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Why we base our practice on RO theory

Our practice integrates a pool of skilled knowledge and experience from a team of professionals in several fields of organizational consulting. However, Requisite Organization theory, developed by Dr. Elliott Jaques in the second half of the 20th century, is the main foundation of our practice.

We have found that this theory is unmatched in its capacity to explain how organization actually work, and this provides the firmest bases available for attaining desired changes and improvements in organizations.

The development of Requisite Organization theory

The development of Requisite Organization theory began in the 1950's. The foundational stage, which extended for over 20 years, took place at the Glacier Metal Company, in the United Kingdom. Wilfred Brown, its CEO and himself a pioneer in the introduction scientific method in management, played a major role in this development by supporting research and introducing change based on RO theory.

Elliott Jaques was in his professional origins a psychoanalyst, and throughout his life he kept his allegiance to psychoanalysis as a theory an as a therapeutic practice. His initial stage in research and internal consulting at Glacier bear the mark of this provenance. In the course of research, however, significant discoveries came up that led him to a conclusion that would set the direction of his thinking on organizations from then on, and which would mark a turning point in the approach to human behavior in organizations: work organizations are real entities that function according to laws of their own, and which have a decisive influence on organizational effectiveness and in quality of life at work. The following phrase, so often repeated in the literature on this theory, carries this meaning clearly:

Systems drive behavior

when it comes to improving organizational effectiveness and solve human problems within organizations the right approach, according to RO theory, is not to act on the psychology of individuals in order to improve the organization, like traditional thinking on organizations dictates. The cause-effect relation is in fact reversed: the thing to do is to change systems in the requisite way (the way required by the nature of things), and the self-same individuals will change their behavior dramatically overnight.

The choice of the term "requisite" as a name for the theory reflects its central tenet: the organization of human work must be based on human nature. "Requisite Organization" is no other thing than the alignment of extant organizational structure and systems with human nature. When this alignment exists, the full application of human effort and capacity in a climate of mutual trust is strongly encouraged. Conversely, divergence between these two entities foster mutual suspicion and defensiveness, to the detriment of both effectiveness and quality of life at work.

Requisite Organization theory is an idiosyncratic body of knowledge, discontinuous with other theories on organizations. This situation very often leads to significant and very regrettable misinterpretation and misunderstanding. In our mind, a good way to gain access to the understanding of its core concepts is to focus on three basic (and not obvious) postulates of this theory:

  • It is based on objective knowledge, scientific discovery and objective measurement.
  • It postulates that people have inborn subjective senses on several variables inherent to the world of adult human work. These intuitive perceptions are deeply rooted, universal, accurate and reliable. They are a part of human condition.
  • Trust inducement as an effect of organizational systems is at the very core of the theory.

Objective Knowledge and Measurements

Back in the 1950's, while searching for a reliable method for assigning differential pay to roles with varying degrees of responsibility, Jaques discovered the Time-Span of Discretion. In one of his latest books (A Theory on the Life and Behavior of Living Organisms, see resources page) he called this "the greatest discovery in my life". This method makes it possible to measure the level-of-work of any given work role with objective rigor.

Succinctly, this discovery consists of the following. In Jaques's thinking, all work, even that which may appear at first sight as a fully prescribed routine, is constant exercise of decision. Discretion is the internal process of the individual at work that results in decision, an irrevocable modification of the external world.

At the time of initiating any kind of task, the working individual faces a degree of ambiguity on the results he or she will actually achieve once the task is finished. This ambiguity is only dispelled at the end of the task. The person doing the task necessarily anticipates the time it will take to accomplish it. This is the targeted time of completion for the task

In a work organization, people normally have more than one task in their hands, with different targeted times of completion. The Time-Span of Discretion method is based on the discovery that a strong correlation exists between the targeted time of completion of the longest task in the role and the level-of-work of the role.

In order to measure the level-of-work of a role, the operator who takes the measurement holds an interview with the manager of the role. By means of a structured sequence of questions, he or she determines the targeted time for the longest task the manager needs to assign to the person in the role. This is the measure of the level-of-work in the role, expressed in time units (days, weeks, months, years, decades).

According to Jaques, this is an equal-ratio-length measurement, whose rigor is on the same footing as measurements in the natural sciences. This measurement is unaffected by the content of work carried out, the amount of resources administered, the training required of the job incumbent and all other factors frequently used by job grading systems based on the rating of factors.

This is the fundamental objective datum in Requisite Organization theory. This theory includes at least two other objective records, both made possible by the discovery of the first. These are fair-felt-pay y el and type of mental processing, as determined by the Speech Analysis Method.

Subjective perceptions of variables inherent to the world of adult work

People who work in organizations have vivid intuitive perceptions of variables particular to the situation of working in common. The most outstanding are:

  • Level-of-work of the roles the person knows in the organization.
  • Individual potential, or current potential capability, of him/herself and of people with whom the person works, and of the match or mismatch of individual potential with the level-of-work of roles the person knows.
  • The level of effectiveness of the person and of other people in the close work environment.
  • The level of equitable compensation for the level-of-work performed.

These perceptions are givens. Requisite Organization is that in which the reality of work coincides with them. Under these conditions, the "motivation", or full commitment to work, mutual trust and satisfaction at work are reinforced.

The opposed situation is alienation: the working individual has a vivid perception of arbitrary management that does not respect his/her needs for achievement and equity. These conditions bring mutual suspicion and lead people to protect their own interests at the expense of those of other persons and of the organization.

Trust inducement

Jaques used to say that the proof of quality of human resources systems is their capacity to induce trust. This statement may be somewhat baffling at first; it gradually becomes understandable, however, to the person who progresses in the understanding of the theory. The following point offers a good illustration.

The natural stratification of human work

The discovery of the natural stratification of human work is a mainstay or Requisite Organization theory. Such is its significance that the name Stratified Systems theory was used in the past.

This discovery that dates from the 1950's was made possible by the previous discovery of the Time-Span of Discretion. In the process of research aimed at other purposes, role measurements taken with this method were taken together with the intuitive recognition of the "real manager".

The "real manager" concept is quite easy to understand for anyone who works or has worked in organizations. "Real manager" is the person whom the subordinate intuitively feels he or she must resort to when facing a problem too big to handle. The real manager decides in actual fact the work the subordinate is to do, and is the person who in reality evaluates him or her. Perhaps the clearest manifestation of this is that when an employee's performance remains consistently below the requirements of his or her job, there is always and necessarily another person who will have his or her own performance questioned if no action is taken. This is the essence of the definition of the real manager. An important corollary is that "real manager" is the person who, because of his/her broader comprehension of the subordinate's work, is in conditions to actually add value to his or her performance.

So, "real manager" is not the same as formal, or organic, manager. It often happens that organic charts show "managers" who are not real managers, but "straw bosses". The actual manager in fact by the manager two levels up: the manager-once-removed.

Real manager and formal manager may or may not coincide on the same role and person. If they do, the situation is requisite; otherwise it is anti-requisite.

The unexpected discovery was that when analyzing jointly data on level-of-work and real manager, a curious regularity emerges: in order for someone to be recognized as "real manager" by a subordinate his or her role, as measured by the Time-Span of Discretion, must cross a certain threshold value above that of the subordinate. These thresholds mysteriously appear at certain set values in all stratified organizations: 3 months, 1 year, 2 years, 5 years, etc.

Jaques declares that this kind of research war replicated over one hundred times in different types of organizations and countries, and that the regularity of the threshold values remained always constant. These results point to the discovery of a universal property of human work: the existence of discontinuous work strata. Jaques chose the term "strata" in order to stress the factual (not conventional) nature of these differential levels.

In order to appreciate the deep significance of this discovery, it is necessary to understand the human meaning of "real manager". This term designates the person in a role with whom it is possible to work in a manager-subordinate relationship without damaging each other in the need to fully apply each one's capability. Each of the two "depends" on the other to do discharge his or her accountabilities, and each has the full range of decision he or she requires. Under these conditions, mutual trust tends to naturally emerge.

This regularity was known to exist for a very long time, during which it was however impossible to explain this phenomenon. What was there in people that originated this de facto vertical division of human work? Almost thirty years later, by the mid-1980's the answer was found. Us humans use different mental processes to solve work problems, which differ from one another in a qualitative way. In order for a manager to add genuine value to the work of a subordinate, his or her role and current potential capability must be one stratum up from the subordinate.

This discovery sets clear prescriptions for organizational design:

  • For any given organization, there is one and only one requisite number of differentiated vertical levels.
  • All roles in a manager-subordinate relationship should be designed in such a way that the former is in the immediately higher stratum from the latter.

The discovery of mental processes

As mentioned above, every human individual can satisfactorily use one process of maximum complexity to solve his or her work problems. This process is the measure of his or her current potential capability.

Jaques developed for research purposes a method called Speech Analysis. To use it, the researcher places the subject whose process will be determined in the situation of developing an engrossed argument to support a point of view he or she is personally committed with. The subject's speech is recorded and then written down, and then the researcher analyzes this material. The result is the determination of the highest complexity process the person can satisfactorily use, which in time indicates the work stratum in which he or she can perform ably at present.

This method is of the highest value for research purposes, and also highly useful in the process of selecting external applicants to roles in the organization.

Fair-felt pay

This is yet another discovery made possible by the Time-Span of Discretion. Succinctly, it consists of the following: in the possession of data on the level-of-work of roles, the people in theses roles are asked, in a situation of confidentiality, what is the compensation that they would feel as fair and adequate for the work they are doing. The results are striking. The monetary values given in response bear no correlation to:

  • The kind of work done in the role.
  • The market value of the role.
  • The subject's current compensation.
  • But they do keep a significant correlation with level-of-work as measured by the Time-Span of Discretion.

These values show consistency within the same economic area. People who work in roles of equivalent level-of-work within the area give responses that show only small margins of variation.

Another valuable result is that the compensationdifferentials between strata remain constant for any economic area, be it rich or poor. Absolute values of course vary from one area to another; differentials, however, remain constant.

From an instrumental point of view, this discovery implies that it is possible for an organization to build a compensation system that is felt as fair by all those involved. See more information on this in EQUITABLE COMPENSATION SYSTEMS.

The systemic character

There is much to say on this theory and on the applications it supports. A significant part of the consulting services offered in this site is based on it, and numerous references are available in the RESOURCESpage.

One of the aspects that make this theory unique is its systemic character. Descriptions of organizational structure, human resources systems and managerial processes stem from the same theoretical foundation, and in actual practice all three function in a mutually integrated manner.

Elliott Jaques in Argentina

The influence of Dr. Jaques in organizational thinking and practice in Argentina has been significant, both though his ideas and his actual presence in this country. Argentina is quite possibly the country in the world in which RO theory is most widely represented in chairs at several universities. In 2000 Dr. Jaques was appointed Honoris Causa Professor at the School of Economics of the Universidad Nacional de Buenos Aires. Argentine publishing firms issued the Spanish version of Requisite Organization.

Also, many projects based on his theory have been undertaken in this country, both in business and in government organizations.

The presence of Dr. Jaques in Argentina is largely due to the action of Dr. Aldo Schlemenson, a prominent Argentinean professional in the organizational field, who took his doctoral degree in the United Kingdom under Dr. Jaques's supervision many years ago now. The presence of Dr. Jaques in Argentina made it possible to train other professionals, among which is Harald Solaas, in the theory and practice of RO.

Success Stories

When RO-based applications find a steady support from the top executives in organizations, notable results are typically attained in relatively short periods. One of such cases is described at length in one of Jaques's latest books, Social power & the CEO. There are also many printed and videotaped accounts of success stories. We will be pleased to advise on access to these materials.

A Final Wrap-up

This is our best shot at Requisite Organization theory in a nutshell:

  • It is a theory of action based on science. As Jaques used to say, an art based on science, like engineering and medicine.
  • It describes and gives proof on the determining influence of organizational systems on human behavior in organizations, and explains how to materialize mutual trust and high productivity.
  • It has the capacity of causing significant organizational improvement in short periods of time an in a relatively economical manner.

I would like to know more about how Requisite Organization theory operates in actual practice.
I want to know more about the Speech Analysis Method.
I want to see a description of Work Strata
I want more information on measurement of work roles by the Time-Span of Discretion method.
How can Requisite Organization theory improve profits in my company?
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