Reviewing the extant org.wav

ronadmin — Tue, 26 Sep 2023 08:11:07 +0000

PTremlett - Reviewing the extant org.wav

Job ID

1695715793

ronadmin Tue, 09/26/2023 - 14:11

Duration

2032seconds

Summary

- Shift on this last exercise, we want you to just reposition. Just takes up a little bit, but it's also getting you moving a bit late afternoon. We may run about 15 minutes over. But I think we'll have some fun with this exercise.
- There's a lack of clarity, lack of accountability, a lot of infighting going on, resulting in unhappy reports. Sometimes a gap gets hidden because of capability. What generally happens in a gap situation?
- This is one interesting point in terms of Gem Up. The question is to what extent the role assessment would vary depending on the capability of the person determine the test. When you're interviewing someone, you have to make a distinction between am I listening to the facts here?
- There seems to be lots of opportunities for silos lacking integration across support. One of the evening assignments that we'd like you to do is just to start doing a little individual thinking before coming in tomorrow. The majority of the day is going to be some teams to provide at least one redesign of this organization.
- If you have a jam up, keep them higher up because you've got fewer of them. Jam ups definitely complicate the decision making process again. If it's higher at the top, it has less people potentially to be affected by it. But wouldn't it still have an effect all the way down?
- You guys had a really good work session today. The little assignment again is just to start thinking a little bit about tomorrow. We'll have some putting some propositions together. Hopefully Mr. El one.

Video Link

https://aioperations.cmsmentors.com/project-transcription/govideos/00%20Profess…

Formatted Text

Speaker A Shift on this last exercise, we want you to just reposition. Some of you stay where you are. Some of you move. Just takes up a little bit, but it's also kind of getting you moving a little bit late afternoon. What we want to do now is the last exercise, and I'm going to have to ask if it's okay. We may run about 15 minutes over. When we really did a design, we had a design for 25 people, and now we have 40. So there's just been a little shifts in times that we've had to adjust to in terms of the original design. So if that's really not problematic for too many people, then just kind of fair warning, we might just go overboard. But I think we'll have some fun with this exercise and some fun with the discussion. What we're at then, in terms of the consulting process, essentially, that we've been setting up, is we've now gone into the organization. We've done all our interviews, we've had our protocols developed. We've gone in, we've gathered all this good information. We've looked at all these documents, we've looked at role descriptions. We've done all this kind of stuff, and we're kind of pulling it all together. And one of the pieces that we pull together in the requisite process is we've created now what we call an X stamp or a depth chart. In other words, what we've done is we've taken that manifest or surface chart and we've leveled it. In other words, we've taken the depth of the data and we have leveled. All right, so what you'll see underneath each of the manifest charts is the Xanth chart for this organization. I mean, it's made up, but it's the fake XANT chart for this particular situation. Just I think it's important to maybe what we could do is in your groups, just go up to the one of the walls, because I just like to explain how the chart is created and then so you have an idea. So just go pick a chart, stand up to it, and I'll talk to it, to all of you to kind of look at it up there as well, is a little bit of a chart that's called a legend, which explains the colors. You remember that in the way of doing this, is we said that to a client when we shared that with them. That color is not good. All right, so a couple of things about a depth chart or an extant chart. One, it's drawn from the perspective of the work. Even though people's names might be in the roles on a depth chart, it really is talking about the work. It is not making any judgment about a human being's capability in terms of person in any one of those roles. Could have capability right on. Could be above, could be below. That's not the issue. It's just describing the work and the level of the work period. The next thing is it's written from the perspective of the manager. In other words, remember we said when we're working with Herb that the time span is in the mind of the manager, and the time span is created by the manager. So initially the chart is drawn, all right? Where the roles are leveled. They're leveled as where the manager put them. All right? That's where the manager put them. What we have a situation, though, when you gather information, particularly if you're talking to a manager about his subordinates and he or she levels those, and then you go and talk to those subordinates. Sometimes a subordinate will say, I think mine or I would level my role, or I would describe my role as either being higher than what that is, not necessarily that that person knows what the managers said about it and generally we don't. Or it might be below. I think on this chart, there were no belows with an arrow going down. But any role with an arrow going up is where the individual in the role has said, I think my role is one level above where the manager had described it. Okay, so that's what the arrow means. The blues are basically the jam ups, all right? In other words, anything that's in a blue state. What that means is that there's two roles in a manager subordinate relationship occupying the same level of work. The greens, pure greens, are a gap. In other words, the manager and the subordinate role are at least one or more levels discrete or discrete from each other. So there's a gap going on there in some cases. You got to be a little careful with it because in some cases, roles are jammed one way and gapped another, so they will have a border around them. All right? I believe in this case, we also created a situation where there was one role where the manager actually leveled the role as being more complex than his own. In other words, so you'll see it's up above the manager. All right, I think I forget what the color? It's kind of a can't remember the color then. Believe it or not, what we also added, because it does happen, is we put a floater roll in there where there's no apparent line in terms of where it's connected. I think it's the person who has the women's services or whatever it is. That's a situation where in the interviewing process, the person in the role could not absolutely be clear about who in the organization was accountable for their work. And when we interviewed around it the role, we couldn't find anybody claiming accountability for the work. I don't know whether that surprises you, but believe it or not, I would say in probably 60% to 70% of our cases over the years, we found these floater roles where it just is not clear either to the person or anybody above them. So their older ones kind of floating. I think I covered all the things on the depths. I just wanted you to know what those things were. Okay, is that enough for anybody? Any questions about how it's formed? Okay, here's your task. All right. We formed the new subgroups. What we'd like you to do is use the XNAT chart, the alleged and the questions that are in section one, part six, I think section six of day one. All right, there's a set of questions in there.

Speaker B So what we'd like you to do.

Speaker A In the new subgroup is start tackling those questions. What does this Xnant chart start to tell you about the organization having analyzed it? And what are some of the key things from this extent chart you'd want to point out to your client? Is it possible to project that on the screen, the questions? No, not possible. No, it's not. What you could do is just pull them out of your binder.

Speaker C You said what section did you say?

Speaker A One section six. Okay. That's all that's in that section. It's just the exercise. So one or two people just wanted to take up the what I'd like to do, though, is also are using a flip chart to document some of the things that you want to say to a client so we can share it back out with them. And what I'd like you to do is see what you can do with this exercise in 30 minutes. I'll give you a little more if we need it. Let's try 30 and see how we do. Anyway, let's start over here. What were some of the highlights from your group's conversation about the exercise or about the extent chart in terms of what might it be saying? What's it leading you to want to say to the client as a result.

Speaker B Of what you come up with, levels.

Speaker A Of where these things are and where they're.

Speaker D Well, we submit to all the questions necessarily.

Speaker E Okay.

Speaker D I'd say where there were issues in the chart in terms of compression or gaps. I think there was a sense that there would be real problems around that. We had quite a lot of conversations around the difference between the jobs and the capability of the people and.

Speaker A When.

Speaker D Does the capability of people come in and does that explain perhaps some of the jobs that have arrows going up and things like that? We had an interesting conversation about is six levels, the right number of levels for a bank like this, both in terms of capability of people running banks, but also what Ron was saying in terms of where branches sit. If this has got 1000 branches and the most in the retail area and there's maybe 10,000 people in that area, you can work your way up to say that consumer can't be level five.

Speaker A It has to be level six.

Speaker D But we don't know how many people there are in the branches.

Speaker A Yeah.

Speaker D Because we covered a lot of ground. But what were your thoughts around the key areas? We had a lot of conversation, a lot of disagreements and things as well, of course.

Speaker A And when you work on a consulting team together, you'll find that you'll have that too. We thought that in this four looks quite heavy, quite crowded, just semi optically. Optically it looks crowded, but it's interesting. It's quite actually one thing that's missing.

Speaker F Translation.

Speaker A Quite a lot of crabing out of three. So it just looked crab there looked like quite a gap between we also very much felt that in terms of the strategy, there was nothing serious that had been signaled around the data. No CIO.

Speaker F Specifically said about the strategy.

Speaker A What you do and what you don't do both send signals. So you're sending a signal about the strategy which are actually sending completely the off top message about what you'd originally said your strategy was, which is it's been elevated.

Speaker D So if you're going to go with.

Speaker A Those others, then you wanted, if you.

Speaker F Could find one.

Speaker A Anything else, Adam or a group? Yeah, you detract about the talent that may lead. There might be some risks in there around because that's often the case when you get that kind of crowding. Because essentially what it means is that if it's a true JAMA, what it really means if I'm in that subordinate role in that relationship, I'm probably and I'm capable at that level at least I'm not able to express my full capability, I just can't find the space to do it. Or I get frustrated because sometimes that superordinate role in the end of the day is really just dotting I's crossing t's, not making any substantive value add to my thinking or to my work. At some point when that headhunter calls, there's a chance to say, I think I'll take a look at that because it looks like it might solve some of my frustration. How about the Snoom group? What are the high key things you can ask?

Speaker F Yeah, we had a lot of different discussions and ideas that was very valuable. We felt that a lot of essentially the jam up stuff is that there's going to be lack of clarity, lack of accountability, a lot of infighting going on, resulting in unhappy reports, not getting value from their own managers, which would drive poor retention problems, poor morale, actively disengaged employees, there's room for improvement.

Speaker A And you're describing some of the things that happen up from that crowded situation. That's the kind of impact that goes over into and it often shows up, as someone mentioned earlier, in employment engagement surveys too. You can often do an alignment between the engagement surveys of setting and some of them jamming and crowding.

Speaker F Yeah, that was the basic points.

Speaker A Right.

Speaker F And we also felt that in a couple of cases where there's likely very unrealistic expectations of people, it gives them just when they're off to the side in a situation there's a four running a team of twos, right. Things like that. Right. He may be expecting that they can do the work of three, but they're not he may not even know how to. If he's really that capable of that level, to spend a lot of time managing people at level four, he may just be really frustrated because these people need a lot more direction than he's used to giving. He's used to self starters. They're not self starters and they need direction. That creates problems too.

Speaker A What generally happens in a gap situation? What are some of the scenarios that happen in a gap situation that would yeah, who's doing it? Or what we often find is the manager saying I seem like I'm spending a lot of time on stuff that.

Speaker D I'm not supposed to be spending time on.

Speaker F Everybody need might not even realize it's not supposed to be there.

Speaker A Right, exactly. The other thing that's interesting though, too, is that sometimes a gap gets hidden because of capability. So in other words, it doesn't appear like a gap in the real world to them because the person has really got the capability to manage themselves. But what's the major then issue with that in an organization? Sometimes, yeah, but what else.

Speaker B Yeah, then.

Speaker A You really realize what's going on, what else can happen. In other words, it probably is the comp for that person is probably in level two, yet they're demonstrating level three and doing level three alert, which would one would say in rapid organization there.

Speaker G Sorry, I just couldn't see the comments.

Speaker A Sorry. So hey, just a little side.

Speaker F I think that was all the I.

Speaker A Guess we're talking about the last question. Twelve. Right.

Speaker F We just think that because of that structure, there's probably a lot of politics and working the system going on versus doing the work. People might think that that is the work.

Speaker A I suspect that's not a bad assumption. And I think my sense would be if you were if we're in a real situation where you're actually not only done the interviews relevant to get the death chart, but you heard some of those stories that we've been talking about, the storytelling that we go on throughout those interviews. You'd probably be able to match that kind of data.

Speaker F It often happens for us if you.

Speaker A Can because everybody knows what's going on at the culture.

Speaker F I can talk from personal experience what happens in a dysfunctionally designed organization where when you have a manager two levels above you that can work the system and work with one that can't. Right. And everybody pays big time when you have one that can't work because they're not focused on the work, focused on trying to figure out how to get resources for their team or whatever.

Speaker A Or like I said earlier, doing the stuff like what does it take to get ahead around here? How about over here?

Speaker D Well.

Speaker B Also a lot of different discussions looking at the charts and some of the points that just mentioned something different. One of the interesting observations was that we didn't find any relationship for manager once removed. Manager and subordinates, that is. I mean, Mac, what you had was manager to subordinate. So you never had those three together anywhere. This is one interesting point in terms of Gem Up, and we're discussing a lot of the time the amount of the Gem Up at level four and level five. And what was also interesting is one question that we had was who was really assessing the CEO's role? Was it himself or someone on the board? And also, it's not very clear whether he sees his role or someone sees his role as five or six, which even increases the geometric level five even more. One of the other points when we see those arrows, I mean, the CFO is an event and the question is to what extent the role assessment would vary depending on the capability of the person determine the test. So does that manager operating at current capability, level four? Would he be able to design tasks at level four if he's being demanded level five? So, I mean, the CFO is an example boards that report their own roles at a level of yeah.

Speaker A One of the things that, generally speaking, on a generalized basis in our examples, for example, when we find that kind of a significant kind of arrows up kind of thing, there's kind of an indication that maybe this whole organization is or is trying to lift up something's going on in terms of its fundamental complexity. The tricky part in terms of collecting the data is when you're interviewing someone, you have to really make a distinction between am I listening to the facts here? And kind of dig for the facts in a pure leveling exercise in terms of getting a concrete example that you can cite of the work as opposed to am I listening to this person's capability. Yeah. So you have to kind of make that distinction. And again, the more you do it that's why we're advocating the more that you can get out and actually do some of these leveling interviews, these timestamp interviews is you'll learn you'll just get much more sensitized to the difference between the work and people and how to.

Speaker B Make some of those discernments, but also the opposite. As a manager, am I assigning tasks based on the capability of my support or based on what I would like my support? That would be there's always for you to explain the gap.

Speaker A Yeah, there's always a potential factor in there. But again, you're still trying to the assumption is in the left chart, you've leveled those roles on the basis of a really solid time span interview. That's how you got so you've got a concrete example or examples you can relate to that bears the longest task. Does anybody disagree with that. It has nothing to do with the person's capability, that's task.

Speaker B And also the last one that also interesting is that you have a formal organizational chart and you probably have an informal managerial relationship because with so many gemaph situation is my manager my real boss or do I recognize my boss as not being my manager?

Speaker A Well in some cases people will actually admit my boss is not my real boss, my boss's boss is and when I really need something I have access and I go probably have any farm but that's how we get it. One of my clients actually wrote a little paper that's kind of germane to some of this too, is that he called it the articulate incompetence. And really what he's talking about in some senses is that people at a certain level can often describe work at the next level up, but they're not ready to do it yet. They're adjacent to it. So if they see the next level and they see what it looks like, they can often describe it but they can't necessarily do it. But they got all the words around it. How about this.

Speaker C Were made?

Speaker G But just add to that the areas where there was duplication or the person placed above their manager that's going to cause a lot of frustration and where there's gap that's going to cause inability for someone to understand how their work actually is aligned to corporate strategy because there isn't someone to set the context for them. Just in general we thought that this company probably had a very high payroll because there's way too many at the core level. So high payroll burden, low reaction time, low decision making, low productivity place, I don't put my money in the bank. No one else brought up that point about that one box of orphans. In a situation like that if she doesn't have a home or whoever's running that operation doesn't have a home, that means no resources, no place to go in terms of things not working which means that position is probably not going to last too long.

Speaker A Yeah, for sure one of those nice sort of things to do in the business but it's not really funded and it looks good on paper kind of thing but it's not really real.

Speaker D Thank you.

Speaker A Last but not least, we have larger.

Speaker H Days of the comments that we've heard. I guess our summary would have been that slightly that there's a confused strategy at the moment leading to silos. There seems to be lots of opportunities for silos lacking integration across support. Good news is there's lots of opportunity to fix it and displaying that way I think is a good way to show those opportunities are yeah, as I.

Speaker A Said, what we generally find is that the picture, the old thousand words and the picture tells a lot of stories for people when they just look at it. They can just very quickly without a lot of explanation. If you've done a reasonable job of educating them about some of the principles, they can look at these fairly quickly and begin to interpret for themselves. Because often what we do with it is share with the people and having them know a little bit about the principles, if you will, having them talking about, what does that mean to you? What do you think some of those issues are, including all many of the things that we really great now, the reason we did that is we want to hold that because inevitably what's going to happen is you're going to start thinking about what the heck? What do we want to recommend that these people do? And of course that's what we're going to do tomorrow. So one of the evening assignments that we'd like you to do is just to start doing a little individual thinking before coming in tomorrow in terms of what would be some of the key things that you think for sure from a structural point of view. Need to change, need to be different in terms of levels or groups or whatever. So just give some thinking to that because tomorrow we'll do a little bit more input stuff and then the majority of the day, from late morning through to mid afternoon is going to be some teams to provide at least one redesign of this organization and a defense for it based on what we know. If I were putting on my academic hat and talking to graduate students who are going through this exercise, nobody would have gotten an A on the exercise for a very simple reason that when we brief, we tell the students about briefing executive management, president DP of HR. There better be some dollars on that, because otherwise it was very hard to get them to pay attention to. We did actually talk about a lot of things that ended up wasting dollars inefficient usage, confusions and all that sort of stuff, but we would very much want to have do you guys incorporate that as well? In this type of a process, you would be looking more for something very tangible. This one instance over here cost the company almost 10 million whatever. In other words, we look at organizational capital and human capital are some of the two big kind of intangible assets of organizations today. And so we try to our best to put some financials to that in terms of what that might be costing you and both in terms of inefficiencies or ineffectiveness, even salary costs where it's inappropriate when you pay more than you should for certain roles, for certain levels of work kind of thing. So yeah, the answer is yes. And then often if you have that baseline from the current structure, when you do some propositions, you can cost out the propositions too. So you can talk about what's the number of shifts in terms of roles at each of the levels and what would that translate into? Compensation up or down? So if someone has an idea of the propositions you're presenting from the baseline you started with, with this chart, which we didn't put on here, then you can give some kind of idea of whether this is an uptick in the cost of your structure, whether it's a downtick or whether it's neutral.

Speaker C Question around jam up. If you have a jam up, is it worse if you have it towards the bottom of the organization, or if you have it towards the top? Does that matter? Are they all equally bad?

Speaker A Well, I guess in the pure sense of if Ellie would say they're all equally bad, that's what he would say. My experience is that if you're going to this is moving to the next organization, the question will be sometimes, will it be purely requisite or will there be a jam up somewhere or a gap somewhere? Sometimes, for variety of reasons not to get into the organization may choose it's their organization, it's not ours. They may choose to create a purposeful jam up. The difference is that they understand that they have it. They understand that there may be a problem with it. And so our recommendation is, if you're going to have any, keep them higher up because you've got fewer of them. All right? So in other words, the people in that situation can manage that situation more easily than if you've got it down too low and you got all bunch of stuff at level three or a bunch of level stuff two. You got too many roles to have to manage that delicacy, if you will. So our push is if you're going to have one, but we really push never to have one if you can avoid it. But, but if I was pushing, I pushed, I keep them a little higher. So you have to be aware of.

Speaker G Them pardon me, more expensive at the top ten.

Speaker A Well, but the point is, one of the major reasons that we've let go of it is they are very clear for a developmental purpose. So for in other words, they've got a president at level five, and they'll create a jam up at level four to create an opportunity for someone to come in and be developed to actually take that role. But they're very clear that this is a path they're taking. This president is moving on in 18 months or 24 months. And this is just clearly a step. Our Suncorps was exactly the same way. Suncorps are a big energy organization. When I first started working with it, it was a level sixIST organization, moved to seven, but they had a jam up in between the they had a COO role in there. But the point is that COO was only there to replace the existing chairman, the existing CEO, and they had a timeline for that. And the minute the CEO retired, the COO disappeared.

Speaker D That doesn't always happen.

Speaker A It doesn't. But they understood the principles and they made it happen.

Speaker C I understand the logic. If it's higher at the top, it has less people potentially to be affected by it. But wouldn't it still have an effect, theoretically, all the way down? Because then the work up, like it keeps going up. Now there's an extra layer, let's say, on some sort of decision or something, that you're trying to change the accountability. You have one extra level of accountability as a workforce off, and that affects everyone down.

Speaker A Yeah, it can affect everyone down. Jam ups definitely complicate the decision making process again because it goes back to that thing of which of those roles has really got the D. Herb made.

Speaker E A really interesting point yesterday, that when you're creating a role to drive fundamental change in a part of the organization. You often want to establish that role at a level higher than what the eventual role will be. So when we were helping Owens Corning about 15 years ago introduce an entirely new manufacturing process, they said, well, we have ten plants. The worst one is in candyac Quebec. Let's at this point, start the project there. The plant manager role would end up at lower mid level four. And my recommendation was choose one of your best level five people to drive it, and the subordinate roles will end up being level three. Choose some of your best level four people to drive that part, and then make sure that they have an exit strategy so that they don't feel stuck in that role. And once the transformation is over, then you bring the roles down to where.

Speaker G They need to be.

Speaker E And that's a very powerful way of ensuring the successful implementation of a major transformation.

Speaker A Is this about role definition one struggle above, or is it about bringing in.

Speaker D Extra capable people in the role, which is designed?

Speaker E See, for me, the reason you establish a role is because the work requires a certain amount of brain power. That's why we're establishing roles at certain levels, because we recognize the work requires a certain cognitive capacity, a certain amount of gray matter. And so if the gray matter required.

Speaker A If you establish that role at that.

Speaker E Higher level, it's a transitional role. So the plant manager role was going to end in three years, and the four level three superintendent general manager roles were going to end in two years. So everyone knew that's the way it is. But as soon as they're gone, as soon as they finish, then the roles get established to what they should be. But it was a recognition that the work of making major transformation is often one higher level of complexity than the work of running what you end up transforming.

Speaker A I mean, let's put it this way. If you take this extant chart, Adriana, I would take that in our group, we would come back with certainly one, maybe. Two kind of requisite propositions. So in other words, the proposition we would bring back would be a truly reckless proposition. We say if you're going to design it purely recklessly with no jam ups, no gaps, this is the proposition of what it looks like. What we're kind of talking about here is that we know that the managers of that company, they're the accountable managers, not us. And so they're going to make decisions on the best basis of what they think their judgment is. And I think our job is to help them make those decisions as best we can. And to advise them and inform them is that if they make that decision about creating a Jam app or whatever, having them be clear about the consequences of that and how they might want to manage that in some kind of a transition way or whatever, but just give them best advice around the potential problems of that and to help them guide through a decision that if left to our own devices, we might not make that decision.

Speaker D Theoretically, jamaps to the bottom end of the organization is going to have an impact on service delivery much quicker than jamaps high in the organization. I say theoretically, jam ups at the bottom end of the organization should have a confusion, frustration, should have a faster effect on client service delivery more actively than the top end. So that's one more reason to solve it out at the bottom much faster than at the top. You may be able tolerate a little.

Speaker A Bit longer there for some reason.

Speaker C Another question earlier, I don't know who it was, but referenced the fact that within a level so let's say it was level three, you might have different degrees within that low, medium high. Would you see in terms of reporting structure, could you see someone at a high level three reporting to a low level four? Is that still okay or would you expect that it's still requisite?

Speaker A But is that some yeah. The reason when we found out what the processes were, information processes were, but only found that out late 80s, it accounts for actually why you want a one stratum difference. Right. If I'm at three and you're at three and you're my manager, I'm saying A lead to B leads to C, and all you can do is give me another D lead to E leads to F. If you can do the parallel processing, you can show me how my series interact with other people's. That's how you add value to me.

Speaker C So it doesn't matter that they might be like close to the close to the red line.

Speaker E It's better if there's a little more.

Speaker A Difference, but more difference. And if you're two levels above me, I can't track you anymore. I can't track what you're saying. So that there's a tie in between.

Speaker G Yeah.

Speaker I And the difference in the thinking is discontinuous, totally discontinuous. It isn't like a slow change and when somebody moves from three to four over a period of time, they'll do four thinking. Then if they're tired or they're stressed or they're whatever, they'll do three, they'll go back and forth. But once they're clearly in four, they are thinking very differently than someone at high three, very differently. And they can really add value to that person who thinks in pathways. So it doesn't matter if that's a high three or a low three.

Speaker A Okay, we're just right on our time. Thank you very much for that work and thank you very much for your work today. You guys had a really good work session today. We felt from Facilitator perspective. Hopefully Mr. El one. The little assignment again is just to start thinking a little bit about tomorrow. We'll have some putting some propositions together.

15 minute review.wav

ronadmin — Tue, 26 Sep 2023 08:11:07 +0000

15 minute review.wav

Job ID

1695715793

ronadmin Tue, 09/26/2023 - 14:11

Duration

953seconds

Summary

- What's been your most valuable learning so far? And is there a key question that you still have? That's kind of a real lingering question. We'll do a little polling around.
- It's not about the complexity of the task, it's about the complex of the role. I found it very interesting how quickly people looking at those role specifications without a lot of experience with time spanner levels. When you guys get together to do the designs, because it is like a puzzle.
- Lyn: Is it really clear distinction between the role and the person or maybe less? For the other roles we always interview like the manager about the subordinate role and for the CEO. If you have a need to talk to the CEO, push for the need. Lyn: Don't be shy to act.
- In 90% of the responses to that question, the one that's mentioned the most often is, boy, I would certainly like to have more role clarity. What's required is just a lot more work on helping people get more clarity of role control vertically and laterally.
- CEOs don't seem to pay a lot of attention to structure necessarily. Board should insist that CEOs are accountable for designing effective organizations. Research shows that it produces significant results. But the ability of a board to prescribe the implementation of Ro is shaking.
- All right. We've got to move on. To the section on. Three tier managerial leadership.

Video Link

https://aioperations.cmsmentors.com/project-transcription/govideos/00%20Profess…

Formatted Text

Speaker A Just this think a little bit back on since we started on when was it, two weeks ago? No.

Speaker B Just thinking back over that evening.

Speaker A And yesterday, what's been your most valuable learning so far? And is there a key question that you still have? That's kind of a real lingering question. So think of those two things.

Speaker C We'll just do a little polling around.

Speaker A What'S been my most useful or insight whole thing that I've picked up so far and what's a major question still hanging out, this one. So just give that a few minutes left. You're ready? What's your most valuable insight?

Speaker D Sorry?

Speaker A What's your most valuable insight?

Speaker E Which was the two and a half. It's not about the complexity of the task, it's about the complexity of the role.

Speaker A Yes. Very good.

Speaker D Anybody else? In terms of a key insight?

Speaker A Anything else?

Speaker D Key insight? I found it very interesting how quickly people looking at those role specifications without a lot of experience with time spanner levels were able to infer. And extrapolate from that what is the likely level of work of the role. That was very interesting for me how people could zero in on good.

Speaker E Cool.

Speaker A Bret, I think the interesting thing for me is there was a different way you talked about how we look at the time span of different types of point. So if you are an airline pilot, that kind of thing, all that breakup time span. I was at a session with Elliot one time when that whole question of the airline pilot came up and I thought at the moment his answer was really quite good. He said, I don't know, but you know what? What you really need to do is go and find someone in the airline who's being held accountable for the quality and effectiveness of the work of an airline pilot. That person would probably tell you what the time span is. I think that's a very important understanding. Right.

Speaker D Anything else?

Speaker A Yes, Adam.

Speaker C I thought it was particularly interesting and helpful to be with a team or the group and talk looking at gaps and looking at compression and looking how certain functions are or are not resourced and beginning to be in. That thought space and thinking about what are the consequences of the compressions and the gaps in the structure and beginning to sort of work with it as a puzzle and developing kind of a mental vocabulary and like an ability to kind of conceptually work with. That was very interesting.

Speaker A Well, I think that'll continue too, Adam, when you guys get together to do the designs, because it is like a puzzle, at least I would describe our work. We always treat it's kind of like a puzzle. It's a big thing and you're kind of putting all these little pieces together and trying to fit things together and always kind of going back. I think you mentioned this George Harding fellow that was a very valuable person to many of us he's passed away now but got us into this work because he's out in Canada. And he always said too, when we're doing the work, we go and collect data and we bring it back and stuff. He really pushed hard to say what does the Requisite principle say about that? In other words, if we don't ground our thinking and ground our recommendations and ground those things we're saying to our clients and the principles then we're just like anybody else off the street, we're just providing our opinion. So that whole notion of really doodling it and grounding it in the principles is really part of the path.

Speaker D Any other kind of insights?

Speaker A And I'll move to any question, any other major insights? How about questions? Any major burning questions that are still on our minds?

Speaker E Sustainability.

Speaker A Sorry?

Speaker E Sustainability.

Speaker A The sustainability of the work.

Speaker E Yeah. So I see consultants going into an organization saying that you have whatever period of time to set this up, then leave and then what happens afterwards? Nancy touched a little bit on it when she said I'd get a team of internal resources to do that work. But I think that's probably not the norm in all cases. And what happens after the fact when you're going two years later?

Speaker A Well, hang on to that too. Lyn I think because we've got a whole section just before we stop this afternoon on implementation and I think we'll cover some of those kind of issues and some of the opportunities and some of the dilemmas, if you will. Yes, sir.

Speaker F It's more like trying to understand those ones that yesterday we were discussing a lot and trying to look at different roles and their level of work. When we do that for the CEO, it was not completely clear to me and maybe understand a little bit more from your experience. How is that done? If it's usually done, the CEO look at his own role. You have to go to the board and have some type of discussion. And in that particular case, is it really clear distinction between the role and the person or maybe less?

Speaker A Well, I know in our work my colleagues can speak we actually do interview the CEO about his or her work, his own work.

Speaker F For the other roles we always interview like the manager about the subordinate role and for the CEO.

Speaker B We would interview.

Speaker A The CEO about his or her own role. We would interview the CEO about all of the director for his roles. And wherever we can, we will try to we've had it not in all.

Speaker F Cases, but in some cases we can.

Speaker A Usually get to a couple of people on the board that would be the most relevant people. Relevant? You can't really twelve person board?

Speaker F Yes, but there's usually a couple of.

Speaker A People on the board that are like the chair, for example, would be the person that I would normally try to get to see and usually can't. So you talk to that person or a couple of people on the board about the CEO's role and their expectations. So you kind of get a little calibration between what he or she says versus what they're saying. And for the most part, actually, fortunately, there's been more of the front and less alignment, which is a good thing. But yeah, I don't think the process differs that long. Just say we got to talk to you about your role and understand those things.

Speaker F One of the things, but try to understand better, because when you talk to the manager, I think it's very clear the type of tasks that are being assigned, the type of accountability. But when you go to the CEO, I'm not sure that it's always so clear, especially when you're talking about long term accountability. Maybe it's a misalignment on the whole system. Probably.

Speaker A As I said, our experience has been we get pretty good clarity from most CEOs. I mean, they're probably there because most of them belong there and they have a lot of clarity. So I wouldn't shy away from if you're getting client opportunity, I wouldn't shy away from asking as a consultant. We all have needs as a consultant to be able to do our work well, and we shouldn't shy away from those needs. If you have a need to talk to the CEO, push for the need to talk to the CEO. Don't be shy to act. The worst thing that will happen is someone say no. All right, but if you don't ask, you never know. One of the things I think about yesterday too, in terms of one question that we've often asked when you're in a larger project and doing interviewing a bunch of people, is start off with a question. We thought the question is this little exercise that we're going through that your boss or your CEO's commissioned to do this thing. What are you hoping to get out of this exercise? What would you consider would be some success criteria if this whole thing went really, really well? What would you like to see come out of the other end? And it's been amazing to us the kind of responses we get to that in terms of it's almost like a subtle way of getting at a whole cultural thing in terms of what people would like to see changed. One of the things that comes out from our research on that or from our experience on that is I would say probably in 90% of the responses to that question, the one that's mentioned the most often is, boy, I would certainly like to have more role clarity. It's amazing to me how that's so high. And sometimes in our work, what we found too is that sometimes it's not as much a huge or a significant change in the structure. It's what's required is just a lot more work on helping people get more clarity of role control vertically in terms of between bosses of ordinance and laterally in terms of rights and obligations. And some of the cross boundary stuff that Ron was talking about yesterday in terms of who gets to do what to whom, it's okay. Any other questions that are out there burning?

Speaker G Just got one call which is interested to ask the table. It's slightly outside of what we did. Your guys view on the reason why CEOs don't seem to pay a lot of attention to structure necessarily and then need to get in an expert to actually help them do it. Why that instinct isn't there in the first place to think I need to sort out my structure. There's obviously some structural problems going on. I can create role clarity by actually telling that person what I want them to do. It's not that hard, but yet they don't actually go about doing it. So I'm just wondering what your personal view is as to what it is that causes CEOs to not pay attention to this stuff until they end up in a mess.

Speaker B Let me answer a little broader question. A little broader question. Is there are two key roles that should have accountable sorry, I think there.

Speaker D Are two key roles in an organization.

Speaker B That should have some accountability. And I call it organization design rather than structure. It's bigger than structure. One is the CEO and the other is the head of human resources. When we go into an organization, those are the two key roles. Neither one of those in our experience, tend to have that on their agenda. With a CEO, one might say that the CEO has got all this stuff to do so he or she doesn't focus on this. There have been a number of comments in terms of boardwork. That board should insist that CEOs are accountable for designing effective organizations because there's research showing that it produces significant results. I would consider it a significant factor in risk management for both a board and a CEO, but it tends not to be addressed. Heads of human resources I presented a couple of months ago at a conference in the US. And there was general agreement. Number one, that organization design probably provided heads of human resources with the most significant opportunity for impact because a lot of the other impact stuff are small, right? Or bits and pieces, number one. Number two, it's probably the most underutilized intervention of senior HR executives. So a real paradox between those two. But it tends not to be on the agenda of either of those folks. And my sense is those are the two key folks.

Speaker G I've found the same thing, but I haven't come up with the reason why is that? But that's because we're all sitting here, right? Of course we're into this stuff. Is it boring? Is that the reason? Is it just boring? If you're a CEO like structure, how boring is that? I'd rather do something like product development.

Speaker E Or maybe speak from personal experience, because a lot of this stuff falls into this gray area of you don't really know who owns it. Is it CEO? Is it, HR? Is it COO? I mean, who knows? I personally suffer from this.

Speaker A Jerk.

Speaker D We learned very early on a CEO doesn't take ownership over it. We may have a project. We will not have a successful project. So the initial two weeks of engagement here's, phase zero A and zero B, I make it explicit to the CEO, I've got to determine whether you're serious about it because you're going to waste your time, your money, my time. I feel I have to put the tail on the donkey for that. We've had a number of board members who, when the CEO drove a successful project, got very interested in it. Some have come to our seminars, and it's an interesting dilemma. One in particular has introduced us to the CEOs of seven other companies where he's on the board. But a board member can't prescribe to the CEO that they use Ro because that then gets into their executive accountability. They can strongly urge them to look at it and to further suggest that the information we would get back from you will help us with our fiduciary accountability, because we now know the integrity, the efficiency of the organization. We now know whether you've got a huge risk with a weak talent pipeline. But the ability of a board to prescribe the implementation of Ro is shaking.

Speaker A Well, I think maybe the question in that one is that's probably a research project. Maybe we need to go and ask them why.

Speaker G I think the answer is don't know.

Speaker A I don't know. Yeah.

Speaker D All right.

Speaker A We've got to move on. So, Nancy, we're going to move on.

Speaker B To the section on.

Speaker A Three tier managerial leadership.

The fit to role.wav

ronadmin — Tue, 26 Sep 2023 08:11:07 +0000

The fit to role.wav

Job ID

1695715793

ronadmin Tue, 09/26/2023 - 14:11

Duration

2567seconds

Summary

- In organizations, what are people looking at to make that distinction between those three who can and those four who can't? Too often it's likability. Human capability in dealing with complexity varies from person to person. Good performance doesn't necessarily indicate potential.
- The required behavior is do you have the self control required in order to control your tendencies to behave in ways that are not required otherwise? In terms of manager, the formula up applies for managers as well. There is something called aptitudes or natural talents. It's not the skill itself, it's the capability.
- We tend not to use the minus T or the required behavior. Skilled knowledge is broken into three categories. We use that word instead of valuing the work. Do you fully apply yourself to all requirements of the position?
- Is anybody going down the route of Robert Keegan stuff and. Making an assessment in terms of subject object interviews? And how do you guys want to talk about how you see that?
- Cognitive computing is very popular right now in the world of information management. It starts at the board level and goes down to the role and whether or not we have the right role motivated and extended. The whole field is just starting to get a little bit exponential right now.
- An 11th century Chinese text written by a Chinese neocompuccin philosopher called Shane Kirk. Describes six levels of complexity in managing a confucian state. In terms of complexity decision making. Of support Sandy's point about the natural. Law of the natural ancient things.

Video Link

https://aioperations.cmsmentors.com/project-transcription/govideos/00%20Profess…

Formatted Text

Speaker A So this little section is about the right people for the right work at the right level. So it's the whole notion of fit to roll. And the history of this of course was as the original research was taken, they came under really kind of the sense of these levels of work. But intuitively what happened with people was yeah, that makes a lot of sense and we can see that. But at the same time, when you look at that, you just intuitively know that some people in the world are more able to do work at a particular level, at a particular time than others. There's something different about us in terms of our ability to do that. So intuitively people would say here we have this level four vice president role and we'd have these six or seven people that would potentially be considered candidates for that role. But somehow people intuitively could say, well, those three people could probably do it, but those other five can. So the question is in organizations, what are people assessing in your experience? What are they looking at to make that distinction between those three who can and those four who can't? Too often it's likability. Likability. And sometimes you're right, too often likability one. What other might be in there that people are using as a criteria to assess whether stuff they've heard, stuff they've heard about that person education, their education, perhaps their training as well, their rates.

Speaker B Of progress so far. So the assumption is if someone has.

Speaker A Been progressing recordly, they must be good. They must be good. Often your own image I read our own image. Halo effect, sometimes psychometrics. Psychometrics, yeah, that's right, because sometimes we use assessment tools.

Speaker C Effectiveness in the current role.

Speaker A Effectiveness and current role, probably a minimum critical specification. And if they're not performing well in the current role you're considering although if I go back on the question again, it's a distinction, fortunately a little later on, by the way, in Xerox, I was asked by my president to fix our performance appraisal system and so we got into a whole exercise around that. The main distinction we learned was there's a separateness and a relatedness between performance and potential. Good performance doesn't necessarily indicate potential and poor performance doesn't necessarily indicate lacking potential. So having to make that distinction. So I think what we're kind of saying in some respect is maybe some of these kind of colloquial things we use to assess may not be detailed enough or finite enough relative to our needs and reckless organization. Because what was really determined, of course, is that human capability in dealing with complexity varies from person to person. It's the old adage is that what seems to be true is that we get smarter as we get older or our ability to handle increasing complexity goes up as we get older. Seems to be true. However, what also is true is that it really varies from person to person. We're all kind of on a different track around that to some degree, in some circles, this would raise the old does raise the old nature nurture controversy in terms of on a personality or temperament basis. US the old debate between the skinners and the youngs and the maslows of the world in terms of whether we come into the world with something or not. And I think that whole community has really reached a place where who we are today is a product of both what we came into the world with and our social education. What appears to be true in the world of cognitive science to the degree that and, boy, what I found out of the last particularly spending a lot of time with the last five years, is that this is a complicated subject. It's a really deep and amazing subject. But I think in principle, we're learning that there's something about our development as human beings that's also, at a cognitive level, occurs in a very developmental way. We kind of come into naturally come into the world with some proclivities around that, and it fishes over time. So it's got that sort of a curve to it. In other words, individuals sort of start out at someplace, and then there's a series of curves. Look into some of the reckless stuff. You've seen all those curves that have developed around that in a much more detailed way than I'm showing on here. But that's the basic principle of it. So the notion would be is that at a certain point in time, be it a point in time or whatever, if you could determine what is their cognitive capacity for processing information in a hierarchical organization according to level. In other words, what you're saying is, if you have a role at level three, what you'd be interested in doing is finding out if your candidate or candidates that you're thinking about are able to process information at that stage, at that level, because it becomes kind of a minimum, but insufficient criteria, if you will, to select a person to role. Basically what it's saying is, overall, what you're trying to do is get people in the flow. What you don't want to do is to essentially put someone in a role that they're not quite ready for yet, because that's going to create kind of an overwhelmed and stressful situation and cause some frustration and potentially cause some performance issues, shall we say. And that becomes a problem for who? Their manager, because the manager is accountable for the outputs of that individual. So it's not there. The other side of it, of course, is if you get someone into a role who is for, let's say for an extended, reasonably extended period of time, who's more capable than what the role is required, you really get the same kind of effect. You get stress and frustration and some other thing going on and what's likely to happen in an organization, if you've got a person in that underwhelmed condition.

Speaker C For too long, look outside, look for other opportunities.

Speaker A Yeah. When the headhunter calls, they're more likely to. One of the things that Elliot Oliver says is that people actually have sort of an intuitive sense of their capability, and if they can match it with an actual role situation where they know they can do what's expected, of them, hands down, and they're under challenged. They're just not being given enough bandwidth to kind of exercise what they know they can do. Yeah. They'll start looking around to find a place that either in the organization and start lobbying for a change in position in the organization, or they'll answer the headhunters, what potentially else could happen in that situation?

Speaker C So they start their performance goes down.

Speaker A Their performance could go down.

Speaker B Absolutely.

Speaker A Yeah. And we'll see that in a video a little later.

Speaker D By the way, the head of the largest labor union for the federal government is as capable as the commissioners of many of the federal agencies. Level six, level seven. So people go into they'll find other ways to express their capabilities.

Speaker A Absolutely. And that's a really good point, because two things we find happens is exactly what Jerry is saying. In the inco, for example, the engineering department had about 25 engineers in it. The majority of the work was level two engineering. All right? Occasionally there would be a level three engineering project, an 18 month project or whatever. But when you started to meet these 25 people, you could recognize guys and gals have been out in the field for like, 1012 years, and yet you kind of look at something, they've just got more capability than they're being asked to do. What's that all about? And you find out that when you talk to them, there's other factors that people are using in an organization that doesn't relate that to them. They say, Look, I'm in a lovely town. It's a great place to bring up my kids. I make a pretty good salary. I can walk away from this job at 05:00 and not have to think about it and come back because I can do it hands down and that sort of thing. Then keep talking with a few of them. Well, the board of the local hospital. So people have these other ways of getting these needs met. The other thing that I find that happens sometimes is what we call is they create mischief in the organization. Mischief in the sense that because they have that extra capability they will start getting into things that match that capability and want to do things and want to get things going in an organization which at some level is kind of a good thing. But sometimes it's not within the business plan or it's not what we really need right now. And so you've got this extra little bit of management you have to do with these people in terms of but that's where you get into the cycles back to the mor thing. So if you've got a person that's in a role, underwhelmed in the sense of what are the kinds of things that Mor should be looking at relative to dealing with that situation.

Speaker C Wouldn'T you also find that situation with brand new just promoted an individual, put them into a new role, wouldn't they typically then be overwhelmed and given a period? 1% sure.

Speaker A I think the difference is being overwhelmed more because of the newness and of what they need to know about the organization, about the job itself, as opposed to their inherent capability to deal with the work. That's the difference.

Speaker E Also, we've seen occasions where maybe sort of things are slightly counterintuitive that two senior people, both promoted fairly senior jobs, one of whom is feeling slightly stressed, the other who is fine.

Speaker A Right.

Speaker E In fact, the person who's slightly stressed wasn't going to support from the mor to make that transition. The person who wasn't stressed thought the.

Speaker A Job looked like this and was quite.

Speaker E Happy doing that part of the job while the rest of it was going. And so there are other things that you need, other balances that you need to look at very much below the first immediate stressed or underwhelmed experience.

Speaker A Yeah, what I was trying to get at you with my question a little bit, just in terms of giving the answer is obviously looking for work experiences that you could give to this individual, a special project, something like that, that.

Speaker E Could really tap into there.

Speaker A The inco thing that I thought was really good is that, well, the organization design was that these roles would be placed at level two for those engineers. There was, as I said, occasionally these projects would come along that would be a level three project, 18 to 24 months kind of thing. And so what they did is they identified those people in the troops who were level three capable individuals. So they actually gave those level three assignments to those individuals. Then you say, well, but now they're going to be doing level three work, but they're level two and pay people creatively. What the company did was they actually paid them essentially the equivalency, if you will, of level three pay for the 18 or 24 months that they were in that job. However, what they did is they didn't put it into their salary. They took that amount of money and put it into their long term incentive point. So they didn't get used to having this extra boost in salary and all that kind of stuff, but they got paid that amount for that period of time and that money went into their law. I thought it was incredibly creative in terms of basically what came out of the requisite work was that Elliot would say that the fit to a role, in other words, a person's fit to a role is a function and there are four really major components to the function. One is this one we've been talking about in blue that you were referring to earlier. Nancy named different things, but the concept is the same. It's that information processing capability that relates to the ability to process information in relative to the complexity of the role that they're dealing with. Level three, four, two, whatever it is, that's kind of a minimum and insufficient criteria. The other thing that a person would need to have would be the skilled use of knowledge or knowledge and skills to do the particular job that we're talking about. We're also finding that some work in this whole field is being done and we kind of came across it recently where there's also some ability to assess some basic competencies by level. In other words, there are some distinct competencies that are required at each of these levels. Almost generic competencies, if you will. The fourth one or the third one for me is really valuing the work. It's the notion of if a person really doesn't value what's being offered to them in terms of the nature of this job, even though they have the information processing and they have the skills, if it's not motivating to them, they really aren't going to do it very well for very long. So you really have to assess whether there's an orientation there towards that particular type of work and that particular role. One going back to engineers again, that's another one we've often found in our work to get into is a lot of young engineers go into engineering because they really want to be top notch engineers, professional engineers. That's what they want to do. They get into organizations and to get ahead. If there isn't a good technical ladder, for example, the only thing they can do is take a managerial job. But they don't value managerial leadership work. And you find that they don't do it very well because they really don't value doing it. They'd rather just go back and do well a good technique. So that's sort of a simple example. And then the last one is really and this day over the history. I mean, originally, I think Elliot called it minus t, which is sort of a minus temperament. It was kind of a know, this person was kind of screwed up in some way, whereas he kind of took more of a positive orientation to it later on in terms of saying what would be the required behavior. Of an adult human being in this particular role to ensure that there wouldn't be anything untowards in terms of causing any dysfunction and being able to carry out this role. And that's where you get sometimes you get into the psychometrics in the sense of sometimes you can use some of those things to kind of assess what kind of a character are we dealing with? And is there a central fit between this human being's temperament in terms of what their needs are, which is what temperament measures are? Will that be a reasonable fit with this role? Just another piece of data to help management make a judgment or a decision about whether that's the right person or not.

Speaker B Whole question?

Speaker A Yeah.

Speaker B Required behaviors. What's the view on behavioral competencies? Behavioral competencies and leadership competencies and things like that. In the original work, there seems to.

Speaker A Be no place at all.

Speaker B And managers are allowed to express their own style and their personality doesn't really matter as long as it's not functional. What we're saying required behavior is a more sort of positive statement, which to me, borders on the more traditional work on these mental insurance.

Speaker A Well, I think you're raising like we could be spending the next week talking about that subject.

Speaker F To my understanding, and it's one of, probably every one of us here has his or her own understanding and people in the other room, but the correct understanding for that term, required behaviors. Each of us has tendencies to behave in ways that are not required. Right. And the issue is you may like to drink. Can you every day come in sober? Right. You may have a temper, but can you stop yourself from screaming at people? So for me, my understanding of RB or minus T is do you have the self control required in order to control your tendencies to behave in ways that are not required otherwise? In terms of manager, the formula up.

Speaker A There applies for managers as well.

Speaker F You're being considered for a Stratum Five managerial role. Do you have CIP? At Stratum Five. Do you have skills and knowledge to do the managerial leadership practices? And where it often goes wrong is do you value doing that work also.

Speaker B At Level Five, fitting the organization in an external environment? One would think that you also need to be able and to value building that external network of relationships which all of that competencies.

Speaker F It's all part of valuing the work.

Speaker A That's where the B comes from. What RB at five and up is leadership presence, platform skills. If it's skills.

Speaker F Skills and knowledge.

Speaker A Okay.

Speaker D I've wrestled with the required behavior that might ASP for a long time and had many loud arguments because Ellie was that I finally come to terms with is everyone has a wide range of behaviors under different sets of stressors. Some people require fewer stressors for them to act in a more extreme measure. Some can have that self regulation that you talk about under extreme pressure. So the issue for me is, does this person exhibit behaviors that are sufficiently extreme that they disrupt the work? So we call it the X factor. It's extreme behaviors that disrupt the work. The other thing that finally hit me about two years ago is I've always felt something's missing in that. And it finally hit me that there is something called aptitudes or natural talents. And the way I think of it is you can have three computers with the same processor speed, the IPC, but one of them has circuitry hardwired for graphics, for gaming. Another one has circuitry that's hardwired for music, another one for complex calculations. And what are those? Aptitudes well, there's musical, mathematical, there's artistic empathy. There are a bunch of things that I think are hardwired that, for me, represent the cherry on the top of the Icing. It's the last thing we should consider when we're looking for someone in a role, but it is not a trivial matter. Some people, I'm tone deaf. I couldn't play a musical instrument if my life depended. I may value playing music, but I just don't have the talent. I don't think that's a skilled knowledge issue.

Speaker F Elliot I never saw him write about this, but in conversation, he referred to talent as the constitutional ability to acquire.

Speaker A A type of skill.

Speaker F So when you talk about, like, mozart wasn't born writing music and playing it, but unlike you, he was able to acquire the skill.

Speaker D It may be self acquired, yeah, but it's still acquiring. But it's not the skill itself.

Speaker F It's not the skill itself.

Speaker D It's the capability. We have five things in our formula.

Speaker A And I think the issue with this, in the sense in answer to your question, I think sorry. Is at the end of the day, I'll speak for myself. What I think our job at Core National is relative clients is working with them at a minimum to help them understand in whatever way we do it, from tools to instruments to whatever that they are able to feel. That they've got enough information to make a sound judgment about whether an individual has the capability to do work at the level they're talking about. And I say judgment as opposed to decision, because I think at the end of the day, what you call deciding to put someone in a role, what you're actually doing is making a judgment. You have absolutely no idea how that's going to turn out. You really do not. None whatsoever. So the notion with our work is we try to help clients, over time, increase the confidence in their judgments about the selection for role based on that minimum specific criteria. Primarily what we also advocate is that and we developing a set of tools for that formula that can give that data, if you will, objective data to that individual that provides a much more holistic picture. The kind of things you're talking about, Jerry, in terms of and the temperament factors or whatever labels you put to it that give a more holistic picture of an individual, but focusing for sure on whether that person is capable of working at the level we're talking, first and foremost. The other factors are so variable to the human conditions, all right, that there's not a science to that.

Speaker B I guess just come up with a distinction between this and competencies and other.

Speaker A Stuff back to my head hunting days.

Speaker B This to me sounds like deal breakers. This is the set of deal breakers. The person fits the role or not. The others competencies and values and things like that. They are tiebreakers. If you have two candidates who have this, you're correct. Then you can judge on the mentoral aptitude.

Speaker A And again, the word you used is judge. You can judge all right on the basis of that. And then, as I say, make what we call a decision to actually put the person in. But I think again, I think what's learned if you think of how the as I've been studying this somewhere, how the human brain works. I mean to just to isolate the information because of the front part of the brain from the back part of the brain is probably not a good idea because holistically, our whole functioning is in that. But that is really measurable. And there's various tools out there in the world for measuring that IPC. So I really push on this. Is that a minimum? It's really helping clients make sure that they're getting that in the flow, that if it's a level four role, they've got someone who can process information at level four complexity. And that is measurable and determinable.

Speaker D One of the things that we've been very pleased with the clients and the managers really incorporating this is when they have a slate of potential candidates, they now go in sequence. The first is the IBC. The next is they don't have any bad behavior because they don't want to inherit that. The next is valuing the work. And the final one is, do they have the minimal necessary skill knowledge? So that becomes the fourth thing they ask, whereas most companies, it's the first thing they ask.

Speaker A Well, that's why we asked that fun little question at the beginning, what do we use to assess? And I think what we're saying is, as Gary said, you kind of start with that minimum critical specification. You've got to start there and make sure you've got that at a minimum. And then I like the notion of the tiebreaker thing, Andre, because is that judgment stuff that has to go in there in terms of there's all kinds of dimensions to it. And again, various tools for measuring those various components.

Speaker G I want to say something about the minus C I happened to be working with, learning the process and working with Elliot at the time that he stopped using it.

Speaker A Oh, yes, okay.

Speaker G And the reason he stopped using it and some of it came out of the experience that we had, is you're trying to get them to understand IPC, which is not a trivial exercise because people do that. When we were using minus T, there was a tendency to attribute everything to minus T, and it was extremely difficult to get people off management off it. And we just dropped it.

Speaker A Yeah, interesting, I didn't know that process.

Speaker F Well, just an example I had with that is when you have a manager who abuses subordinates, screams at them, minus P, whose accountability is their working behavior, it's their managers. Has the manager actually had that conversation with them, and very often they haven't. This is how we do things at home.

Speaker A We scream at people all the time, oh, I'm not supposed to do it here. And that's how that caliber, that's going back to that calibrating effect that a manager must remove. Has if you think of it, they're assessing as a manager of a manager, they're assessing their manager's effectiveness in performing those managerial accountabilities and authorities that Nancy was talking about and the practices that go along with management. So there's some assurance in the organization that people are being reviewed and assessed on the quality of their managerial leadership effectiveness, not just their results. And we all know in a lot of organizations, it's more about results and less about how you got those results. And so sometimes you get really good.

Speaker E Results, but that somebody individuals caused a.

Speaker A Pattern of death and destruction for a few organization, well, that would be happening.

Speaker H Just to add another dimension to it, we actually tend not to use the minus T or the required behavior. And one of the changes we've made is we've used some material from Ian.

Speaker A McDonald and some others who have written.

Speaker H A book on requisite organization. They're affiliated with Robbie and BIOS at this point in time. But what they did is they slightly modified the three categories and skilled knowledge. Skilled knowledge is broken into three categories. So one is knowledge could be certification knowledge, whatever. The second is technical skill, and the third is social process, or people skill. And the social process skill, the minimal requirement is for every employee that you get along well, working teams and so.

Speaker A On and so forth.

Speaker H But it changes as you move into different positions. It gets into managerial leadership type things. Not the skills themselves, but the capabilities from a people perspective to do those sorts of things. So we found that breaking those down into those three categories was useful. And they also changed the word valuing the work to application. And we use that word instead of valuing the work.

Speaker A Same idea.

Speaker H But what they talked about, which I found useful is the idea is do you fully apply yourself to all requirements of the position? Do you fully apply yourself to all requirements of the position? And the obvious ones are when you move from managerial or professional roles into, I'm sorry, professional or technical roles into managerial and not really valuing the managerial, but even in the managerial role, there are a number of different expectations. So do you really fully apply yourself to all of those requirements as opposed to doing the pieces of it that you like? So I found that those adaptations that they wrote about were very useful. And another way of thinking about it is that when we look at IPC, IPC helps you determine what strata a person is capable of working in, whereas skilled knowledge and the application or valuing the work applies to a particular position. So one is stratum related, and the second one is position related.

Speaker A So I think you can see that there's some variation in terms of how this is being looked at in the room and in the world today around this. But again, my emphasis and our hope for emphasis is making sure that at a minimum, that you're helping the people make those right decisions and doing the right calibration, whatever the language you want to use, that a person's got the capability to do the work you want them to do at the level. Michael, I don't want to get too.

Speaker F Far field, but I did want to.

Speaker A Ask the panel, is anybody going down the route of Robert Keegan stuff and.

Speaker E Making an assessment in terms of subject object interviews?

Speaker A I'm not looking at that a little bit. And how do you guys want to talk about how you see that?

Speaker E Oh, God.

Speaker A What we know is that I think Owen relationship at that higher order in the Keegan stuff relative to general management work, I think that's the main connection so far that I've gotten out of studying it is that, Paul, can you help me to see if this fits? There's a word again, which Rebecca semantics.

Speaker F But there's a word that's very, very.

Speaker A Big and very popular right now in the whole world of information management. That word is called cognitive computing. And the irony is, of course, when we're in this building, you see the bust of Watson downstairs. That's actually the product name that IBM uses for cognitive computing. If you remember on Jeopardy. A few years ago, you actually had Jeopardy. Champions playing a question, and Watson would answer it earlier than the three Jeopardy. Champions. So one of the things we see now, which is very, very powerful, because, again, it starts at the board level, and we really go down and we really basically ask, are we really, from a problem solving cognitive computing perspective, are we asking the right questions? Are we solving the right problems that's going to help this institution, this enterprise, be successful well into the future? Because we haven't kind of worked out what those questions are. And again, we got to figure out how would we answer the questions that's an information solution as well as a role based or people solution, but by working out again. So I don't know if that fits under information processing capability, is what I'm getting at, because it's the overlap of the cognitive computing with whether or not they can actually answer those questions. But when we actually then take them down to who are the leaders and who are the problem solvers in the business, we do get down. To the role and whether or not we have the right role motivated and extended in the right ways to answer those questions. And I just don't know if this fits. If you're going across the incentive, I think that's a worthy topic to really explore in a lot more depth. But my intuition would be when you think of processing like a computer processes so in a human sense, it's how information gets brought in, how it gets processed and turned out and on the output is a decision, an action. And so I think for me, intuitively it fits there. But I think there's some again, what we've learned in terms of looking at this in more depth in the last two years in our little firm, is that this whole subject is just incredibly deep and wide. And the kind of recent discoveries around human cognition. And that whole field is just starting to get a little bit exponential right now, which is a little confusing. But I think what I can tell you from a practical point of view is that what we found, generally speaking, if doing some of the stuff we've done at this point really helping managers have to make these selections. That they really understand the notion of level of work, and they've got a reasonably pretty good, accurate idea of what that level of work constitutes in terms of what's going to be required and the nature of it and the kind of mental processing that's going to be required. And they can have an understanding of what some differentiated descriptors of processing capability looks like. They can start matching that to human beings fairly accurately. It's not perfect, but it's fairly accurate. And so sometimes, again, in the issue of budget, there's only so much budget and yeah, you could apply career path appreciation, you could apply any number your techniques, Glenn, for looking at there's all kinds of things to do, but the question is do we have the time to do that? Do we have the money to do that? And how confident do we feel as managers in our judgment from what we've learned from you Paul, about the nature of the work and the nature of capability that allows us to feel fairly comfortable in making our own judgments about putting people involved. And if we make a mistake, well, just like you do in any other mistake you make, you correct it.

Speaker D I think that our understanding of CIP or whatever we call it does inform us to some degree because abstract conceptual thinking doesn't begin until level five. And to be able to ask and answer the question what is the problem we're trying to solve? Not what our solution, I believe requires minimally level five capability and to really come up with a range of models that requires level six capability. So I think that if we're now looking organizationally, where do we need to put in an IBM minimally? The role that's going to be driving. That has to be level six.

Speaker A I would agree, because, again, what we often find when we do this is that the questions being asked in the company today are not the questions that are going to apply to success five to ten years from now. And in terms of the talent strategy and the kind of people and the kind of compensation, if they're not willing to address those issues, then we go through an awful lot of work. And for that reason, I go back to the conversation about the three tier management in the sense that if you have that mor, those kind of hearing meetings, if we guys sometimes call them going on fairly constantly, you're accounting for those changes in the operating environment. I think part of those conversations, that's managerial work, that's what gives it exactly.

Speaker E Just to tie actually the way we.

Speaker F Open today is to give everybody, I.

Speaker A Think, hope in the meeting, at least those who work in the US. Since 2007 and 2008. It's actually come out of the Dodd Frank legislation. There's a lot more formal emphasis right now at the board level on CEO succession plan. It's really a mandated requirement, and it's working into directors and officers, liability insurance. It's really working itself into the infrastructure of corporate governance and behavior. So this argues for this top down, if you will, seven, six, five thinking, because it's all about valuing the solvency of the business for the future, and.

Speaker D Then it's the sustainability.

Speaker A There's a lot of helpful advantages that are coming out of those things in terms of making boards aware, more aware of their real accountability relative to some of these things, in terms of what they're measuring performance. A good colleague of ours, I thought he might be here, Mark Van Cleef, does a lot of work in that whole field around, really looking at the whole notion of what boards are doing or not doing relative to what they're holding CEOs accountable for and what they're measuring them on and that sort of thing. He did a little bit of research.

Speaker C And a lot of work in Felt fair pay. I mean, he's really after this ridiculously, outrageous pay that's being paid to many CEOs in the US.

Speaker A Just on that example, he did a little run of some stuff. They took 13 companies, I think, in a sample, and Fortune 500 companies, and over a period of five years, those companies destroyed destroyed $3.5 billion of shareholder value. Those executive teams on those companies were paid $1.1 billion to do that. There's a metric coming out of the US. Okay, so just in terms of what's in the requisite stuff, is that what Elliot was talking about is that there's kind of three levels of the capability. One is the current applied, which is where people are actually working, and the middle one and an important one in terms of the hearing exercise, really in terms of assessing people is that CPC the current potential capability? Where could an individual actually operate right now if given the opportunity to do so? So ideally, what you're looking for at a meeting with to select somebody, you're looking for someone whose CPC is exactly at the level that you're looking for. And then once you know that at a particular point in time using those curves or just using some general assumption that they're going to continue to grow in their capability at some point in the future, there's this future potential capability in terms of where they might, you know, for some firms, it could be very important. It is very important to identify as precisely as they can where that is. So that, for example, if you build that back into the mor process, if we know that Paul has an ability five years from now very likely to be taking a role at level five, all right, then we know that we have to do some things from a developmental point. So the Mor goes into business and says, okay, what's the development? And that plan that we need to put in place for that and who needs to do what to be held accountable for what? To make sure that that development happens. So that when Paul is ready and we need to put him in that role. Everything's in sync. You had a question earlier.

Speaker I Yeah, we might take it back just one step over it just goes back to that cognitive computing question as well. The one thing that attracted me originally to the aura work as looking at things, work coming out of MIT, work coming out of the people's capability, maturity model stuff, even work in the It maturity space process. Maturity space is that there's a universal truth. And that universal truth is when you look at all of this information and you kind of interpret some of the stuff a little bit, but if you have enough distance from all of it, all of the leveling that all of those models do are similar. If you really stand enough far away from it, there's a great similarity in all of them. So I think there's a universal truth that lies at the bottom of all of this. Now, a universal truth for me is a natural law, how things are. And when you start looking at that universal truth, even in that cognitive computing space, it literally appeals or matches so.

Speaker E Well with the Oro work.

Speaker A And that is the pieces that I.

Speaker I Think is valuable as one looks at this type of content in organizations and how functions start to come together. Revolution in the It space. The revolution in the information. Big data space. And bring that back to the universal truth of certain layers of complexity exists and pushing all of that content back into that natural layers that is driven by man's cognitive ability. You get so many things that we can do consistently in companies and organizations without having to bring different models in that confuses people all the time.

Speaker A If you just go back to what.

Speaker I Is that universal truth, and I think auto is part of that universal truth that sits there consistently and mapping things back makes so much sense to it. And if you build from that element, that initial measure in that capability element is that cognitive processing piece is really that I fundamentally agree with it. It's the baseline and the root of everything, no matter how you look at it. If you look at information maturity, it maturity, process application, process maturity, the process maturity model work comes out of India. MIT all says the same thing, just stand away further enough and you actually see it.

Speaker C That's why Elliot called it requisite, because the definition of requisite is according to the nature of things. That's why he chose that word to.

Speaker D Name the body of God.

Speaker I You see, interesting is when you use the word requisite, other people read things into it.

Speaker C I don't.

Speaker I And that takes you down a tunnel, which is not always worthwhile in the beginning. Just stand far enough from it to understand what it can be trying to say and then choose how deep you want to go.

Speaker C But then to Jerry's point, it may be that you have to be to understand universal law, whatever, move on.

Speaker A So again, I think the main thing that we've said in there is that notion that if it's requisite, it's going to be requisite and Ro based. That whole notion of information processing capabilities, the level of work that you're talking about is going to be minimum, but not sufficient criteria. It's one that really can help people understand and to apply and to help them make better judgments and get better fit to role. All right, you're talking more about how to do that or no, that's it. However, what I would say is our bias colleagues are really steep in this whole matter. And I would say some connections with them would be conversations around the next few days would be is that some very sophisticated ways of working on it. Can I just have one thing?

Speaker E I know we can very quickly oto's point about some deep universal truths. One of the texts that much rather than open Jillian on Earth was an 11th century Chinese text written by a Chinese neocompuccin philosopher called Shane Kirk. And I do the Kirk because I had my pronunciation correctly recently, and he described spawn into the swimming industry six levels of complexity in managing a confucian state, which kind of not quite word for word, but absolutely in its essence we would wholly can completely massively recognize. So it's really, to your point about some exploitation and naming some fairly new truths about cognitive capability and social parallel.

Speaker A In terms of complexity decision making.

Speaker E And it's just, to your point, sort.

Speaker A Of support Sandy's point about the natural.

Speaker E Law of the natural ancient things.