Stratified Systems Theory Applied to Dream Teams
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This week’s article is an excerpt from The Science of Dream Teams: How Talent Optimization Can Drive Engagement, Productivity, and Happiness by Mike Zani, CEO of The Predictive Index, a talent optimization platform that uses over 60 years of proven science and software to help businesses design high-performing teams and cultures. It is a companion to his interview on Innovating Leadership, Co-creating Our Future titled The Science of Dream Teams that aired on Tuesday, September 14th, 2021.
What do you have to do next week? What will be on your plate four months from now? How about in two years? If you pose these questions to different people in your organization, you’re sure to get very different answers. Some will provide full to-do lists for different scenarios, while others will shrug, wondering why you’re asking questions that seem irrelevant to their jobs.
People across an enterprise hold wildly different ideas about the future. During the Cold War, a psychologist named Elliott Jaques carried out research on this subject and called it the Stratified Systems Theory. The idea, which was especially useful for the military, is that different jobs require different time horizons. Certain people are comfortable projecting far into the future, while others limit their view to a single week, or even a day. So the trick for a large bureaucracy, Jaques wrote, was to layer the talent according to people’s time horizons.*
If that sounds a tad theoretical, consider concrete examples. An engineer is heading up a team building a manufacturing plant. Working on the construction might be a welder who handles assignments thrown his way. He doesn’t have to plan too much for tomorrow or the next day. His time horizon can be counted in hours.
But the engineer takes a longer view. He has to consider the supplies he’ll need next month and the month after. By that point, winter storms might be blowing through. How will that affect supply chains and construction? He’s dealing with a number of variables over a time frame of several months. Next year, he knows, he’ll have a different project. But he doesn’t have to plan for it.
His boss does. She’s a regional manager who has financial responsibilities, a profit and loss report due every quarter. She’s already prospecting for next year’s projects, some of them in Europe. She’s busy calculating how many workers she’ll need, considering currency hedges, and gauging the risk of banking on contract laborers, which hinges on the job market next spring. She has to think ahead, at least a year or two.
She reports to a chief executive, who might be plotting an Asian strategy, including a massive acquisition in Japan. This person has to weigh variables far into the future, perhaps a decade, even longer.
When Elliott Jaques was drawing up his Stratified Systems Theory for the military, the expanding time frames, Strata 1 through 5 (see Figure 4.1), fit neatly into a rigid hierarchy. Privates didn’t need to think about the future, only to follow orders hour by hour. Each ascending rank required a longer vision, until you got to five-star generals, who had to consider the geopolitical implications in 5 years, or 10, of nuclear weapons development or the containment strategy of the Soviet Union.
While few of us run companies as hierarchically rigid as the military, it’s still valuable to measure the time horizons that employees are comfortable with, and to use them in the deployment of talent.
There are tremendous advantages in a workforce marked by higher strata proficiency. We strive for it in our company. One big plus is that a person who envisions what’s ahead is more likely to figure out what to do—thinking through the steps that lead in the right direction. These people need less management, and are frequently self-starters. They’re more likely to generate ideas because they’re imagining the future and scenario planning. People who think far ahead also have potential to climb into management and executive roles.
Getting a grip on strata is fundamental for designing reporting relationships in an enterprise. Think of what happens, for example, if a chief executive has an administrative assistant who functions on a Strata 1 level. To manage this person, the CEO must drop down to Strata 2, allocating perhaps 15 minutes every morning to go over what the assistant is going to do and how to handle certain calls and emails and calendar items. This is not time well spent. And for this reason, many CEOs hire executive assistants who function at high strata levels. These elite assistants can see the entire operation, and anticipate what’s ahead and what needs to be done. Often, they shed the assistant moniker and become executives in their own right.
If you’re in a small startup, you don’t need to think much about reporting relationships. But as a company grows to 200 people, it develops new levels, with executive vice presidents and division leaders. It’s while managing talent in such an enterprise, with five or six levels, that the strata take on importance. Ideally, each level will have to drop only one strata to manage its reports. Big gaps waste time and lead to frustration.
How do you test for strata? Tom Foster, a management consultant and author, proposes a question, such as: “When you finish what you’re working on now, how do you get more work?” Some people say they wait for their next assignment. Others ask their manager. Others might start to enumerate everything they know that needs to get done. The answer often reveals a person’s time horizon.
I often test for strata during the hiring process. After all, if we want high-strata employees, the job interview is a great place to screen for it. I might ask candidates to tell me a story about the most complicated project they ever undertook in their youth or early in their career. I’m not looking for altruism or team play or any other virtues. I’m focused on comfort with complexity and long-span thinking.
Some people, eager to flash their entrepreneurial credentials, tell me about a business they started. But when you poke further, there’s little there. For example, someone designs a website in college. It’s pretty good. And a local business pays him $500 to make another one. Pretty soon, he has a small business of his own, which pays a chunk of his expenses through college. That’s great, but it doesn’t show a strategic vision.
One of the best strata stories I heard was from a former high school actor named Rich Weiss. He and his friend worked on sets for a high school play. That didn’t sound so complicated to me at first. But then he described the constraints. There wasn’t much money or space. They had to figure out how to make a set that fit into the gym, one the school used for all kinds of activities. So the set had to be compact, moveable, and affordable. They had to plan in September to build it over the winter holidays, without interfering with basketball and gymnastics, and then stage it in March. Rich was clearly a strategic thinker. He now uses those skills to run important processes at our company. He doesn’t have to wait around for someone to tell him what needs to be done.
Excerpt from The Science of Dream Teams: How Talent Optimization Can Drive Engagement, Productivity, and Happiness by Mike Zani, pp. 60-65 (McGraw Hill, July 2021).
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About the Author
Mike Zani is the author of The Science of Dream Teams: How Talent Optimization Can Drive Engagement, Productivity, and Happiness and CEO of The Predictive Index, a talent optimization platform that uses over 60 years of proven science and software to help businesses design high-performing teams and cultures. Zani is also the co-founder and partner at Phoenix Strategy Investments, a private investment fund. An avid sailor, he was the coach of the 1996 US Olympic Team. He holds a BS from Brown University and an MBA from Harvard Business School.
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