Transcript review

- Peter Edwards is the Vice President of Human Resources at Canadian Pacific. Bob McIntyre initially reported to him directly and subsequently mary Ellen. Peter is a key person in terms of the whole implementation process. Normally Bob would have presented this part of it. But Bob is on a one month vacation trip to Asia.
- The next part of that was holding people accountable for doing with that. The next part after that was delivering consequences. That's why I got Mary Ellen. She goes in and talks to people and says, who should do what? How should we organize? Who's accountable for what?
- We had teamwork, which is a phrase that drives me nuts. An effective team is a team that says, I play this position, I stand over here, the ball's over there. Too many people involved in decisions. By defining accountability, you improve velocity to decision making.
- Mary Ellen, give us an overview of the implementation process. The main dimensions were around aligning accountabilities and authorities and also around matching people to positions. Mary Ellen will be talking as part of a panel this afternoon on the talent pool part.
- Ron: One of the first things that we really focused on in the implementation is making sure that we got accountabilities really clear. It wasn't clear who was accountable for decisions, and it ended up taking a tremendous amount of time. This work immediately resonated with people.
- The Graham Group looked at matching the right level of people to cross functional projects. The company also changed how it looked at job evaluation. We use much more a requisite organization approach to job evaluation now.

- Anne Marie: I first met Adrian first. Sue Simonton is in Overcom Inc. And then that's where I met both Mike and you, Anne Marie. People with the kind of capability that these people have very quickly recognized some of the power and the opportunity that were in these principles.
- Anne Marie: We need to get something that's very structured. Adrienne, who actually worked for me in the mine at one point in time, will describe some of the four key implementation essentials.
- L Three hit a bit of a roadblock at L Three. The next step was the requirement for a pretty comprehensive project implementation plan. We touched many stakeholders. We had to have the strategic patience to take it from the structure it was to the equipment operator.
- Ten years into a cultural change around safety, something we call our journey to zero. Recordable injury frequency for mining operations was zero point 46 last year. Fewer people said they were unclear about their role accountabilities in the mine. Still not perfect, but it's a signal and a metric in the right direction.
- Having the alignment of all the functions required to support the business would be advantageous. The infrastructure, It. Adrian talked about really teaching and building that competency of the line to understand Ro principles. This has paid off in spades.
- There has to be a foundation somewhere in your company. In a large organization like we are, we need internal professional capability. We have talked about some basic CBTS for new employees joining our organization. Getting it really foundational into the organization has been some of the successes.

- 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.
- 360 is predominantly, I hate to say it because I am one an HR tool. One of the worst possible outcomes is when a manager is accused of being rough in a context of a business turnaround. The great benefit here is putting the auto context. On it and using it a more. Systemic way in the aggregate.
- IPC and temperament are absolutely fundamental in terms of really understanding what goes on in organizations. To ignore some of that does us a disservice. To pretend that there aren't some bad people out there is to ignore 20th century history.
- And the sensitivity to others, which John talked about earlier, to me, this is plus team. Any one of those drivers, in my experience, are hugely predictive. And if we don't pay attention to that whole continuum, my experience is we do ourselves a disservice.
- The idea of changing managerial behavior causes problems, says Sam. The issue, if you will, is not changing managers behavior but specifying the required managerial performance. Organization effectiveness requires that we recognize that managers are human beings.

- Board wanted to know how geo could meet the needs of CEOs going forward. Geo networking models and tools, sustainability, Ro evidence and dealing with the Ro paradigm. Ken will be preparing a feedback sheet for all of you.
- In October in Santiago, Chile, the Chilean HR Association and the World Federation of People Management Associations is having a world Congress. 90 national HR associations and 600,000 HR professionals who want to hear what you have to say. So I think you need to be at the next congress.
- IBM sponsored a group of information technology It people joining HR people. Group recognizes that Ro is much more than organization. IBM committed to include some Ro education in several initiatives. There's great opportunities for us to collaborate in preparing for the future.
- Ro community and the Global Organization Design society seemed to blossom to me in this particular conference. The conference was an extremely rich professional program and we were exposed to excellent work and open sharing. We need your help to make the next twelve years as good as the last twelve years.
- Thank you, Don. Part of what I had some tears talking about Ken Crattock was gratitude to Elliot for his endless sharing. From that original memorial service for Elliot, we looked at each other and said, this is too good to die. The help you asked for help, help was outpouring.
- The other thing I want. And I hope Kate always goes out of the room. Can you get this on video, please? And we'll make a special copy for Kate. There may be other people I should thank individually. I have many friends here. Very thankful.

- Full purpose organizations work beyond shareholder value. The main purpose is not to make the dollar, but actually to contribute to our limits of work. Sustainability is not consuming in the way that we consume. We need to think about how we shift behaviors.
- Ronald: We're actually a commercial company. But we have a definite philosophy of trying to give back. The way we do the model is when we go into a corporate client, we follow the same process. There's a direct link between the corporates and the beneficiaries who are not for profits and our services.
- There is an eco village that's recognized by the United Nations as a sustainable teaching center for the world. They have very requisite structures without ever having heard of our stuff. For the first three operational levels where they have to be efficient, they are requisite.
- Sir John Monash Foundation is the equivalent of Fulbright and the Rhodes Scholarship. They get about 300 applications a year for 15 bursaries worth $50,000 per annum. Now have a national panel that's going to evaluate these 300 applications according to that principle.
- Barina: The first company I want to talk to you about is a microfinancing company. They provide microfunding across a number of countries and they look at supporting women to start entrepreneurial ventures. Barina: Everybody benefits, good Return benefits from the insights of strategy and structure and people and capability. It really is a win win situation.
- If a company has a non requisite structure, there's no accountability in the company. Would you call Google requisite? Google? I don't know enough about Google to comment. To me, being requisite means being resilient and lasting the distance.

- Tommy Mulvick is going to talk to us this after afternoon. Tommy just got this assignment to show up at this conference on Friday. My English is not very good. It's two years that I don't make any presentation in English. But my Spanish is very much better than my English.
- Cross functional coordination of the whole value chain toward differentiation in the client was one of the challenges. Will leading a culture change focus on the customer? The transition process is complex to measure in terms of time, resources.
- Tony, Tommy, how are you getting them out of denial into confusion so you can work with them? I think we helped the whole organization going from denial to confusion by trying to help them understand what was the shift. We are now hiring a couple of professionals that are very tailor made for this transformation.
- Torx CEO: Compensation is pretty much market determined. All the other perks and benefits are overruled by the culture. It's an exciting world to work in. We have had no trouble recruiting at all.
- How are you ensuring that you don't start losing focus and maybe start trying to deliver too much? Because I assume that the needs of each of your customers might be different. And then my second question is actually around strategy, but it relates also to ORC design.
- When you listen to the upset and the anger, it really came down to the fact that they were different. Almost all human conflict is based on one of those. We'll have to take these people and catch them in the corner and ask them directly.

- So our speaker number one is Cecilia Cortina with AMG Consulting Group out of Argentina. And I'm going to turn the floor over to her.
- Cecilia from Argentina, and I work at AMG Consulting. Am G is a firm that has 25 years working in Latin American countries. One of our practices is what I'm going to talk about today. We intervene and help companies go through the growing and changing processes.
- Complexity of business environment is increasing, and shortage of talent is one of the main concerns to address this increasing complexity. Ro is a privileged framework to address these concerns because it helps connect the business challenges or the business issues with the organizational design.
- So in the talent assessment, what we do first is we train managers in the framework. Then it comes the assessment and we do apply two methodologies that we call it internal and external. What we get as an output here is talent succession, retention and development plans and unified leadership practices.
- When it's better to use internal assessment, when demand almost anytime. But when the demand is regarding talent development, it is essential that managers are involved from the first phases. Both methods are valid. It's key to connect results to the business needs.

- As Mike's been talking, there's obviously a lot of similarities about what they're doing. But our situation is quite different. I do have a table full of hecklers, executive level hecklers over here. So I'm probably in a worse situation.
- Level four projects actually require level four management and you require a level four organization. If successfully delivered, complexity also creates a huge amount of competitive advantage. There are some clear lessons that we now take into consideration on any of our future project pursuits.
- Our annual volumes have jumped from billion dollar mark to 2.3 billion, 2.2 billion probably this year. Our organizational structure continues to evolve, including recent changes. And we're preparing over the next five years to double in size again to 5 billion a year.
- Charlie Corey had a question about the Matrix Organization. By that he means projectized across functions. Can you describe that in terms of requisite organization theory? Catch me later.
- Eva Wallet: We're an employee owned company and it's very simple structure. Our employees buy in at book value, which is probably half to a third of what it would be outside of on perhaps a public structure. Is there an obligation for employees to no obligation?
- It's about building and managing level four relationships to get level four projects. We made sure that we aligned all of our organizations crosswise between the various stakeholders. When we're developing the next level seven organization, we're also talking about introducing a client stream.

- The measurement of a human intention is the most trust inducing, freeing experience for the individual. Only way you can create trust in the managerial system is to measure the time span of the intention. This is the only body of individuals whom I feel like I can truly trust to hear what I'm trying to say.

- Issue because I wanted to talk that a bit in with encouraging about reflective practitioners. I would like to share with you a little bit about why I started in this field. The institute was founded and known primarily for the social analytics methodology. The thing I like about that methodology is that it is founded on uncertainty.
- Elliot's style in argument was always highly rigorous and along the lines of being very clear, precise definition. Your experience of being with him and arguing with him is extremely emotional. What we're really talking about here is the conditions under which if we're going to have successful relationships.
- In parts of organizations, people say the language is used inflexibly. If I happen to use a slightly different word or phrase in one organization to the other, that doesn't bother me too much. It depends what people hear in that organization and what is helpful.
- Language can be used as power. Never use the phrase working with the executive, if I were you. What you should do is to work alongside the CEO of the executive team and help them think through work. Some of the features that are in the book work with some of the models that help us understand how the work is perceived.
- Systems of differentiation and systems of equalization in an organization. All systems of differentiation should be linked back to the work to be done. If they're not, they will be perceived negative beyond value. We need to be clear about some disciplined thinking in this culture.
- consultants tend to fall into three groups. Mercenary. Mechanic is somebody who just likes to work and delight in the technical content. Pleasure is telling you how complex. Process isn't important as the relationship between the process and content is important.

- There really is no tension between productivity and overhead. In the army we treat overhead as an entitlement. And requisite organization theory is a great way to create pain and suffering in a Bloated organization.
- Lean Six Sigma was the forcing function for business transformation. We rolled Ro out more judiciously, more surgically. This is the biggest deployment of Lean Six Sigma in the history of the world. It is somewhat resource intense at the beginning, and then it pays for itself.
- Why are people in dysfunctional organizations? They don't know what they're doing. Structure evolves, structure solidifies around vague authorities. We clarified the management philosophy of the army in General Order. This attempts to codify some of the things we learned in the first engagement.
- The lack of business situational awareness in the army is also a cause for dysfunctional structure. Who owns the business structure of the army? The civilians do. We're taking some steps now to centrally manage all the senior professional development structure.
- Strategy drives your structure. Your systems have to be updated to reflect your new strategy. Your processes must be leaned in terms of continuous process improvement. Together they really match and work very carefully together. If you do all that, you might actually become world class.

- 50% of the time we know we'd have these boss subordinate relationships, not optimal. The biggest impact on people's productivity and sense of staying with an organization is what the boss so we know these things. HR folks ought to be totally targeted at these boot effects.
- One third of the time we see work assignments being unclear. The mismatch factor is about 35%. And to me, this is where the game starts for HR. I don't think HR people are taking advantage of those powerful economics enough to get people's attention.
- HR should be focused on this 30% to 40% productivity improvement. Delegation is also to more than 50% wrong in companies, according to our data. We have to improve our capacity and ability to implement and capture it.
- If HR person doesn't understand the business first thing, there's no right to be there in a leadership role. stewardship is actually the Judeo Christian fundamental value. And that applies to all functions too.
- You can be an international business and entirely run your HR from level four. What about a transnational business where actually you have centers of excellence around the world? These are entirely different businesses which require a sophisticated level of involvement to design the HR systems. If you don't get your corporate center thoughts right, everybody gets screwed.

- Ken Starr wants to change the dominant paradigm of organizations over the next 15 years. For him, it starts with the engineering. How do you get people to do things? And won't that end up in an innovative culture?
- The major thing I find missing in the application of requisite organization is managerial accountability, managerial authority. What gets heard, if anything, is re engineer your processes and maybe train your people of what Elliott said. This is something to do with how we have to move things forward.

- Our military does a very poor job of finding future potential. What we do is we constantly prepare for the next war. Most officers are probably at least mode four. Some go out and some go up quickly. How do we how do you recognize talent?
- I think people are overestimating the number of people who are capable of operating at a very high level in society. Our education system is educating for a level. What's new is putting it all together in a total system.
- One of the things to keep in mind about progression in the military from one level to another. You have to survive at the tactical and operational level to be a strategic leader. High potential people at any level are difficult to manage because they work to their capability.

- Sam sam SA sam sam.

- I began working with Elliot in 1990 with a big project with Pablo. We began to put together a consultancy tool. It allowed us to do large scale gearing sessions that weren't possible otherwise. Now the software is going into beta with two clients in about four or five weeks.
- Software has to, I think, eventually support all of Requisite organization. It's got to satisfy the needs for talent assessment, talent development, sesh, context. It needs to support people in their need for transparency to know how they've been assessed.
- The tool can be used for reorganization, designing new organizations and seeing do we have the capability in our current organization to populate that new organization. The tool can also be used to help with succession planning.

- I come here from two directions. One has to do with organizational development in healthcare. The other is from the field of system dynamics. And what I realized when I talked to my colleagues is that the problems are exactly the same everywhere.
- One title is one I've been playing around with for quite a long time. I call the mess in health care. It's something that is going on in the hospital. What goes on in a hospital is absolutely the maximum on variation. People tend to get ill in a very different way.
- Swedish National Conference on Patient Health Quality issues. There's discussion using statistics from the US where there's about 100,000 deaths a year due to errors in the system. The move that I perceive could be from individual accountability to system accountability.

- To take place over the next two days will be challenging full of controversy, questioning and critical thinking tendency. We have to it. He's he's refined better on how for this was truly facilitating the maximizing of potential through liberating structures.

- For 30 years I was a professor at Ohio State University. I ended up at several army depots and wrote a case on the Lean processes at Letterkenny Army Depot. This Lean area that we're talking about now, the Lean initiative is enterprise wide. What I'm going to talk about is alignment.
- Panelists talk about how you align processes with organization structure. Think about vertical alignment and horizontal alignment. You're aligning your work around your value proposition, vertically levels. The books, the cases and the slides that you'll see today will be online.
- There is a difference between lean on the left and six sigma on the right. How the two ever became intertwined, I don't know. Managing with good metrics is essential. Organizational leadership must establish expectations and change.
- Letter Kenny was to turn that operation around over a cliff, towards a vision and mission. The one thing is really quite simple and it didn't come out in city slickers. Keep focused on the one thing, and in our case, it's operational excellence.

- Six Sigma is one of the children of Dr. Deming's quality approach. In this case, Deming is talking about open systems. It's open at both ends, the supplier and the customer. How do you size your units? Depends on the nature of what you're producing.
- The macroeconomic impact of how quality builds itself and eventually takes the market from the opponent. We have not yet developed the seven tools in terms of quality. The biggest bang for the buck is that there are seven tools.

- I have a background in the pharmaceutical industry. I developed Sweden's largest training house. We have been able to do time span and talent pool in more than 150 top management companies. They range from venture capital owned small businesses up to big global, multinational, multibillion dollar companies.
- A Swedish trading house with 7 billion Swedish in sales. They were going to recruit three only trainees. All management are involved in this process except for the CEO. And obviously they haven't thought through what the time span is of the role. So they recruited only one and they are very, very happy.
- In 4 hours we have the owners, the board, top management and two experts develop a business plan. You can see this when you merge units within big companies also it's the same thing. As a consultant you would like to have a success fee instead of consultancy fee, wouldn't you?
- This is a transport company with a 6 billion Swedish, so it's about a billion US company. You can imagine the effect of such a poor organizational structure. 75 of those are on level three and they hate their job. So then we talk about selling based on savings.
- On top of the 150 companies we have done the analysis of the management teams. And on top of that, we are also acting like moderator in the most extensive executive network among the big companies in Sweden. So we try to at least get a picture of what's going on in the Swedish market.

- At ICAF, our objective is development. By using instruments that give us different measures of the same construct, we get several different looks at what the construct is supposed to be. Look at the correlations between the MCPA and other indicators of information processing style.
- I don't think the MCPA measures capability. It probably measures a proclivity. In our general officer sample, what we found is that they were prolific readers. They're making sense out of complex situations. But the administrator is the instrument and not the instrument itself.
- It's possible for someone to be too high on a measure. Development takes a lot of time, so if you find someone with high potential, it's possible to move them up too fast. A competent administrator must have sufficient grounding in theory and sufficient experience.

- Lean provides a set of tools for improving a process. Six Sigma provides a tool for improving your process. The tools of Lean are totally different from the tools of Six Sigma. Sometimes Lean is a useful tool, and sometimes Six Sigma is a Useful tool.
- Lean should give you 7% gains in productive effectiveness every year. If you take out the voice of the customer first, you're piloting your ship around towards failure. You can build redundancy in, but remove the fat.
- Efforts to be economical lead to reductions in capacity. The key question relates somewhat differently in the military. Where are you drawing your profits from? Are you drawing it from things or from people? Which comes first?
- Your organizational structure has to be around work. It's what is that process line at level one? What is that work? If you understand that, then you can design a structure that makes sure you've got the right roles for the process that's being implemented.

- The army is on an optimization curve. It reinvents itself about twice a generation. We've decided to go to a mid 20th century business structure. It's a three to seven year journey. We will have kicked it off and the next administration.
- There's something interesting about the warfighting army structure on the left. The right hand side is the non war fighting army. How do you get it efficient and effective to support that side? You've got to have someone come in and force it.
- Excessive overhead, people working at the wrong levels, et cetera. Customers said there was a whole layer that didn't add value. We decided to do shared staff and shared services. And we saved a number of spaces by consolidating.
- We took about 140 to 150,000,000 out a year in operating costs from just that just the overhead. Now we're down at the operating level and we'll make another pass through looking for some more additional resources.

- BIOS obtained similar results to those described by Dr. J. Jacob. When we look at, we say that the capability is necessary, but of itself not sufficient. It is absolutely important that you give people the tools to make sense of how they see the world.
- Second point, if I may. The issue is making meaning. And we do so by reflective thinking and by structured feedback on the reflective thinking process. But those are techniques that require some kind of outside coaching and feedback.
- Elliot's belief was that you are born not into a level, but into a growth, a maturation curve. But he cautions against wanting to move quicker and faster and up the curves. If you don't ground that capability in knowledge and skills, you're setting yourself up for failure.
- A detailed, fascinated person is negative affected in his or her capability. How do you differentiate correlation from Sensation without looking at content of information? When will a battery of assessment tools be commercially available?
- The Australians and Brits seem to see Stratum five as a higher conceptual level than North Americans. We're working in 27 different countries and we are seeing the perception of complexity and capability looking different in different cultures. How can we reconcile this?
- Do you tell participants what level and mode they score on the MCPA? If so, how and why is this useful? What I try to do is sense from the individual whether that person is comfortable with where he or she is in his or her position at the time. Then what I do is I speak to the individual's growth potential.