Friday, September 21, 2012

Global Leadership- Anticipation and the Time Horizon

One of my top leadership insights has been that the leader's time horizon extends as they go up the organization.  I also mentioned in yesterday's blog that the ExxonMobil CEOS(Lee Raymond and Rex Tillerson) mentioned in Coll's book were required to have a time horizon measured in decades.  I want to spend a little more time with this subject today.

The best, data driven work I know of in this area was done by Dr Elliott Jaques.  I'll not try to summarize his entire impressive body of work but focus on the different levels in an organization and the time horizons required to effectively function at each level.  He defines several organizational levels he calls "Stratum" and the time horizon associated with each.  A high level overview looks something like this:

Stratum I- Operators, salesclerks; introduction of new tasks requires supervision
Time Horizon: One day to three months

Stratum II-First line supervisors; small business owners
Time Horizon:  Three months to one year

Stratum III-Department heads; workshop managers, multi-site franchise operators
Time Horizon: One to two years

Stratum IV-Leaders of leaders
Time Horizon: Two to five years

Stratum V: VP of large company
Time Horizon-Five to ten years

Stratum VI- CEO of 20,000 employees or EV of a larger company
Time horizon- Ten to Twenty years

Stratum VII- CEO of > 20,000 person company
Time Horizon- Twenty to fifty years

If this subject interests you, I suggest Jacques books The Requisite Organization and Executive Leadership.  There is much more detail there about organizational structure and leadership requirements than I can share in this blog.

I want to make two final points on this time horizon subject.  I know there are a number of younger leaders who read this blog....Stratum I-III in Jacques model.  My message to you all should be reassuring....if you are a first line supervisor it is just fine to have a time horizon of three months to one year; or as a department head or multi-site leader of one to two years...that's the way a well designed organization works.  You don't need to think about issues twenty to fifty years out like Lee Raymond and Rex Tillerson. Conversely, if you are a leader at level IV or above and your time horizon is less than two to five years you may be putting your organization at risk.  I've seen far too many leaders at Stratum IV and above whose time horizon has never extended past the one to two year mark. Sometimes they can't...Jaques describes this as a "cognitive complexity" problem.  There are other times when longer term planning gets either "pushed" up(the tyranny of the urgent) or "pulled up"(micro managed) the organizational structure.  No matter what the cause, the "failure to anticipate" leadership failure can often be attributed to a too-short leadership time horizon.


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