This is Elliott Jaques model of Requisite Organization. Different roles played by different people in distinct layers of the organization.
In fact, these roles are so different, that the organization intends to compensate them differently. And this creates what I will call Elliott’s Conundrum.
Painting the Scene
Elliott worked as a consultant with many companies over the world. His earliest notable assignment, 1948, was with Wilfred Brown at Glacier Metals Company in London, England. This research project was organized as part of the Tavistock Institute of Human Relations and the findings submitted to the Department of Social Relations at Harvard University in 1950.
Glacier Metals manufactured ball bearings. This was a working factory complete with union representation. There was considerable interest by all of the stakeholders: owners, management and workers related to issues of productivity and methods of compensation. It was here, that we stumble upon Elliott’s conundrum.
What is it about one person’s role that makes it different from another person’s role, significant enough for an employer to create a different pay rate?
The scene is Glacier Metal company, in London. Each morning, the production crew shows up for work, dressed in a pair of dungarees, having brushed off most of the dirt and grime from the day before. Each has a pair of safety glasses and a well-worn safety helmet. All day long, they are engaged in the work required to produce the steel ball bearings noted on the production run logs. And the members of this production crew get paid a specific wage for their contribution.
Off the floor, in an air-conditioned room, sits an engineer. It is quiet in his office. He is wearing a work suit, but his is clean and pressed. His safety glasses are from the “designer” series, seldom worn, in fact only when he ducks his head out to the floor to count the guys coming in for their shift and to count the production runs at the end of the day. Oh, sure, he knows each person’s name and a bit about their family. He knows which had car trouble the day before and who is coming to the company picnic. And sitting in his roll-around executive chair, this supervising engineer gets paid a certain amount of money. In fact, he gets paid more than the production workers, who do all the production out on the floor.
The question is why? Why does the supervising engineer get paid more than the production workers?
That was the question posed. That was Elliott’s conundrum.
Think about your own situation. Do you pay your supervisors more than you pay your production crew members? Do you pay your managers more than you pay your supervisors? Do you pay your Vice-Presidents more than you pay your managers?
Of course, you do.
There are some obvious guesses, but the answer to this conundrum, to be of value in building an organization, must be something consistent, something we can measure and something that would cross all industries, in every free market condition, whether manufacturing, distribution or service.
What do you think?
The Scientific Measuring Stick
The answer to Elliott’s conundrum became the central focus of his research from 1948 until his death in 2003. It is the cornerstone of the underlying principles outlined in what would become Requisite Organization.
The metric is called Time Span. Time Span is defined as the length of time that a person can work into the future, without direction, using their own discretionary judgment, to achieve a specific goal.
Time Span Illustrated
As a manager in my company, I look at the things I need to do and find that I am busy, so busy, that I make a decision to delegate an important project.
So, I call up, Bill. We sit down at the conference table and I describe my vision for this project. I explain the performance standards at each step, for each goal that must be achieved. I explain the guidelines including the budget and other limited resources.
Now, Bill is a smart guy, so he asks me 15-20 questions, which I answer as best I can.
At some point, Bill stands up saying, “I think I have it.” He walks toward the door. The instant Bill walks across the threshold, he begins to work into the future, without direction, because the delegation meeting is over. To complete the project, Bill must use his own discretionary judgment.