Challenges and Successses in Using Requisite Organization

Speaker A It has been a great struggle to try and bring requisite organizational theory into my business in such a way that it actually applicable where we're using it. Looking at my immediate problems again, I'm assessing current employees, two vice presidents. Do I have the ability to have a successor there? Am I going to have to bring another individual into the business to train in the role as a successor to myself? One thing that became apparent to me over the last year, and it was through confrontations with my operations VP is that he felt that I had failed him in some major ways. One of those was that I was not creating the disciplines within the organization that was necessary for the successful operation and that we had the opportunity to be bigger, if not bigger. We had the opportunity to be better and more efficient. Putting it in this context that he couldn't rely on me to take the actions that was necessary for him to do his best job. Well, I stopped and thought about that. And first of all, it's in my nature to procrastinate not to avoid making decisions, but to delay making decisions until I thought I had all the information necessary to understand it. And then it occurred to me in reading through again and again and again, reading through Jack's material and the Ghost Society book in particular, was that the only really means to resolve this was to get good definition of the roles and where there were conflicts in those roles, either in the authorities or in the permissions. By bringing this VP into the process with me and frankly, through a number of some very difficult conversations, because he wasn't entirely correct in some of the assessments that he was making, we've reached a whole new level of understanding between ourselves. We're capable now where before a fierce conversation was one in which he left Pouting and I left would leave feeling frustrated that he didn't understand. Those fierce conversations now are done in a very amicable level and without any hard feelings resulting at the end of it with regards to are things ever going to change? He does understand it's part of the process and that he is part of the process of making those changes. Over the last two or three years, we've put together our organizational charts based upon requisite organization, time span horizons, trying to define where those roles should fit within the organization. Let's see what else. Pay levels, at least for the last three years. Our annual compensation review, which basically takes two parts. An annual wage increase, which is somewhat inflation oriented, sort of usual type of raise, but it's also the point in time each year when we take a look at all of our employees with regards to Ferret field pay. Every year we do an annual review pay scale review for both our field supervisory staff and office staff, even though we're a union construction company. In addition to the wages prescribed by the union collective bargaining agreement, all of our employees that are in any kind of a leadership role get incremental wages based on our assessments of how they're performing relative to their peers. And how they're performing relative to the complexity of the jobs which we pass on to them, so that we do a comparison and grouping into thirds between at each of those working levels to see where those individuals should fall. Amazingly enough, it does work. Everybody's pretty well satisfied, with a few notable exceptions, those that will never be satisfied. Everyone's pretty well satisfied with their treatment in that regard. The second phase each year of pay occurs when we bonus at the end of the year. Our company, as a matter of policy, privately owned, we try and make a distribution of 20% of pretax profits back to the employees other than the management employees. And so there's a great discussion that takes place there of how that money should be allocated. I have not yet been successful in working with my stratum three people with regards to how those assessments are done. My two vice presidents have become adept at the role and understand how we're making these allocations, that it's not based on the outcome of particular jobs, that it's not based on the number of men that they are being employed, but it's based on their capabilities relative to the capabilities of their peers. And of course, then also based upon the successful behaviors. The interesting part is that the employees also understand that it's their overall performance together which generates the revenues that eventually get them those payments. That's been a good success for us. You Sam.