Spans and layers
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The Human Resources military-industrial complex
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There is much management theory around the relationship of “spans” and “layers”[1] in the optimal organisation. We have heard it said that there should be no more than 5 “layers” of hierarchy in an organisation, and each manager in that organisation should “span” no more than 5 direct reports. Seeing as that limits the size of an optimal organisation to 781 people, we should not be surprised to hear that neither McKinsey (38,000 staff),[2] PWC (328,000 staff) [3] nor Deloitte (415,000 staff)[4] have resiled somewhat from the idea that this is a hard and fast number.
It depends, says McKinsey, on what kind of manager you are (“Player/Coach”, “Coach”, “Facilitator”, “Supervisor”, “Coordinator”). For PWC one must “baseline the existing spans and layers, then size the prize from a top-down perspective.” Deloitte perceptively notes that “different spans and layers are effective in different environments, and predict different behaviors”.
We were able to find a half-way commitment to a maximum of five, from People Puzzles. Why? Apparently, To make performance appraisal easier. This is pretty funny:
How many is too many?
Around five direct reports seems to be the optimum number, according to Mark and Alison, although there are some scenarios where up to nine can work.
When it comes to the senior team in a company, however, too many people reporting directly to the owner manager can really hold the business back. Alison recalls working with someone who had 13 people reporting directly to her. “She had to do 13 appraisals at the end of every year!” she says. “It simply wasn’t an effective use of her time.” [5]
To wit: a worldview in which the most significant thing you can do is manage, and the most significant part of management is performance appraisal.
The theory: look after the form and the substance will look after itself. Look after the pounds and hope the pennies take care of themselves. But of course they will: that’s what pennies do: they need no licence from the boss for that.
Counter-theory, therefore: performance comes despite management, not because of it.