How the Stratified Systems Theory Works

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This article provides a detailed overview and expert insights on Stratified Systems Theory (SST) to help support a sound, informed decision on framework implementation.

What Is the Stratified Systems Theory  Framework? 

Stratified Systems Theory (or SST) is a framework for designing organizational hierarchies and roles based on the complexity of work at different levels (seven levels total) — each with a different time span of discretion (in other words, the time it takes for an individual to complete a task that they can comfortably undertake without supervisory oversight). The framework assigns different time spans to different work roles across levels. 

Who Created SST?

SST was developed by Elliott Jaques and encompasses more than 45 years of organizational design expertise. A Canadian psychoanalyst and organizational theorist, Jaques developed SST to offer a systematic and scientific approach to organizational management. 

Jaques developed SST to objectively measure the complexity of work in roles and provide an understanding of a human’s potential capability and its maturation over time.

5 Levels (Strata) of Time Span of Discretion

The framework assigns different time spans to different work roles across levels. At a high level, Jaques found in his research that the most effective organizations were structured in a way that noted that as someone moves up in an organization, they must be able to focus on projects that take longer periods of time without close supervision. The higher someone is in the organization, the longer the time span into the future an individual needs to be able to get smart stuff done. 

Essentially, this breaks down to the following levels (or Strata): 

1. Roles (or Seats) at this level are focused on tasks and objectives up to three months ahead.
2. Supervisors focus on responsibilities from 90 days to one year. They are often accountable for overseeing the work of Stratum 1 team members.
3. Leaders in areas of expertise (or Core Functions) are accountable for initiatives that span 1–2 years.
4. Leaders at this level often focus ahead 2–5 years on long-term strategic planning and integrating Core Functions. (These are often C-Suite.)
5. CEOs at this level are thinking out 5–10 years. 

Stratified Systems Theory Examples

Consider this simplified example of time span of discretion: 

• front-line employees (or team members) focus on daily tasks;
• middle management on monthly or quarterly goals;
• and senior leaders (or executives) on yearly plans and long-term strategies.

Or let’s look at a more detailed example that includes all seven levels of SST:

Jaques developed SST as an alternative approach to antiquated, title-based hierarchies. The theory focuses on designing organizational hierarchies and roles that align with the complexity of work at a given work level. Jaques observed that team members naturally agreed with pay levels based on the time span of discretion, which is used as an objective measure of work complexity.

SST also offers a systematic, scientific approach to structuring organizational work levels and roles by matching a team member’s cognitive capabilities with the complexity of work assigned to them. This helps mitigate over- and under-employing by aligning capabilities with appropriate role complexity.

The theory further clarifies accountability and decision-making authority at each level of the hierarchy. SST offers the basis for defining who is accountable for certain decisions based on time span of discretion and role demands. This better supports fair and equitable compensation by aligning pay levels to measured complexity of work over job titles or pay demands.

Overall, SST offers greater rationale, equity, and effectiveness to organizational structure because it’s based on empirical assessment of work complexity and human capabilities.

Key Pain Points Addressed

Stratified Systems Theory was developed to address common organizational challenges for Stage 3 companies, including:

Broadly, SST provides an objective, systematic, and measurable method for structuring organizations, hierarchies, and individual roles.

When You Should Apply Stratified Systems Theory

SST is applied in organizations that have reached Stage 3 (Scale) of Ninety’s Stages of Development. A Stage 3 organization:

PROs and CONs of Stratified Systems Theory

As you evaluate SST, consider the top pros and cons of this framework adoption:

PROs

CONs

While there are many pros to SST, including alignment of human capabilities with distinct roles and equitable compensation, there is a lot to consider before making the move. With this in mind, working through the ACTIONABLE GUIDANCE section below will help you determine if SST is a good fit for your organization and the next steps required to get you there.

Ensure deep understanding of the theory:

Research the core concepts of SST, including the seven Strata of work complexity, time span of discretion, and cognitive capabilities required at each work level.

Evaluate your existing organizational structure

• Evaluate your organizational hierarchy and roles. How are accountability and decision rights clarified across work levels?
  
• Identify any mismatches between job complexity and employee capabilities.

Map work complexity

• Analyze tasks and responsibilities across the organization.
• Categorize work into the appropriate Strata based on decision-making complexity and time span of discretion.

Evaluate employee capabilities

• Use assessment tools like the Cognitive Process Profile (CPP) or Cognitive and Potential Assessment (COPAS) to measure team members' cognitive abilities.
• Match these capabilities to the appropriate work levels within your organizational structure. Also identify roles that may be at risk for over- or under-employing — that is, who may be over- or underqualified for a given role.
  

Redesign organizational structure

• Align roles and reporting structures with the identified work complexity levels. This helps ensure that your structure is solid and, from there, that you have the right people in the right seats.
• Ensure clear accountability and decision-making authority at each level.

Develop job descriptions

• Create or revise job descriptions to reflect the complexity and cognitive requirements of each role and its related responsibilities.

Implement fair compensation

• Develop a compensation structure that aligns with the complexity of work at each level to ensure compensation equity.
  

Train management

Educate managers on SST principles and how to apply them in their leadership roles. Ensure managers cascade information to all team members to support company-wide buy-in and positive promotion.

Create development plans

Design career paths and development programs to help team members grow into higher complexity roles over time.

Monitor and adjust the new structure

Assess the new structure's effectiveness regularly and make adjustments as needed to ensure optimal alignment between work complexity and team member capabilities.

Foster a supportive culture 

Encourage open communication and collaboration across levels to support the new organizational framework. Buy-in across the business is critical.

Seek expert guidance

Consider working with consultants experienced in SST implementation to guide you through the implementation process and provide proven, tested insights at each phase.

Implementing any new business framework is a significant organizational change that requires leadership commitment and significant time investment to fully realize its value. Approach implementation systematically, with a concrete plan in place, and be prepared to make adjustments along the way to ensure long-term success.

Next Steps

For those ready to take action, consider these actionable steps: