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In an organisation of any size that has been around for a while, your management organisation chart will most likely have a bad case of bloat.  This Profit Savvy Menu article looks at how you can trim your management tree down to its former trim glory.

Management Organisation Charts tend to become bloated over time for all sorts of reasons including:

  • Adding more staff to support weak staff in place rather than replacing them.
  • Not letting “nice people” go – perhaps to (allegedly) maintain morale.
  • Takeovers and mergers not accompanied by staff adjustments.
  • People hired for now finished projects but not downsized when the project finished.
  • Nepotism (e.g. he’s the boss’s son).
  • “Token” people to fill diversity slots which now might have better incumbents as businesses evolve.

This article is not a single approach to trimming organisational fat.  It is a typical Profit Savvy collection of topics relating to the issue.

How Many Can a Manager Manage

There is a management concept called the "Span of Control".  It refers to the number of direct reports a manager should have.

Conventional wisdom suggests that managers should typically have at least 8 direct reports.  In some organisations, it is many more.  At General Electrics, for example, it was reported that the number was an average of 15.

One can see a functioning example of this concept in the Armed Forces when you look at the ratio of Sergeants and Officers to Privates in the operational units of the Army. Bear in mind that the Army is an organisation designed to function well under crisis so they no doubt have had time to get their Span of Control ratios worked out in more trying conditions than you are likely to face.

A study of a Management/Organisation Chart of your existing organisation can be an enlightening way to see where managers can be removed.

Company Org Chart Full


If your organisation chart shows managers with fewer than (say) 8 direct reports there is a good chance you could safely make some of those managers redundant and merge their direct reports into groups under other managers.

An exception to this might be if that manager is a technician actually being ‘productive’ in their job.

If they are solely supervisory, Parkinson’s Law (see Parkinson’s Law article) says they will likely be micro-managing their direct reports and creating a cloud of “make work” to prove their worth.

In some charts, there will be comparatively few people directly reporting to the CEO of the business.  The argument might go that the CEO doesn’t have enough time to manage many people.  However, by some miracle, lesser managers, equally time-strapped, are expected to manage many more direct reports!  Clearly, the guidance on Span of Control should start at the top if it is to have any legitimacy at all.

You can eliminate some positions by doubling them up.  For example, in a small organisation with a poor Span of Control over local sales, you could have the Sales Manager managing the rest of the sales staff and also being an active Sales Agent.  This doubling up of roles might be particularly useful within geographic locations where an existing functional Manager (say Sales) can also be the Location Manager.

Eliminate Layers of Management

Any large organization will have several layers of management.

Over time, some get more and more layers and become correspondingly less efficient because:

  • The additional layers have salary, and sometimes support staff, costs.
  • Adds one more layer of salary differentiation meaning all those above must have a higher salary to maintain salary separation.
  • They are one more communications roadblock filtering information from the grassroots to the top.
  • Increases number of managers to meddle with lower ranks.

Jack Welsh, of General Electric fame, wrote that GE in his day had only 6 layers between the top and bottom.

The Catholic Church does even better with 4 layers – Pope, Archbishop, Bishop and Parish Priest – and they "manage" some billions of “staff”/parishioners.

With careful attention to your Span of Control, some surplus layers may be capable of removal.

Other Profit Savvy Resources

The Peter Principal says that a percentage of any management system will be occupied by less competent people promoted above their competency.  There they will stay – frozen in time.  See Peter Principal article.

Parkinson’s Law says that “work will expand the time available”.  If you have too many managers, all trying to fill their day, you will have a lot of “make work” and micro managing as a consequence.  See Parkinson’s Law article.

Once you locate unnecessary management, you need a Redundancy Plan to move them on.  See our Redundancy Planning article for tips on how to do this.

Resources

For a typical Dilbert slant on layers of management see:
http://dilbert.com/search_results?terms=7+Layers+Of+Management.

Wikipedia

Organisational Chart - The organisation chart is a diagram showing graphically the relation of one official to another, or others, of a company.  It is also used to show the relation of one department to another, or others, or of one function of an organisation to another, or others.  This chart is valuable in that it enables you to visualise a complete organisation, by means of the picture it presents.

YouTube

How to Make an Organisational Chart - A basic how to video for making a quick organisational chart in Microsoft Word.

General link to various areas of Organisational Charts.

Refer to other articles on staffing from the Human Resources Menu.

 

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