Tag Archives: levels of work

Defining Levels of Work in a Bank

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From the Ask Tom mailbag –

Question:
You spoke to the Vistage group I attend. I recently transitioned to a new role as the CEO of a lending institution. We are, in essence, structured as a traditional savings and loan, but we only serve a specific target market.

I do not see a model in your book that directly breaks down the strata levels for “banking” organizations. I’m in the midst of a major re-structure, and your info has always been very helpful to me in these situations.

Response:
I am not an expert on banking, so if anyone has specific insights, pile on. The methodology below works for any industry.

  1. Set your strategy. Review your current strategy documents, including Vision, Mission and Business Model. Those are likely already defined for your organization.
  2. Define the functions necessary for your organization to operate. Your core function (that which drives revenue) will be surrounded by necessary support functions. My assumption is that your core function is closing loans to specific institutions in the target market you serve. Your ability to book performing loans drives your revenue.
    • Book performing loans in target market (core function)
    • Marketing, traditional and digital media marketing, including social media (support function)
    • Sales, in the guise of customer service at your branch locations (support function).
    • Operations, including all physical transaction activity like deposits, checking, loan payments (support function)
    • Back office operations, including electronic transaction activity, online banking, debit cards, credit cards (support function)
    • Facility operations, including building, building maintenance, leases and real estate (support function)
    • Security, including physical security, electronic security, and custodial oversight of cash and bank instruments (support function)
    • Regulatory (support function)
    • Legal (support function)
  3. Define the level of work in each function, which is likely the basis for your question. Looking at your core function, booking performing loans in your target market.
    • Loans will likely require leads from the marketing department, driven to a branch location or to a telephone loan department.
    • The lead probably lands on a desk at S-II level of work, someone to do the initial diagnostic workup and complete the necessary paperwork. Much of this work is systematized and gathered on template forms.
    • The loan package is then likely reviewed by a role at S-III level of work to make an initial determination and recommendation to a loan committee. If the loan is missing fundamental elements of collateral or “ability to pay,” this role will likely investigate to determine what is necessary to make the loan conform.
    • The loan will then move to a loan committee, comprised of S-III and S-IV roles. There will likely be specialists at S-III to vet the required elements of the loan. The S-IV roles will look at criteria to determine if the loan integrates into the bank’s portfolio. There may also be an S-IV role to ensure the loan will meet regulatory audit.
    • The institution will also likely field an S-V role, a business unit president, to make sure the enterprise is supported by all the functions necessary to drive the core function.

    Let’s look quickly at one of the supporting functions, physical operations.

    • Teller functions and customer service functions are now automated to the point where this role is mid S-I.
    • Each teller or customer service person has a supervisor or manager who ensures that services are delivered accurately and that cash and instruments foot (and cross-foot) at the end of each shift. The supervisor schedules the number of tellers and customer service personnel on shift depending on historical and forecast activity.
    • Each branch likely has a branch manager at low S-III to manage the overall physical operation. In a small branch, this role might by high S-II, and in a very large branch, this role might be high S-III or S-IV.

    Define the level of work for all the other support functions.

  4. Define the specific roles required in each level of work. The definition of level of work in the previous step goes hand in hand with this step.
  5. Establish the necessary managerial relationships in each function
  6. Establish the necessary cross-functional relationships between each function
  7. Assign and evaluate personnel filling each role.

These are the big steps. If you have questions, please let me know.

Don’t Play Amateur Psychologist

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From the Ask Tom mailbag – gleaned from a colleague’s mail list.

Question:
Do you have anything on Meta Competencies, if you have never heard of them, they’re personal indicators of future potential for higher up jobs. All part of our talent management project, which is based on “being good enough at your current job doesn’t mean you have potential to do a higher up job.”

Response:
This is a noble question which leads us astray for the answer. It is a sucker punch which assumes there is a psychological indicator for human potential. The question invites us (managers) to climb inside the head of a candidate or team member. But, once inside this head, most managers will find themselves on shaky ground. That psychology course in high school or college will abandon them. Few managers have degrees in psychology, advanced degrees or are certified to practice psychotherapy, yet here they are, inside the head of a candidate, looking for a “personal indicator of future potential.”

An alternate course, to answer this question, to identify “potential to do a higher up job” starts with how to define “a higher up job.” Talking about the job, talking about the work, now, most managers are on solid ground. Most managers can easily identify a “higher up job.” And that is where the answer is. Don’t try to climb inside the head of the candidate, focus on the work.

While we have an intuitive sense of a “higher up job,” until we can accurately define levels of work, identifying potential in a candidate will remain elusive, and indeed, allow psychologists to try to sell us all sorts of magical assessments. The instant we can accurately identify levels of work, we can get great clarity on human potential.

Focus on the work. Managers are experts on work. Let me borrow an insight from Lee Thayer. “The best measure of performance is performance.” Hint, this is NOT a circular reference.

The best measure of potential is evidence of potential (the original question). A person with potential will leave clues. All we have to do is see the clues. “Being good enough at your current job doesn’t mean you have potential to do a higher up job.” The answer is simple. Give the person a higher level of work. The best method to test a person’s potential is project work. Given a higher level of (project) work, the candidate will either effectively handle it, or not. The best measure of performance is performance.

Stop playing amateur psychologist and focus on the work. It’s all about the work.

Time Span of Tasks of a Supervisor vs. a Manager

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“Tell me, Joel, in making your transition from supervisor to manager, why do you think things slowed down for you?” I asked.

“The biggest difference,” he replied, “is that I am not dealing with things so much as I am dealing with people. When I was a supervisor, I just made sure material got received, stocked, staged and moved around, that machines worked, and that everybody was at their workstation. Sure, things shifted around and we changed the schedule all the time, but it was easy compared to this. As a manager, things have slowed down, but it’s a lot harder to get things done. It’s more complicated. I have to think further into the future.”

“How far into the future did you have to think as a supervisor?” I pondered.

Joel thought for a minute. He had never considered how far into the future he to think. “Well, as a supervisor, I guess it was only a few months out.  I mean, we had some long lead time items, and sometimes we had to reject materials that were out of specification, meaning the lead time doubled, but even with that, four to five months.  And with people, I just scheduled from the list of people of the team.  Now, I have to look out and see if we have enough people on the list.  I have to decide who is on the team.”

“Tell you what, Joel. The next time we meet, I want you to list out the longest tasks you had as a supervisor. I want to go over that list with you to see if we can make some sense moving forward as a manager.”

Quick-list on Levels of Work

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From the Ask Tom mailbag:

Question:
Tom, I just read the One Most Important Thing and it does cause some thinking and wondering how much many of us are doing this all wrong. I am the owner of a business but have been in some form of leadership or management for over 15 years and I don’t ever remember a real comprehensive approach to hiring or even with the detail you offer. I am reading your new book, Hiring Talent right now and hopefully can glean much of what needs to happen in our own company. I wanted to ask you about how long you see this taking to really create a different and better culture within an organization that perhaps never used any of these tools? It almost seems a little overwhelming to be honest with you. We are going from doing none of this to doing what we should be. I may be in touch with you often for some guidance.

Response:
How long does it take for a child to learn to walk. As long as it takes. And it is always a work-in-progress. I believe the most important element of this process is you. Hiring Talent is a mindset about work. It’s a different way of looking at work and the candidates you select from your talent pool.

Most managers never consider the level of work when thinking about a new role or filling an existing role. All the tasks and activities get lumped on a list with the tagline – “and anything else we can think of.”

Level of work is the key to understanding the capability required for success in the role. Here is my quick-list on levels of work.

  • S-I – Individual output, longest task – 1 day to 3 months
  • S-II – Coordinate team output, longest task – 3 months to 12 months
  • S-III – Create, monitor, improve system output, longest task – 12 months to 24 months
  • S-IV – Integrate multiple systems and subsystems for “whole” system throughput, longest task – 2 years to 5 years
  • S-V – Create, monitor, improve value chain between internal “whole” system and external market, longest task – 5 years to 10 years.

Any questions?

Hiring Talent, the Book, on Kindle Now Available

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It leaked out, cat’s out of the bag, no longer under the hat. Hiring Talent, the book, is now available for Kindle.

Hiring Talent, Decoding Levels of Work in the Behavioral Interview

HTLookInside

Based on my classroom course and based on my online program, Hiring Talent is now available for download in the Kindle store. If you would rather hold the print version in your hand, you will have to wait a couple more weeks as it goes to press.

This is the only book on hiring that blends the research on levels of work with the discipline of behavioral interviewing. The research on levels of work, pioneered by the late Elliott Jaques, is powerful science. The discipline of behavioral interviewing is the most effective method for its application. This is the only book that puts these two ideas together in a practical framework for managers faced with the hiring decision.

On March 4, 2013, orientation starts for our next group in the online program based on this method. If you want more information, or if you would like to pre-register, follow this link – Hiring Talent – 2013.

Individual Technical Contributors and Levels of Work

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From the Ask Tom mailbag:

Question:
Attended your workshop last week. I understand Levels of Work related to a manufacturing business model, but we are a financial services firm. How do we approach Levels of Work in our company. We simply don’t have Stratum I production workers. In fact, our producers have to help people make decisions that will impact their lives 10 years, 20 years down the road.

Response:
Financial services, attorneys, CPAs, architectural firms, engineering firms all share a similar approach to Levels of Work. Indeed, production work in professional services often rises to Stratum II, III, IV or higher. For a more specific discussion on Levels of Work in a CPA firm, you can visit this post.

But your question leads me to a more general discussion of Levels of Work from individual technical contributors. In the workshop you attended, we focused on Levels of Work in a manufacturing business model. That model illustrates the following managerial roles –

  • Stratum I – Production
  • Stratum II – Supervisor
  • Stratum III – Manager
  • Stratum IV – VP
  • Stratum V – Business Unit President

But, in professional service firms, there are individual technical contributors whose capability, Level of Work, may land in any of these Stratum, depending on the complexity of the problems to be solved and the decisions to be made. I find it interesting that you easily made the leap in your question, that you have individual technical contributors helping people make decisions that will impact their lives 10 years and 20 years down the road.

Time Span gives us critical insight into the capability required for these technical roles. Indeed, these technical roles may not manage other people, but, rather, manage the uncertainty of technical projects into the future.

So, yes, your production work in financial services, is most likely Stratum II, III, IV or above. And it likely depends on the age of your customer, your customer’s own Time Span capability, even the size of the estate.

Making simple decisions inside a young employees 401(k) plan is quite different than the complexity of the decisions to be made where trusts (revocable or irrevocable) and other large estate decisions must be made.