Having the correct structure will allow the organisation to perform at its peak whilst minimising costs.
The effective structure is determined by “Spans of Control” and layers within the organisation.
No magic number exists for all organisations or job types when it comes to setting targets for spans and layers. However, benchmarking against best-in-class companies helps get to the right goal. It is best to first understand the mix of employees and job types (skills-based versus task-based), set targets by function or business area and work top-down—but constantly check that in practice, targets are realistic and feasible.
Finding the right span-and-layer mix
Analysis shows that in an average company, a manager has a span of six to seven direct reports and the organisation has eight to nine layers between the top leadership and the frontline employee. Best-in-class companies in the database have average spans ranging between 10 and 15 direct reports and no more than seven layers. Of course, much depends on the type of job: “skills-based” jobs such as brand managers or engineers are usually well served with a span of six to eight, while “task-based” jobs such as shop-floor or call-centre supervisors have higher spans of 15 or more.
Bringing spans and layers back under control requires four steps:-
Duration: 4-6 weeks
Team: 1-2 people
Location: On-site or remote
• Clear communication strategy
• Organisational chart/diagram
• Current & optimum span-and-layer mix
• Opportunity quantification
• Implementation plan
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