Did you ever have a boss whose span of control consisted of only 2 or 3 direct reports? It is very frustrating. He or she is just not busy enough, so they meddle, wasting a lot of people’s time and preventing the direct reports from having full authority and responsibility. Narrow spans of control typically mean more bosses which leads to excessive layers which fosters bureaucracy.
When I was at Procter & Gamble, I led a corporate effort to cut layers and broaden spans of control. This was in response to costs that had gotten a bit out of control, and excessive layers that were slowing down decision making. What we found shocked us. Too many managers at virtually all levels had too few direct reports. Many managers at the lower levels had only 2 or 3 direct reports. Many executives at high levels had only 3 or 4. In most of our divisions we had 9 or 10 layers from entry level to CEO. We had to do something.
The key principle that should underpin a spans-and-layers structure is that as managers gain more responsibility, they should be able to handle more direct reports. We concluded that a first level manager should have a minimum of four direct reports. That’s not a big load but it’s large enough to keep a less experienced manager busy. Then as you go up the chain of levels, you can slightly increase that minimum number of direct reports for each level. Certainly eight direct reports at the high levels should be quite manageable.
At P&G the above thinking caused us to move to 7 layers, with entry level people being level 1, level 2 was for first time managers and we required at least 4 direct reports. Level 3 managers had 6 or more, level 4 had 7 or more, and levels 5, 6 and 7(the CEO) had 8 or more.
For individual contributors didn’t manage people, we instituted a technical ladder (7 rungs, parallel to the management) so we could recognize talented individuals who didn’t manage, but were quite valuable.
Net, we reduced headcount by decreasing the number of managers, and we significantly decreased bureaucracy. Bosses were too busy to meddle, and there were fewer layers to fight through to get things done.
Check out the spans and layers in your organization; you may be surprised!