System: Quadrant 4

‘Q4 System’ is about what is collective and what is tangible; it includes:

Declared purpose or intent
Organisational strategy and planning
Structure and roles
Systems-of-work
Risk and governance processes

90% of organisational effort, time and money seem to be directed at this fourth Organisational Perspective. This is not to say that effort here and a robust approach is not required, but it is also not sufficient. All too often, organising stops here, and the hope is that people will be able to figure out the rest by themselves.

That rarely happens.

It is all too common that too little time is spent reflecting on longer-term and more complex issues such as the real purpose of the organisation and what benefit it is providing to the larger systems within which it is embedded (such as economy, society, and environment). A narrow understanding of ‘maximising total shareholder return’ or ‘top quartile profitability’ has produced unsustainable entities that create more problems than they solve.

Ways of working such as Agile, Lean and others have sought to codify effective and generative means of production, but the usual way of implementing these approaches has been to forget the philosophical and ethical assumptions they have been founded on, and to treat them as mechanical ‘tool kits’ or techno-bureaucratic gospels. These improvement attempts regularly fail to deliver the promised benefits and leave people feeling cynical about ‘yet another management fad’.

We partner with specialist practitioners to deliver effective consulting services about strategy, structures, and systems. These advice-giving services are tailored to your purpose and implementation of any changes to your ways of working consider all four quadrants of your business activity.

Operating without effective and coherent Q4 System (tangible collective) elements is like operating without a skeleton; you will not be able to support the weight of yourself. However, if your Q4 bones and sinews are not well-connected to the soft tissue of your intangible and informal organisation, you will not be able to survive, let alone thrive.

Themes of Work-Complexity

As individuals and teams develop greater complexity of thinking and functioning, the leadership processes, organisational systems and organisation structure needs to evolve to support this different functioning; the evolution of the intangible and the tangible aspects of the individual and the organisation is interdependent.

Goal setting, planning, performance management, recruitment, ... if these systems are designed to too low of a level of complexity, they will hamper transformational efforts

“Best practice” solutions, processes, and systems will be insufficient for your needs – you will have to review and redesign specifically for your evolving circumstances; this requires systems thinking and pattern analysis.

Requisite structuring consistently describes the various levels of work across the organisation and their relationships with each other.

Requisite structuring assists with effective Design of work

organisational systems need to co-evolve with individual and team development

The practical problem of most transformations is the collision point between bottom-up agility-focused work organisation and practices and legacy, conventional organisational hierarchical structures, and their attendant control-focused leadership systems. The pinch point is the middle of the management hierarchy, GMs and Exec Managers.

These are the levels in organisational hierarchies that are most caught in the double bind of financial and strategic (control-oriented) directives from above and the desired organisational practices that will produce agility coming up from below.

As a result, these are the layers of the organisation that require the most support in transforming business systems and culture…

AND they usually act as the biggest impediments to that transformation as they struggle with the need to develop more complex ego functioning in the face of the perceived loss of status and power.

As a result, organisational power struggles and unhelpful politics are usually the norm. This group has the most to lose and the least to gain.

Descriptions of Work-Complexity

Increasing complexity of the 'problem to be solved'

Any organisational opportunity or problem exists at multiple levels of complexity simultaneously. Being able to separate out these different types of problems is useful when you want to organise how work gets done. Different people have different outcomes, foci, and different skills and capability to apply to the work, to the decisions to be made.

We borrow heavily from the work of our colleagues, The Working Journey (see https://theworkingjourney.com/) and their adaptations and development of the work of Elliott Jaques and colleagues in the Requisite Enterprise movement.

Quality (Level 1): now – 3 months

Purpose

Working within a prescribed system for defined/ explicit outputs. Responsible for achieving agreed quality outcomes at required cost. Responding to immediate/ presenting customer needs
Examples: call-centre team member, mining or manufacturing operators and maintainers, front-line supervisor, customer service in retail or hospitality, tradesperson (e.g. electrician), labourer.

Unique Value Add

Skilled production, Direct physical outputs, Quality, cost reduction, shop-front/ client facing customer experience, image and reputation (brand).

Decision-making

Deciding how to use the provided resources to produce the required output (within system constraints, SOPs, laws and regulations, etc). Decisions regarding when the work is finished to the required quality, standard. Front-line supervisors organise work and tasks of others but do not obtain, schedule, dismiss resources or people.

Creativity and vulnerabilities

Tangible process improvement in use of resources and delivery. This work is the foundation for any organisational viability; it must work well, over and over – strategic discussions are pointless if you cannot provide what the customer wants or the product is poor quality. There is often significant skill, knowledge and judgement required to successfully apply processes in sometimes quite significantly complicated systems to get a quality outcome.

Service (Level 2): 3 months – 1 year

Purpose

Ensuring work flow (focus on Quality theme). Providing specialist advice to customers. Ensuring availability of appropriate resources and well-trained and supported people, providing safe workplace and equipment. Analysing data generated by the operations of the work systems and adjusting to meet objectives of an annual cycle; forecasting demand, preparing budgets; diagnosis and interpretation. Alerting their managers to repeated patterns of system failure that may indicate system review and redesign is needed; new products required, etc. Examples: department superintendent; retail or restaurant manager; front-line manager; customer-facing specialists (e.g. professionals: doctors, lawyers, accountants).
Specialists (professionals) focus on specific complex issues using codified knowledge/ skills (e.g. case law, accounting standards, surgical or diagnostic skills) requiring specific and often regulated education/ training. Examples: corporate-internal functional specialists (e.g. Tax Specialist, HR Business Partner).

Unique value add

Output team leadership. Service and cost control; efficiency. Problem-solving within an existing process and assuring compliance with the process; managing the process; Dealing with difficult technical problems/ system-exceptions as they arise so that business reputation and customer experience are enhanced. Managing a team of people to produce to a standard system/ process. Analysis using established tools/ techniques to predict annual cycles and required preparation, resources.

Decision-making

Diagnosis based on accumulated knowledge and practice; analysis of current data to predict and organise for a near-term, future state. For managers, selection of the team members they will be working with; developing of the required knowledge and skill of their people. Evaluating options, looking for possible obstacles; a solution exists and will be found with sufficient understanding of data, applied within a well-known framework and within the constraints of the work-system. Optimising work-system performance for efficiency.

Creativity and vulnerabilities

Solving system-exceptions within constraints of work-system and law/ regulations while enhancing reputation and optimising efficiency. Flexibility in interpretation of work-system constraints is required, dealing with unexpected events (e.g. disruptions, shortages, absences, errors) means a first introduction of structural uncertainty. Work output can be assessed situationally, it will not be standard or predictable like Quality outputs.
For managers, balancing the needs of the work system with the needs of the people in it; this is the first level of hierarchical separation of work-complexity (front-line manager and front-line) and this can create social conflict.

Practice (Level 3): 1 – 2 years

Purpose

Design and review of work-systems to provide effective organising of people, process and plant to produce a defined outcome. Providing known products/ services to known customers, and variations on those. The ‘means’ of production, of the business is created and managed including people, systems, budgets, customers, time, deliverables, products, channels, distribution.
This is also the establishment of internal functions, specialised lines of internal advice or operational departments/ lines of production; requiring the creation of parallel or linearly linked work-systems.

Unique Value Add

Directing production. Creating/ designing production/ work-systems. Review of existing systems for effectiveness and (re design for ‘best-practice’ and cost efficiencies; assuring and improving process. Production unit or project management.

Decision-making

Connecting or serial processing, current versus planned and alternative paths considered and then created for future state. Assessing current versus planned for systemic adjustments; generating alternative scenarios and choosing best fit/ most likely favourable to meet future needs while maintaining flow. Judging alignment and coherence of variables on-hand as opposed to more abstract or distant. Reallocating work (from one team to another) redesigning workflow and volumes; relocating work and teams; eliminating unnecessary steps, re-ordering.

Creativity and vulnerabilities

Identifying patterns in performance of work-systems and re-design to optimise effectiveness without compromising efficiency. Improving and fine-tuning existing systems; questioning the efficacy of the process to its purpose. Managing change. Developing alternative products and services and different ways of meeting the requirements and needs of known client; balancing ends and means.

Strategic development (Level 4): 2 – 5 years

Purpose

Integrating parallel work-systems to provide a sustainable business model for longer-term strategy-defined outcomes. Context is changing social, economic, political and ecological environments. Creating a sustainable business model that translates purpose into structure, systems, culture and relationships. Examples: General Manager (operational site or business division); corporate core/ functional head (e.g. finance, HR), COO, Program Manager of a transformation of the business.

Unique Value Add

Building the strategic future while ensuring continuation of operations. Balancing use of uncertainty and ambiguity (to create space for future state) with need for current-business operational continuity. Translating the purpose/ mission/ intent into a business model and strategic plan. Integrating business work systems into a coherent whole (i.e. the business model).

Decision-making

Trade-offs between competing demands of known products/ customers and an uncertain/ unknowable future. Balancing the allocation of resources between optimising the status quo of known customers/ products with creating the future business. Coordinating/ integrating suites of linear/ functional work-systems – creating the business model. Abstract/ conceptual modeling allowing for uncertainty/ incompleteness – logical leaps and abductive reasoning.

Creativity and vulnerabilities

Getting the balance between optimising current performance and creating future potential. Initiating projects to investigate viability of possible future business models and evaluating their outcomes for dial-up or shut down. Creating the means of delivering new business models, new value-generating products and services, for new markets. Moving too fast/ moving too slow; gambling too much or not enough.

Purpose

Create the strategic direction for the business; articulate its purpose, the need it is meeting and the value it is creating. Articulate and communicate the purpose of the organisation, the value that it is creating for its environment. Set policies and establish frameworks to support the generative evolution of business models (Liv/ strategic-development) and work-systems (Liii/ Practice) that support the stated purpose. Examples: CEO; regional business head/ Exec GM/ VP; Government Minister; university chancellor.

Unique Value Add

Forming the purpose and fashioning the boundary conditions and relationships with the environment and surrounding systems. Leading the organisation as a social-system; fully integrating organisational perspectives, especially of culture (Q3) and structure/ systems (Q4); ensure actions are congruent with values. Deciding on new products, markets, ventures and alliances; negotiating boundary exchanges and terms of trade. Influencing environmental factors (e.g. government policy, trade negotiations, regulations).

Decision-making

Create frameworks that can support/ contain multiple business models. Valuing multiple functional areas equally to balance and integrate their contributions to a coherent whole/ entity. Balancing competing demands for resources, time and attention; filtering noise from important information. Weaving wisdom to see the inter-relationships between bodies of knowledge/ expertise, business information on products and clients with industry trends.

Creativity and vulnerabilities

Balancing outward and inward focus. Using uncertainty and ambiguity in the process of problem solving; probe – sense – respond (Cynefin); creating safe-fail experiments. Holding multiple mental models to create new patterns in customer demands, technology applications, regulatory requirements and market opportunities. Creating a motivating and compelling story/ myth of the organisation as accomplishing something great and bigger than the individual - legacy.

Strategic intent (Lv): 5 – 10 years

Purpose

Create the strategic direction for the business; articulate its purpose, the need it is meeting and the value it is creating. Articulate and communicate the purpose of the organisation, the value that it is creating for its environment. Set policies and establish frameworks to support the generative evolution of business models (Liv/ strategic-development) and work-systems (Liii/ Practice) that support the stated purpose. Examples: CEO; regional business head/ Exec GM/ VP; Government Minister; university chancellor

Unique Value Add

Forming the purpose and fashioning the boundary conditions and relationships with the environment and surrounding systems. Leading the organisation as a social-system; fully integrating organisational perspectives, especially of culture (Q3) and structure/ systems (Q4); ensure actions are congruent with values. Deciding on new products, markets, ventures and alliances; negotiating boundary exchanges and terms of trade. Influencing environmental factors (e.g. government policy, trade negotiations, regulations)

Decision-making

Create frameworks that can support/ contain multiple business models. Valuing multiple functional areas equally to balance and integrate their contributions to a coherent whole/ entity. Balancing competing demands for resources, time and attention; filtering noise from important information. Weaving wisdom to see the inter-relationships between bodies of knowledge/ expertise, business information on products and clients with industry trends

Creativity and vulnerabilities

Balancing outward and inward focus. Using uncertainty and ambiguity in the process of problem solving; probe – sense – respond (Cynefin); creating safe-fail experiments. Holding multiple mental models to create new patterns in customer demands, technology applications, regulatory requirements and market opportunities. Creating a motivating and compelling story/ myth of the organisation as accomplishing something great and bigger than the individual - legacy