Do You Have Too Many Direct Reports? -- Six Questions to Consider
This is a topic that came
up in a recent Chief Executive Boards International meeting. A member said he
was just "burned out" by the continuing pressure of "fire
fighting" and "having to do everything myself". He said he had
trouble "holding managers accountable" and getting his key managers
to do handle their responsibilities themselves, rather than delegating them
upward to him.
When asked "How many people do you have reporting directly to you?",
he answered "Ten". Bingo. Few, if any, managers can manage ten
people -- let alone more. And if, in fact, you can manage ten people, what
will you do when the company reaches twice its current size -- manage twenty
people? If you're having trouble growing your company or seeing too many
things falling through the cracks, have a look at the span of control at each
layer within your company.
Span of control (how many people report to a given manager or supervisor)
varies, inversely with the complexity of the job being
supervised. See a great Wikipedia article on this topic here: http://en.wikipedia.org/wiki/Span_of_control.
In short, the more diverse (less homogeneous) the functions managed, the fewer
people most managers can manage. At the top tier of a mid-sized company, that
number should be no more than five or six. Functions like Sales, Finance,
Marketing, Operations, HR, etc. are highly diverse -- being a CEO and looking
after 8 or 10 such functional managers is a job Superman wouldn't sign up for.
On the other hand, as the jobs being supervised become more homogeneous, such
as a group of delivery drivers, machine operators, etc., a span of 10 or 20 is
not beyond imagination. The work is routine, the exceptions few, and the
"face time" between the supervisor and the work is minimal.
What happened to this CEBI member was that he was trying to manage ten
managers, each with substantially different responsibilities -- a span of
control beyond most CEOs' abilities & energy levels. This super-human
effort caused him to be unable to spend enough "face time" with each
to define expectations, and as a result their accountability slipped. To solve
that problem, our member found himself fighting fires -- reaching around his
managers, making diving catches of things falling through the cracks. A
downward spiral, resulting in his feelings of burnout and overload.
He's presently reassessing his organization, considering breaking it up into
three or four smaller units, managed by his three or four most capable
managers. This strategy repositions him to grow, as well. It's easy to imagine
extending this structure to handle double the amount of business by adding 1
or 2 additional managers at the top level and still maintaining a reasonable
span of control for himself.
As a quick "check up" on your own organizational chart, look for
situations where spans of control exceed six. Are those situations working,
and are they explainable, perhaps because those supervisors are managing
highly homogeneous jobs? Or is there, in fact, a "superhuman"
manager (perhaps yourself) in a position where he's become irreplaceable?
Would it be better to break that job into parts that a couple of
"ordinary" managers could handle?
Here's a checklist you can use:
- Is it really clear to each person in my company who they report to?
- Is it really clear to each person in my company what their direct
- Where do I have more than 5 people reporting to a single manager or
- Could he handle twice as many? If not, it's a growth bottleneck that
will soon need a second manager to share the load.
- Do I have more than 5 people reporting to me? If so, what would happen
if our business doubled? What do I need to do to plan for that and build
my management team's capacity?
- Do I do lots of fire fighting myself -- catching things "falling
through the cracks"? Do I have enough time to hold my key managers
accountable, instead of myself?
An always-useful organizational design question is "What would
the organizational chart need to look like if our business doubled"?
Putting the question this way makes "we'll work harder" an unlikely
answer. Yet, if you ask "what would happen if our business increased at
15% per year?", "we'll work harder" is a more-than common
answer. At that rate, a business doubles in only 5 years, and generally
overwhelms a management team that hasn't planned for it. It takes awhile to
grow and develop a management team, and running them at their maximum span of
control is a subtle, yet inevitable limitation to growing the business.
Take a hard look at the way your organization is structured and at spans of
control at each level. You may discover one of the things that's getting in
the way of your growth and perhaps also getting in the way of your own
satisfaction with the way the organization works.
These kinds of ideas
surface at every meeting of Chief Executive Boards International. If you have
an interest in ideas that will accelerate your business and provide you more
fulfillment, more wealth and more time to
enjoy it, contact me at: firstname.lastname@example.org