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Designing your organization for competitive edge, part 2 – layers determine efficiency

Last month, this column focused on a fundamental of organizational design: spans of control. Now let’s consider how the number of layers intersect with spans to determine the efficiency of workflow and speed of decision making. This concept is best illustrated by a personal example.

Earlier in my career I joined a large publicly held company as a senior vice president. My role was to build a new function devoted to enhancing organizational capability. Ironically, in the first few days I learned how many layers can dramatically slow down workflow.

To start, the company had transferred an intact work group to report to me, but the expectation was that the team would grow. I received a request from our facilities manager for a space plan for our expanding function. The task involved completing a rather complex computer form. I approached an employee who had previous experience in filling out the required forms.

When I asked for her help, she replied that before she took on the task, I should check with her supervisor. I did, only to discover that the first woman reported to someone, who reported to someone, who reported to someone, who reported to someone, who reported to someone, (sigh) who reported to me. A group of nine had seven layers of management. The span of control for the managers/supervisors was one. What should have been a five-minute conversation turned into more than an hour. An illuminating hour, to be sure, but still an hour.

In such a steep design, managers have little responsibility or authority and work slows markedly. Furthermore, the culture will likely have a rigid pecking order that undermines teamwork and flow. Such an organization simply cannot be agile. As my work to build organizational capability unfolded, I knew a good place to start.

Look at the spans and layers in your organization and determine what is right for you. Ask yourself: What is the span of control for each manager and how many layers between the CEO and the individual contributor? Again, these factors change over time, so it is wise to conduct an annual review to refresh and renew.

Next month, we will look at how job design and reporting relationships can drive competitive advantage.

Linda Clark-Santos, is a consultant and executive coach. lcsbusinessinsider@gmail.com.

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