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- Levels of work is about achievement through systematic management. When I was chief executive of three NHS organisations, I made them three star trusts. But achievement requires more than just levels of work. We need to work across levels and dynamize that to get true achievement.
- Chief executives are always going to be judged on action to solve problems and create achievement in the organization. There are four domains of functioning which chief executives and organizations need to operate in reforming the operations as one. Achievement depends upon growth as much as well functioning operations.
- Not every role can cope with every decision. Individuals have their own preferred and optimum decision style. That needs to be recognized and matched to the requirements of the job. So there's a further framework that's required.
- It's clear that achieving is always a challenge. Management is complicated, it requires many tools. In your experience, what is the biggest challenge to achievement? The one that I found to be most challenging was the power mode where people basically function through intimidation.

- Elliot Chung: I went back for a master's in business administration focusing on human behavior and managing organizations. He says an organization asked him if there was a consultant who could help implement his ideas into the company. Chung: As a result of his work, I wrote a book available in English and Spanish.
- There is a sensible, comprehensive, science based way to manage our organizations. Managers are accountable for the results of the work and for the working behavior of their subordinates. Accountability authority cascades down through an organization. And finally, they have to exercise managerial leadership.
- The manager is accountable to give work to the subordinate. The subordinate is accountable for doing the work that the manager assigns. It is a two way working relationship. Instead of calling appraisal performance appraisal in English, Elliot calls it personal Effectiveness appraisal.

- Move to the talent management function or the process of talent management. This is very often where human resources get called in for rescue missions. If managers are not clear on the task assignment, they may not necessarily make the best selection. They need to value the work of the role.
- As far as a diagnostic, the next piece of it in terms of initiative, process, work as elements of the selection process, how we work with managers. You have to make sure that you're clear on the role. Both the manager and the manager once removed are involved in the interviewing process.
- Then we talk about managers providing orientation for new employees. And I have found in my practice that if you can teach managers also how to do this, you can get an employee up to speed and much more productive more quickly.
- The next thing that happens or in the cycle of how an individual may or may not stay with an organization is deselection from a role and redeployment. At the heart and soul of this, it's also very much a trust inducing situation.

- You have to start from the top. As close as you can get to the top, the better you are, because that manager will model that behavior for the entire organization. Part of our struggle in the United States with training and development is this system is perceived as just helping managers be better managers.
- When we talk about managerial accountabilities, it applies to everyone that is a manager. Therefore, if you don't have the support of your senior level management, it is going to be very difficult. It is not impossible. If you as a manager can carry out these managerial practices.
- Sandy: I teach values and culture change as part of change management. These are deep systemic changes. In order to implement this, it's very often a culture change, which I believe takes 510 years to do. But it is worthwhile for the good of society, for the profitability of the company.

- Ken Shepard is president of the global organization design society. He says night vision glasses can change your perception of the world. With these glasses, you can see layers of management, he says. Shepard: Anybody interested in a set of glasses like this?
- When he got his degree from UCLA, Jax was in a field called organization development. He heard Elliot Jacks explain the importance of time in understanding human endeavor. That's when he started reflecting on his career and reinterpreting.
- The reason HR programs fail is the reason all programs fail. It's a failure to understand the level of complexity of the work. With these glasses, you can see the levels. If you structure it right, it doesn't change all the time.

- We call it stratum, or level one through seven. It is like a thermometer. It helps you do very fine work. If you can match the level of the job to the capability of the person, you can make fine paper or fine anything.
- VPHR: I would invite you to reflect on your career and actually map it. Read about talent appreciation, high potentials, and plot your own career. It's very revealing and it's a wonderful way to relate to your clients.
- Every thousand people, about 700 are currently at level one. IQ is not very good at measuring above 125. Talent is very okay. That's reflecting on the organization. What happens if you get into level six and seven? Very scarce.
- This is reflecting on industrial structure. It uses the levels starting with level three up to level seven. Consultants who used to consult for these level five, six and seven executives, those jobs have all moved offshore. You need people of seven and eight capability, and they're quite rare.
- HR has to know how to design and lift the function. The ROI in redesigning is amazing. You can run your HR with many fewer people, higher level people, more strategic people. And look at the kind of savings you get.
- Why don't MBAs and human resource people know how to design organizations? How many specialize in HR? 1% to 5% are even interested in HR. How do people learn to be really good?

- Currently I'm a management consultant but my first career was in the not for profit sector. I spent 20 years with the Canadian Red Cross Society doing all manner of jobs. It does show you some of the perils of working in the Not for Profit sector.
- When you talk to people about levels of work, it's just so natural and nonthreatening. What about when you move to levels of capability? Do you find the same openness? Sometimes we need to make the things at least attractive to people.
- The challenges have had more to do with role relationships and accountability discussions than they have explicitly with levels. Unless you actually make explicit that there is a theory underpinning these relationships, it's very hard to explain to people why the logic should be apparent.
- Alan Watts: A hierarchy only works if it is a common belief system and value system. He explains why there are levels of organization and explains how they work. Watts: What you're trying to do is make all energy flows easily.
- The idea of a quintave is not a surprising concept. If we think about GE and of course here there is a real debate between the European and the BIOS model. There's a difference in perception of what happens at senior levels. Culture is largely, primarily how we don't do things around here.
- Both models will be up on the website and anything you want to tell me about them or ask about it or improve critique, I would be really delighted. What I'm hoping, and this is my fantasy hope, is that I've actually found the core engine from which we can now elaborate any levels model.

- The employment hierarchy is the most effective way of bringing the work of large numbers of people with widely differing abilities to bear.

- The Tavistock Institute grew out of Havasoc Clinic of Medical Psychology. The clinic was formed after the First World War. After the war, government wanted to encourage the creation of a new institution. The Institute comes on stream in 1948.
- In 48 we now have the Telescop Institute and the founding members are people like Harold Bridger. It's just a powerhouse of clever people. All based on the notion that there is an underlying psychology to organisational life. Unless you consciously and deliberately organize around the anxiety then the system will find its own way of handling the anxiety.

- Every one of their principles is based on requisite organization principles. Our mission, our whole purpose is to develop talent to its fullest potential. For example, sustainability. There's goodness in sustainability, but it's really critical in this model. Transparency is somewhat similar.
- At the edge of technology, that's where there's change. What's new today or is going to become possible next year in our business. We also are more sustainable because we're working further out. We have less risk of commoditization of our value.
- Technology continues to move and make changes. As a consulting organization, professional services, that is our opportunity. When technology advances to make what was infeasible now feasible, our bright people are challenged to figure that out. Your edge is the place where you can create competitive advantage before others seek to do it.
- The entry level work of writing code is not thinking very far into the future. It's not until they get up to principal level one that that level three is actually working to their capability. We are always constantly challenged for them. At each level we expect that to be offered back to the level below.
- What people find as their source of self value defines whether they'll fit. We're focused on developing people first, less so about what happens with the client. Core value that we have is that you coach others. So you need to give back.
- People in the company. The first figure is formal training and development. The second is really good coaching and mentoring. The real growth in the people who are most effective came from being put in stress. And it was learning how to figure it out is what was really the most important contributor.

- Fred Stanford: After 28 years, I worked my way up from the bottom of the organization to the president of the operations up in Sudbury. In four and a half years, we're now up to 11.2 million. To distinguish ourselves and create value and competitive advantage, it was going to have to be on the social side.
- They were frustrated. They thought management was trying to kill this thing by athropathy and just give it over to contractors. What we did was set up a little contracting business. Then they could compete against contractors. And they delivered the 50% with relative ease.
- We have three tools to work with. You've got management systems, you got management behavior, and you've got symbols. No matter what we do needs to land on the left side of this values continuum. When you design eleven simultaneously, the work was extraordinarily difficult. But the result is elegantly, simple.
- A leader sets context and purpose for their team member. Critical issues are those things that will cause us to fail if we don't deal with it. We only differentiate between people if we can justify it in the work of the role. It takes years before leaders get up to running.
- torx has consistently defined the top end of what investors are willing to give junior gold companies in their share price for the asset. It's because using the principles, we do what we say we're going to do. The values continue to stay there.
- In life, on any given issue, people are either content how things are going, in denial that you're the problem, or confused about what to do. How do you get people to change their behavior? There has to be a come to Jesus moment.

- We've come into using what I'll call Stratified systems theory be not from a requisite organization's point of view of assessing capability. SAB Miller started about 1895 as a South African organization in Johannesburg. Became a conglomerate that opened hotel chains and casinos in almost all sorts of segments.
- Our assessment model consists of three parts. The three parts are cognition, judgment and decision making, our ability to manage complexity. It's the relative mix of these which helps you to know where to best place people with low validity of intelligence testing.
- Those of you that don't know that the validity of level of capability is. Zero point 95, we haven't found that. What we're measuring here is performance, correlation with performance. It's not the only thing that predicts performance.
- We look at trying in terms of talent pools to get the right mix of talent based on Stratified systems theory. Use it for succession planning and I'll show you in a minute the way we aggregate that up to the global level.
- In terms of roles, it's very interesting that I've conducted a number of studies across different countries. I found that the different roles don't always have the same level of capability requirements. The moment the whole economy grows, suddenly the role is elevated.
- Who thinks they own the people? Each country. We needed to have global talent pools, to have MD succession. We have global functional talent reviews and forums. You have to have a long term plan to find those and grow and develop.

- RBL is a consulting firm founded by Dave Ulrich and Norm Smallwood. We specialize in leadership development, strategic HR, and capability and organization. Michael and I are going to talk about how we've been using mentor to assess capability. In particular, we'll talk about in the context of a particular client.
- Mentor picks up on people's proclivity to build increasingly complex models. Some people don't like to make complex mental models. There are some psychological markers that will show whether they dig that or not. We use it as a basis now for development and going forward.
- Michael: Would that be I would assume that it's not the capability factor. Is it something else or it is capability? I don't know. It's a function of what? Potential plus kses, plus whether they value the work or not.
- Paul: Are these aggregate scales? There's five multiple tools, but it's based think about it as a framework based on the big five. Five domains of leadership that it measures are originality leadership, social presence, surgency. These progression curves seem to actually work.
- The assessment process can address different levels. The highest we would go up is the seven. One of the things for me is not to underestimate the importance of understanding capability in order to actually implement structure.
- Between 53 and 80% of people lie on their resume. How do you deal with that? We're not looking for the things people expect us to be looking for. The other way is what they're looking for is scope and scale and the type of work.

- When is it appropriate to have an outside practitioner? The foundation is each person possesses a maximum ability to deal with complexity. This defines the maximum level of work a person has the potential to perform. It's critically important that we do more work on helping managers understand levels of work.
- There are two things that we have to deal with a little bit of complexity. One is the process or the way by which the information is compared. The second one is the complexity of the information itself. This is what takes place between stratum four and five change.
- We don't fully understand what mode is. We think myself, Captain Katie thinks that higher mode, when they process information, the young, high potential. What we recommend people do is interview them with a problem solving type of questions.
- Ensure that your data is from different sources, that they converge when appropriate. Keep a library of innocent images of collecting data. Place each transcript where it belongs relative to other transcripts. What you see is more or less complex.

- Elliot Jacks came along and concluded that psychological analysis, human relations and psychotherapy were not the keys to organization effectiveness. He hypothesized that the organization was the key to Organization effectiveness. Jacks had a very, very high view of people. He believed that if you would put people in a supportive environment, all people would function well.
- 360 Tool has huge capacity when you integrate it, like Lucy mentioned. We're integrating the conversations to look at managers and look at leaders. What we're trying to do is achieve behavioral change. And we believe that having the aggregated information sometimes helps, but we have to facilitate those discussions.
- John Keen: 360 is predominantly an HR tool, and we can impose it in an organization. Keen: IPC and temperament are absolutely fundamental in terms of really understanding what goes on in organizations. Only 15% of CEOs get it, would do it, and would stick with it, Keen says.
- The four criteria for fit are skill, knowledge, and experience, CIP, temperament, and valuing the work. When we get into 360, about 25% of a management group overestimate themselves. This represents an enormous opportunity in terms of tightening up communication layers.
- Elliott: What we see on a temperament level is micromanagement perfectionism. Here we start looking at high potentials, and what 360 often tells us is these people are hard to manage. Management always seems to struggle between differentiating CIP and temperament.
- The idea of changing managerial behavior causes problems, says Sam. The issue is not changing managers behavior but specifying the required managerial performance. We have a moral obligation to provide managers all the support necessary for achieving the performance.

- Dario Patina founded a company originally intended to provide software services. He was able to separate his CEO work from his work as client services manager. The company has five different sectors, each with its own manager. This allows one a great deal of freedom, but at some moments one has to take decisions alone.
- In relation with organizations such as a stockholder, a director and also an employee, you have to choose the right moment to perform each role clearly. These challenges maybe are a harder challenge for getting that objective than just looking for the right.

- Ruth: I was asked to implement the Canadian version of tax which is extremely unpopular. What impressed me was the fact that these people had been administering an old pact that had been in place since 1924. Working in the public sector is a bit different in that sense. Ruth: It helped me both as a manager and as a leader.
- How did you do this in government? Must be fascinating. Most useful was working at the missing levels of work which exist. You only know that by trying. I've done most of the amazing jobs on the front line.
- Change strategies are always destabilizing for people and people always dislike the discipline. I would say that it is more threatening to power. This actually works. Not for everybody, but for some people it's more threatening and they will savage and it is a tough thing to do.
- Can we just add something on the managing expectations in the public sector. The good news or the bad news? The advisor for taxpayers. But I tell you that managing the expectations down turns out to be a very constructive strategy.

- Sean Jackson: It's probably a combination of necessity and good luck. He says 32% of all ranch employees rated morale as low. Management raised morale at as low as being 39%. Jackson says change can't come from within. Key ingredients are clear on value.
- Employees embrace the opportunity to meet with their manager's boss. Our core strategy is customer intimacy or so build deep relationships. What I still haven't done and what I've learned from today is actually being rigorous and fully looking at all of the work.
- There was one section of our business dealing with services to commercial operations that I did not declare it before. It had been growing 20% per year. You were bottom line, you had good people, so why upset the apple cart? It would have been a tough decision.
- In North America there's developed almost a cult around CEOs, that it's all about the CEO. That has to end. It's about the organization. We only have the privilege of leading the organization for a period of time. Our charge is to leave it in better shape than when we inherited it.

- The Canadian Passport Office is a special operating agency. It has 26 offices across the country and an annual budget of about $50 million. A study conducted by Capell Associates looked at the organization's structure. It found that many offices were very isolated in the sense that many employees were regional employees.
- The production process for passports was fragmented. Multiple people handled the same application. There was a lack of authority at required levels. Changes were implemented to improve the passport production process.

- I'm not a developmental stage expert, but I've gotten some very useful material out of looking at stage theories. At one point, I kept studying and values kept coming up. The second thing that came out of it was that development over time can also be represented as a progression of values.
- You cannot progress a new stage of development without at the same time developing skills that lets you execute those behaviors. If we're saying we're going to bring about a change, we need to recognize that there is an integral skill development piece.
- 30% of the data that we're measuring is really dealing with vertical, something to do with vertical capability. Most of the psychological things that we do are confounded with this thing called CIP. So it's kind of a fertile place for observation.

- I had the privilege and good fortune of working with Elliot since more or less since 1982. And one of the areas that I've. Been particularly trying to get his work. Down on paper so that we can. All understand the basic of how he views compensation. Any of you who have comments suggestions on this I would very much appreciate.
- All the remuneration that any individual receives for the work that they do in a managerial hierarchy. It varies from country to country but anything that goes to everyone exactly the same is usually not included in the calculation. Is a fair and a simple and a systematic way to compensate people for their work.
- In establishing requisite compensation, there are five steps. The ideal, best way to do this is by time spanning roles. Practice requisite consultants must have a skill of being able to time span. Historically, I find as much as a 50% difference all the way through the organization before you get the organization requisitely structured.

- Ladies and gentlemen, for the request to share what we're going to talk to today is for me a privilege. I use this conversation to help people understand or personalize transitions and conversations about capability over time. There's some personal stuff in here, but again, I think it's relevant in terms of the conversation.
- I was frustrated with where I was and the work I was doing, more so than the way I was handled within CRA. Was then put in charge of the Western Mining nickel operations and Western Mining's nickel operations. Would you be interested in coming back west and working with us in Westerns?
- Aims to become a group executive for global operations of Normandy Gold. Has a difference of view in terms of disclosure to the market and a whole range of other things. The period tested his values and the position you take in business.

- We had an important presentation by Don Folk this evening. I consider Don one of the original elders of our group, and we celebrate him. I hope you find his remarks provocative and stimulates discussion.
- There are more capable people available who are 70 years old and older. The second is that we've got smarter millennials and that companies and governments that grasp these trends will have the ability to shape the future as never before.
- The flyn effect describes how IQs have risen by 3% per decade over the 20th century. Now, I also see a different thing happening in the big cities. This is the creative class. These are opportunities that just aren't even being grasped. We need to embrace these demographic changes.
- Moore's Law will create capacity for us to use technology and the brains of these two emerging groups of people to get at the problems that the society has. My suggestion is this that we need to get the old timers on side before they get you.

- In 2008 we got our first contract outside of the industry because we had worked for the private equity companies and other owners and boards and top management. In 2013, a boutique consultants company gets two major contracts. How can you do a very limited number of people and with a very high speed?
- Swedish super police will be going to six levels instead of nine. How did they come to that? We brought together the 16 most skilled and high level people in Sweden. We created a picture of how the future will look like from this perspective. The most competitive organization goes faster.
- The task for the Swedish police chief of police. Phantom puts when you come to implementation and adjusting all the present systems. How many rules do you think there are in a police organization of 28,500 people? It's less than 300.
- Everything has to start with the clarity and farsightedness in the task. Everything else has to be brought out of that core. The financial community could benefit dramatically from this and very few have understood the beauty of what this is.
- The state of California could probably use a requisite police force given its history, for example. This is like a prime system to be able to have metrics from. Does that add a complexity to this? It's been fascinating to work with. When they start to push the button and implement.
- In the people intensive areas such as the prisons. What did you find in terms of the level two to level one ratios of staff. Actually, it was pretty well organized. The flip side on that is it's not surprising that the turnover is so high.

- The firm started in 19 in 77. Since about 1990 we've been doing exclusively organizational work. We've also done research. So far we've only published one study. Our intention is to publish more.
- We've got data on over 26,000 manager direct report relationships from over 50 organizations. We find that the requisite situation occurs about 50% of the time. An organization can significantly improve those scores through an organization design process.
- Organization design in general is related to outcome measures in terms of financial performance, customer satisfaction, and employee satisfaction. We found a relationship between that and four year pension fund financial performance. This has been a continuing process.
- There's a statistically significant relationship between what the information processing capability of an employee is and the complexity of work required in a position. This organization, by the way, was requisite. Whether or not you'd find that high a correlation in an organization that wasn't requisite, you probably would not.
- We've got two studies related to information processing capability. What we're trying to do as much as possible is find opportunities through the consultancy to do research. Because our main business is consulting, we really haven't put the effort into the publication yet.