The best practical model to assess Levels of Thought / Mental Capability was described in Executive Leadership by Elliott Jaques. High output organizations are characterized by clearly demarcated levels of authority and accountability, and ensuring the people at each level of the organization are mentally equipped to do their jobs. Elliott Jaques’ developed a Stratified systems Theory to explain organizational behavior and organize people into roles that match their mental capabilities.

The first step in this process is to define the task capabilities needed for each role in the organization. Fortunately there are only four classes of task capabilities and roles as relate to mental processing. They are shown in the “The Four Types Of Task Complexity” figure.

Excerpting from the Executive Leadership book, these four types of task complexity can be described in terms of the minimum that has to be done to cope with the variables that are encountered in solving problems related to the task.

Diagnostic accumulation: Problems have to be anticipated and resolved by sorting out and accumulating significant information and putting it together to anticipate problems and overcome
difficulties.

Alternative Serial Plans: Possible ways of carrying out a task have to be devised and evaluated, and one of the alternatives chosen and planned. That plan is then followed, always with the possibility of changing to an alternative plan if major difficulties are encountered.

Mutually Interactive Programs: The task requires that numbers interactive serially planned projects be undertaken, and adjusted to each other with regard to resources and timing as the work proceeds, so as to keep the total program on target.

Categories of Task Complexity

In addition to the four types of task complexity (as is also the case with the four cognitive processes discussed below), the four orders of information complexity (A, B, C, and D) have to be taken into account too. For example, a task that has to do with anticipating difficulties which are likely to be encountered in using a spoon to eat a bowl of soup (cumulative processing of the first order complexity of information (A) in a concrete world) will be substantially less complex than the task of anticipating difficulties which are likely to be encountered by a detective in solving a crime (cumulative processing of second order complexity of information (B) in a verbal symbolic world).

Thus (as was the case for the categories of cognitive complexity), combining each of the four orders of information complexity with the four types of task complexity, gives the same range of categories of task complexity running from category A- I to A-4, B-I to B- 4, C- I to C- 4, :lnd D-I to D-4. But practically these can be limited to B- I to B-4 and C- I to C-3, since these cover the world of managerial leadership in stratum-I to stratum-VII.

Second Order Categories of Task Complexity: The following are illustrations of the nature of task complexity in tasks to be found at stratum-I to stratum-IV.

Category B-1 task complexity (stratum-1): Direct action in immediate situation These are the kinds of task found at shop- and office-floor level. The task requires a person to proceed along a prescribed linear pathway to a goal, getting continual feedback in order to proceed. As problems are encountered, the person has to use practical judgment to decide what is wrong and then has to apply previously learned methods [or overcoming obstacles. If the methods are unsuccessful, the person reports back to his or her manager. Examples of such tasks would be: type this memorandum, coping with words which are difficult to read; drill holes with this jack hammer, and get around big rocks in the ground which are in the way of the drill.

Category B-2 task complexity (stratum-II): Diagnostic Accumulation. These are the kinds of tasks found at first line managerial level. An individual must be able to note things that might indicate potential problems and obstacles, accumulate such potentially significant data, and initiate actions to prevent or overcome such predicted problems as may be identified. Examples would be: design a new jig for this machining process, working out the design as the job proceeds, accumulating data on how various parts are most likely to fit together so that the whole will work well; use good detective procedures to accumulate the evidence necessary to find a hit-and-run driver.

Category B-3 task complexity (stratum-III): Alternative Serial Plans. Increasingly complex situations require alternative plans to be constructed before starting out, one to be chosen and serially progressed to completion, with possible change to another alternative if necessary. For example, a person in a computer company heads a team of four programmers on a project to create a program that will make it possible to translate material from one computer language to another. She constructs three possible paths to the goal: the first would be sure but would take much too long, the second would be excellent if it worked but would lead to an expensive project failure if it did not, the third is relatively sound and could most likely be completed in the time available although it might be slow and might create uncertainty in the early stages. She opts for the third.

Category B-4 task complexity (stratum-IV): Mutually Interactive Programs. These are problems still more complex because they comprise a number of interacting programs which have to be planned and progressed in relation to each other, and controlled by transfer of resources between them and by adjustment of resources and schedules so as to keep the overall program on target. Trade-offs must be made between tasks in order to make progress along the route to the goal. For example, a designer and developer of new venture products for a large corporation (who has four assistants to help her) has to construct and pursue simultaneously a number of development paths: a developing design of the product and product applications, an in depth analysis of potential international markets, the making and testing of models of the new product, and a sustained commercial analysis of its potential business value to the Corporation. A balanced focusing of attention upon each of them in relation to the others is essential yet difficult; the designer may require to change any of the pathways at any time and, in doing so, she will have to adjust each of the others, all in relation to one another.

Third Order Categories of Complexity: Corporate Strategic Levels. Here are some examples of the basic categories which show up in the conceptual order of ideas and language, second order of abstraction (category C-I, C-2, and C-3). This broad order of complexity characterizes the corporate strategic world.

Category C-1 task complexity (stratum-V): Situational Response. These are the kinds of task faced by presidents of strategic business units in large corporations. Practical on-the-spot judgment must be used to deal with a field of ambiguous conceptual variables, and to make decisions envisaging the second and third order consequences of those decisions. For example, a business unit president is driving half-a-dozen critical tasks to achieve a 7-year plan, and must continually pick up the important area of impact and the likely consequences of changes and events on customer attitudes, on competition and policies, on world commodity prices, on legislation, on third world countries, on tariffs, on technology, on his own R&D programs, on interest and foreign exchange rates, on availability and cost of capital, on cash flow, etc. In order to do so he maintains a continuous “what-if” analysis of business priorities to sharpen his judgments of consequences and of what has to be done at any given time. He must rely upon situational responses and direct action, as he steers the business in the surrounding environment, to keep his profits at a reasonable level while maintaining customer goodwill, high morale among his own people, and the survival of the business with a growing balance sheet value.

Category C-2 task complexity (stratum-VI): Diagnostic Accumulation. This is the level of corporate executive vice-presidents who must build up a picture of likely critical events world-wide, international networking to accumulate information about potentially significant developments to could affect the Corporation and its business units. In order to take sound actions, they must anticipate changes so is to forestall adverse events and to help to sustain a friendly environment for corporate trade. Thus an executive vice president, overseeing six full scale P&L account business units, sustains a worldwide network of information sources and pics on changes which may constitute unexpected threats are opportunities for any of his business units. He applies pressure to influence this environment, by such means as sponsoring or encouraging particular pieces of research at universities or research associations, and meeting with potential and government leaders and with senior executives of large customers. By means of accumulating significant conceptual information, and within corporate capital expenditure policies, he decides whether and when to make changes in the major resourcing of the business units, taking into account other corporate priority demands.

In the “CTO Critical Success Factors” figure, the elements facing a Senior Executive in charge of growing the company are shown as a mind map. It illustrates the complexity of elements in the thinking process and the way in which they might interact (positively and negatively) in complex and non-linear manners. Such is the world of a Category C-2 person.

Category C-3 task complexity (stratum-VII): alternative Strategies. This is the level of corporate CEOs working out strategic alternatives for worldwide operation, using complex conceptual information concerned with culture, values, and the business of nations and international trade.
For example, a corporate chairman and CEO is expanding his company, developing two additional executive vice president roles as a base for growing between five and seven new business units. Some of these are already partially grown within the company but are in need of capital infusions to enable them to grow into true P&L account subsidiaries. Others are to be developed based upon new products in new fields, and some are to be added by the acquisition of new small companies with interesting products and outstanding young potential talent — double gain. He’s worked on a number of alternative strategic alternatives, and has obtained support for them from the board and his senior subordinates, and is currently pursuing one of them that calls for penetration into related fields both at home and abroad. It is a program that is designed to see the Corporation well into the next century.

Because these categories are steps in task complexity or at the very heart of the requirements for the sound structuring of the managerial hierarchy they have been discussed in detail. They tell us just what the correct number of managerial layers ought to be (one layer for each category of task complexity). And because each category of task complexity has a corresponding category of cognitive complexity in human beings, it is possible to reap great benefits from being able to match task complexity in work with complexity in peoples’ mental capability. That match is discussed following section and gives an important basis for achieving managerial competence and effective management.

Time Span and the Measured Level of Work in a Role

A double check in defining the work to be done at each level of complexity in a company can be done by looking at “the target completion time of the longest task, project or program assigned to that role.” At stratum 1, the production line or the data entry operation, it might take a day to set up a lathe or 20 minutes to enter form information. At higher levels, tasks extend farther in the future: perhaps two years for a sales manager to rebuild a marketing organization for five years for a CEO to turn around a company. Field research showed that across all types of organizations people were consistent in their cut-off points for various stratums: Three months for stratum 1, one year for stratum 2, two years for stratum 3, five years for stratum 4, and 10 and 20 years for strata 5 and 6. Using these metrics helps refine role assessments for an organization.

Matching Human Capital to the Roles That Exist in an Organization

Elliott Jaques spent decades testing the cognitive abilities of people in various strata, and can now reliable predict their capacity to rise to various levels. This cognitive ability ranges from the very concrete (“hand me that broom”) to the very abstract, in which a person is capable of imagining several chains of possible consequences and relating one possible outcome to the others.

In their article “The Overlooked Managerial Competency: Observing Complexity of Information Processing (CIP) to Match People to Jobs and Determine Future Potential” Glenn Mehltretter and Michelle Malay Carter outline the process of measuring cognitive ability. Excerpting from their paper they define a person’s complexity of information processing (CIP) as the maximum quantity and complexity of information that can be processed by the brain at the present time. CIP was found to be a determining factor of the level of work, in terms of complexity, an individual can successfully perform. Becoming familiar with CIP levels was found to give managers a universal and consistent way of observing and discussing which employees would be suitable for varying levels of jobs. The process used by Mehltretter and Carter consists of examining both the structure and content of a person’s speech when he or she is fully engaged in arguing a point.

To show a simple example of how this works Mehltretter and Carter state the first four levels of CIP capability necessary for organizational work. Note how each successive level allows for increasingly complex approaches to problem solving. Sample interview excerpts of people demonstrating the various levels of CIP follow each definition. As you read them, pay particular attention to the way the subjects group and organize their information. This can be done by attending to the connecting words such as or, and, if, and then.

1. Declarative problem solving is the least complex. It is representative of the problem solving needed in shop and office floor roles. It does not include the ability to see things coming. In work situations, it involves following procedures and addressing “glitches” only as they are encountered. Solutions are formulated in terms of independent thoughts. There is no explicit connection between or among ideas. This form is akin to disjunctive logic of A or B or C. Common jobs requiring this level of problem solving are: Clerk, cashier, many administrative assistants, line worker, and many technicians.

When asked the question, “How can we improve productivity at our manufacturing plant?” a person (Assembly Line Worker John) using declarative problem solving might answer: “We need better equipment. It breaks down too much. Management should listen to line workers ideas more. We could help, but they don’t ask. They should rework the scheduling so we’re not so tired all the time from pulling long shifts.”

The speaker presents three independent ideas. The solution could be doing any one of these, as opposed to doing all three of these. There is no explicit indication that two or three of the ideas should be done together.

2. Cumulative problem solving requires one to accumulate bits and pieces of information and begin to see a pattern: in other words – the ability to see things coming and be proactive. Solutions are formulated in terms of an explicit accumulation of related thoughts. The proposed solution is the weight of the sum of the parts. This form is akin to conjunctive logic of A and B and C. Common jobs requiring this level of problem solving are: first line manager, some district managers, many retail or restaurant managers, entry engineer, scientist, or programmer.

When asked the same productivity question, a person (Assembly Line Manager Susie) using cumulative problem solving might answer: “Our equipment is ancient. It breaks all the time. We need updated equipment. Besides that, a suggestion box might help. The line workers have good ideas, but no one takes them seriously. The first suggestion I would put in the box would be for new equipment. And another thing we should do is make the schedules more consistent. We have people moving from day to night shift too frequently, and we require too many double shifts.”

The speaker presents the same three ideas as in the preceding example. However, its explicit that implementation of all three parts is intended.

3. Serial problem solving requires the ability to see a series of cause and effect relationships. Solutions are formulated in terms of explicitly stated sequences of at least three items. This form is akin to conditional logic of If A then B, and if B then C. A→B→C. Common jobs requiring this level of problem solving are: some district managers, some regional managers, unit manager, any manager of first-line managers, sr. engineer, scientist, or programmer.

When asked the same productivity question, a person (Department Manager Joe) using serial problem solving might answer: “Our equipment breaks down all the time. This wreaks havoc with our scheduling and requires we reschedule employees for other shifts and/or have them pull doubles when the equipment is working. So we need to get the equipment replaced and then create a more consistent scheduling plan. It might make sense to get the line workers’ input on what type of schedules they would prefer before doing the plan.

The solution is a three-fold sequence of events. Replace equipment → Seek scheduling input from line workers → Create more consistent schedule

4. Parallel problem solving requires the ability to see connections among multiple serial paths. Solutions are formulated in terms of explicit relationships between two or more series. This form is akin to bi-conditional logic of If A then B, but if and only if C then D. Note that Serial problem solvers can conceive of multiple serial paths, but they deal with them independently. Common jobs requiring parallel problem solving are: large plant manager (250-300 people), director, general manager.

When asked the same productivity question, a person (Plant Manager) using parallel problem solving might answer: “Well it’s obvious that we need new equipment to reduce downtime which kills our productivity. However, new equipment will call for much more electronics and computer savvy on the part of our maintenance staff. So, we need to begin to upgrade our maintenance department’s capabilities and to add staff now to prepare for the new equipment. At the same time, new equipment may make some line workers jobs obsolete. In order to minimize layoffs, we should see any line workers are interested in cross training in maintenance and eventually becoming part of the maintenance staff. Once all that settles down and all the training is done, we can make our scheduling more consistent. Our current scheduling is at the “will” of the equipment. I know it makes the associates angry and there’s no telling how many ways that impacts productivity.

The solution contains several explicitly connected series. The plant manager may need to slow down or speed up certain series in order for them all to come together at the step that is shared by all the series – Buy equipment. The end result of all these series being deployed interdependently is higher productivity.
Capital Investment Series: Buy equipment → Less down time → Higher productivity
Department Upgrade Series: Upgrade maintenance dept. →Hire more maintenance technicians → Buy equipment
Direct Labor Series: Find line workers who want to enter maintenance → Begin cross training → Buy equipment → Some line workers become maintenance staff
Scheduling Series: Buy equipment → Training → Scheduling overhaul → Higher productivity

There have been found two equally reliable and valid methods for judging mental capability potential – Direct Observation and Managerial Talent Pool Evaluation.

The method of direct observation of CIP described above allows evaluation of mental capability as people converse in a variety of everyday situations. Elliott Jaques scientifically validated that accurate results can be achieved through direct observation by a trained observer. When employee selection decisions are being based on the observation technique, the protocol is for interviews to be recorded, transcribed and examined on paper in order to ensure accuracy of the observation.

An alternative approach can be used when an organization desires to judge the current potential of current employees rather than outside candidates. This approach, the Talent Pool Evaluation process or TPE, involves groups of managers and managers-once-removed making these judgments following a facilitated group process. Results between the two processes correlate at the 0.95 level.

It should be noted that there is a strong correlation between cognitive ability and time horizons. That is the better we are at processing information, the farther we are able to project ourselves into the future. This becomes acutely important when a CEO’s cognitive abilities fail to match the level of hierarchy he or she occupies. In this case what happens is that he or she shrinks that company down to his or her own level.

These examples illustrate how people can have their mental capability (Human capability to process Information) assessed at a point in time. One’s ability to process information is not however static. It matures with age in a predictable manner. Therefore, once an adult’s current complexity of information processing is identified, his or her rate of growth (future potential) can be forecasted using Jaques’ empirically developed and longitudinally validated progression curves.

For reasons not yet understood, some people mature to a higher level of information processing capability by the end of their careers. This is why some people desire to move up the corporate ladder to more and more complex jobs (high potential mode), and others are content to stay within one job throughout their career (expert mode). A full appreciation of this concept can help managers use their employee training and development dollars most effectively. Knowing an employee’s progression path will point toward one of two developmental strategies: increasing depth of knowledge (expert mode) or breadth of knowledge (high potential mode).

Excerpting from Alexander Ross in the Canadian Business Journal, the biggest insight (and controversy) in this approach to Human Capital planning is the finding that each person has an inherent potential for cognitive development and thus equipped to rise only so high, and not higher, in an organization. Learning and experience will enhance their skills and knowledge, but no amount of positive thinking can change their potential to approach problems in increasingly sophisticated ways. This is illustrated in the “Progression of Mental Maturity of Individuals” figure.

The recommendation is that annually an organization assesses the roles that it has and will need over the next five years, then map the mental capabilities of its members to those roles. In R&D and other specialty organizations with non-transferable Skills, the mental capabilities for each Skill type must be kept separate in the planning process. Key is to provide high potential individuals (those destined for stratum IV and V) work challenges commensurate with their capabilities, or otherwise they are at high risk of leaving the company for another job.