Spans and Layers Insights
How many
employees do your supervisors manage?
Has your
organization considered the effects of what narrow or wide supervisory and
managerial spans of control mean for your employees and the levels of support
and empowerment they receive on-the-job?
Have you
considered how your decisions regarding the number of levels of reporting in
your organization and given to your supervisors and managers influence job
satisfaction, communication practices, and your overall organizational culture?
The structure
of your organization matters for these reasons and more.
Defining span
of control
Span of
control refers to the number of subordinates that can be managed effectively
and efficiently by supervisors or managers in an organization. Typically, it is
either narrow or wide resulting in a flatter or more hierarchical
organizational structure. Each type has its inherent advantages and
disadvantages.
Narrow Span
|
Advantages
|
Disadvantages
|
|
Have more
levels of reporting in the organization
|
Resulting
in a more hierarchical organization
|
|
Supervisors
can spend time with employees and supervise them more closely
|
More
supervisory involvement in work could lead to less empowerment and delegation
and more micromanagement
|
|
Creates more
development, growth, and advancement opportunities
|
More
expensive (high cost of management staff, office, etc.)
|
|
|
Tends to
result in communication difficulties and excessive distance between the top
and bottom levels in the organization
|
Wide Span
|
Advantages
|
Disadvantages
|
|
Have fewer
levels of reporting in the organization, resulting in a more flexible,
flatter organization
|
May lead to
overloaded supervisors if employees require much task direction, support, and
supervision
|
|
Ideal for
supervisors mainly responsible for answering questions and helping to solve
employees problems
|
May not
provide adequate support to employees leading to decreased morale or job
satisfaction
|
|
Encourages
empowerment of employees by giving more responsibility, delegation and
decision-making power to them
|
|
|
Tends to
result in greater communication efficiencies and frequent exposure to the top
level of the organization
|
|
|
|
|
Optimal span
of control
Three or four
levels of reporting typically
are sufficient for most organizations, while four to five are generally sufficient for all organizations
but the largest organizations (Hattrup, 1993). This is consistent with ERC’s
survey findings as well. Ideally in an organization, according to modern
organizational experts is approximately 15 to 20 subordinates per supervisor or
manager. However, some experts with a
more traditional focus believe that 5-6 subordinates per supervisor or manager
is ideal.
A common
prescription is that the ratio of spans to layers should be greater than one to
one — in other words, the organization should be flatter than it is tall.
Traditionally,
eight was viewed as the gold standard span to shoot for – no more, no less.
In general,
however, optimum span of control depends on various factors including:
Organization
size: The size of an organization is a great influencer. Larger organizations
tend to have wider spans of control than smaller organizations.
Nature of an
organization: The culture of an organization can influences; a more relaxed,
flexible culture is consistent with wider; while a hierarchical culture is
consistent with narrow. It is important to consider the current and desired
culture of the organization when determining.
Nature of
job: Routine and low complexity jobs/tasks require less supervision than jobs
that are inherently complicated, loosely defined and require frequent decision
making. Consider wider for jobs
requiring less supervision and narrower for more complex and vague jobs.
Skills and
competencies of manager: More
experienced supervisors or managers can generally be wider than less
experienced supervisors. It’s best to also consider to what degree supervisors
and managers are responsible for technical aspects of the job (non-managerial
duties).
Employees
skills and abilities: Less experienced employees require more training,
direction, and delegation (closer supervision, narrow); whereas more
experienced employees require less training, direction, and delegation (less
supervision, wider).
Type of
interaction between supervisors and employees: More frequent
interaction/supervision is characteristic of a narrower. Less interaction, such
as supervisors primarily just answering questions and helping solve employee
problems, is characteristic of a wider. The type of interaction you want your
supervisors and managers to engage in with their employees should be consistent
with the control they are given.
In addition,
special consideration should be given to the direct reports of executive and
senior management levels. Typically, the number of direct reports for these
individuals are lower than supervisors and managers as too many direct reports
at these levels can complicate communication and lengthen response time for
crucial decisions.
Understanding five managerial archetypes can help.
Throughout the 20th century, many organizations chased the notion
of finding and using one ideal universal “span of control” (SOC)—the magic
number of employees a manager could oversee to achieve optimal effectiveness
and efficiency. However, over decades of supporting the world’s leading
organizations in their redesign experiences, McKinsey has found that there is
no single magic number that fits all types of managers and the work that they
do. In fact, chasing one single number can actually reduce effectiveness.
Some practitioners have attempted to identify the “right” number
by industry or segment, using benchmark or peer comparison methods. Our
analytical evidence and experience indicate that while a peer-benchmark
approach may seem appealing, it often causes new problems, heavy handedly
applying structures that work for the strategy of other organizations. The
top-down assignment of managerial span of control, based on external comparisons,
misses the specificity critical to designing something that is right for each
company’s context and strategy. It doesn’t take into account how each
department and team should perform their work to accomplish their collective
performance and health goals.
McKinsey propose a new way to set target spans of control for our
clients, one that enables companies to build organizations that are “fit for
purpose” to their context and strategy. We have found that optimizing for
managerial span requires an understanding of the complexity and the nature of
the work done by both the manager and their direct reports. By studying
thousands of individual managerial jobs, we have categorized them into five
different archetypes that reflect the most typical types of managerial work:
player/coach, coach, supervisor, facilitator, and coordinator. By applying
these managerial archetypes to current manager roles, you can identify
opportunities to right size their spans of control, ultimately increasing the
effectiveness, efficiency, speed, and productivity of the entire organization.
The five managerial archetypes, basing the target number of direct
reports on the actual work done by a manager’s team produces the best outcome.
In doing this across hundreds of organizations McKinsey has identified five
managerial archetypes to guide the process: player/coach, coach, supervisor,
facilitator and coordinator. These archetypes cover spans ranging from three to
five to more than 15 direct reports per manager. McKinsey uses ranges to allow
for flexibility in strategy and execution, as we know that not every individual
in a given manager cohort will have the same managerial capabilities. Ranges
give room for managers both new to the role, who are still upskilling, as well
as for high-performing managers, who are at the top of their game.
Each role in an organization can be mapped to one of the five
managerial archetypes depending on four aspects of managerial complexity:
Time allocation. How much actual time is the manager spending on her
or his own work versus time spent managing others?
Process standardization. How standard and formally structured is
the work process?
Work variety. How similar or different is the work of individual
direct reports?
Team skills required. How much experience and training do team
members’ jobs require? How independent are the direct reports?
Player/coach
A player/coach has a significant level of individual
responsibility. There may not be guidelines or standardized processes in place
for this work. The teams conduct different types of work, and those work
activities are rarely repeatable. Self-sufficiency can be achieved only after
several years because work requires skills developed over an extensive
apprenticeship.
Example: Functional vice president
Such a role typically needs a great deal of experience in the
industry and business, and they bring their experience to bear. Strategy work,
by its nature, is unique and not repeated. Team members are apprenticed to the
leader, and build their expertise over a long period of time, which requires
the manager to provide constant guidance and apprenticeship. Other roles that
typically fall into this category include areas with expert knowledge or
skill—a consulting engagement manager falls squarely into this bracket.
The typical managerial
span for a player/coach is three to five direct reports.
Coach
A coach archetype has a substantial level of individual
responsibility and executional support from others. Process guidelines are in
place. Subordinates typically conduct more than one type of work. Additionally,
for a given type of work, coach activities are conducted differently.
Self-sufficiency can be obtained typically within a year because work requires
skills developed during a substantial apprenticeship in a structured way.
Example: Customer-analytics manager in a marketing group
The customer-analytics manager has a substantial level of
individual responsibility. While process guidelines may be in place for
standard analytics, this role will also be responsible for developing new
analytics based on best practices. Subordinates join with some level of
analytics background, but need support and apprenticeship to become familiar
with the business, the strategy, and the customers for this company to be
effective at their work.
The typical managerial
span for a coach is six to seven direct reports.
Supervisor
A supervisor archetype has a moderate level of individual
responsibility and has leadership from others for execution. A standard work
process exists. Direct reports conduct the same type of work but activities may
be conducted differently. Self-sufficiency can be achieved more quickly (for
example, within six months) because work requires skills developed through a
moderate apprenticeship in a standardized way.
Example 1: Accounting manager
Typically, the accounting manager will handle exceptional
situations, however standard company-wide processes and guidelines for
accounting already exist. Direct reports are typically all accountants who
manage the books but activities may differ by jurisdiction. Accountants come in
with basic training but need apprenticeship to understand the company-wide
processes and procedures that may be specific to their company.
Example 2: Senior vice president of finance
This is a senior leader in finance in a large organization who has
direct reports at the vice president level. He or she may do a large amount of
individual work and be responsible for situations where there are no clear
guidelines, while direct reports are typically also very senior and
independent. As a result, the archetype tends toward supervisor.
The typical managerial
span for a supervisor is eight to ten direct reports.
Facilitator
A facilitator archetype has limited responsibility for individual
delivery, with primary accountability for managing the day-to-day work of
others. Work is mostly standardized. Teams conduct the same type of work and
similar activities. Self-sufficiency can be achieved within one to two months
because skills can be acquired quickly or direct reports have the majority of
skills before starting the job.
Example: Accounts receivable and payable managers in a large
finance organization
There’s one clear process established for all activities, with adjustment
for some exceptions. All vendors follow the same process, and it is repeated at
a fixed time interval. The direct reports can be self-sufficient within a month
and the manager then has to handle only the exceptions.
The typical managerial
span for a facilitator is 11 to 15 direct reports.
Coordinator
A coordinator archetype spends nearly all of his or her time
managing day-to-day work. The work is highly standardized or automated. Direct
reports perform the same essential work and activities. Self-sufficiency can be
achieved in a couple of weeks because work requires few specific skills or
people have the skills before entering the role.
Example: A manager in a call center
A call-center manager typically handles only escalation calls; all
other calls are handled by the operators. The work, especially in billing call
centers, is very standardized, and people can start in a call center with only
a week or two of training.
The typical managerial
span for a coordinator is 15 or more direct reports.
Use managerial archetypes to drive efficiency and effectiveness
By better understanding the managerial archetypes in the
organization you can set specific guardrails for each managerial cohort. Using
rigorous analytics and evidence, targeted actions can be taken to either
streamline or increase the spans of control for each group.
By rightsizing your managerial spans of control, companies can
dramatically improve the productivity and speed of their organization. McKinsey
has seen that increasing spans of
control for managers with few direct reports (for example, replacing coaches
with facilitators) can eliminate subsize teams, helping to break down silos,
increase information flow, and reduce duplication of work. By increasing the span of control for
managers who could or should take on more, you can actually decrease the amount
of micromanagement in the organization, creating more autonomy, faster decision
making, and more professional development for team members. Correcting spans that are too narrow can
also reduce the total number of layers of an organization—decreasing the
distance from senior leaders to the front line and, in many cases, to their
customers. Typically, comprehensive
span exercises reducing at least one layer in an organization. Finally, by
rightsizing spans of control, you can free up resources to invest in higher
value activities. We typically see an opportunity to save between 10 to 15
percent of managerial costs by rightsizing spans and layers.
Historically, optimizing SOC has often been seen as primarily a
cost-management exercise. However, companies
can also use the opportunity to better structure their organizations,
increasing productivity and efficiency. Ultimately, smarter and more efficient
management will drive value.
In some cases, too-small
spans of control have proliferated because managerial designation has been
perceived as the only—or easiest—way to recognize and promote high performers.
In other cases, narrow spans occur
because an organization has been slow to invest in its systems or digital
enablement, requiring manual work—and human quality control—in places that
could be largely automated. Correcting spans without addressing the
underlying sources of inefficiency is, at a minimum, a short-term fix. It is important to set targets for managerial
work as it could get done but recognize understanding how it currently gets
done helps identify sustainable ways to correct spans for the long term.
Evolution of thinking on managers and management
As more of the workforce has moved from manufacturing and
production industries to service-driven and knowledge-based sectors, the
old-school notion of span of control has become increasingly challenged. Its
very concept is being rethought and reimagined to exist in a modern, digital
workforce, where people work remotely, globally, independently, and
collaboratively, while doing a wide variety of analytical and creative jobs.
The top-down autocracy where managers would give orders to get
work done is increasingly seen as a relic of another era. Today, managers are
expected to provide guidance, apprenticeship, and expertise. Instead of it
being about “control,” real leadership is more about managing through
empowerment to drive productivity in teams that is greater than the sum of
their parts. In agile organizations, where teams function as self-managed
units, collectively setting team goals and leading themselves to achieve those
goals without most of that leadership coming through the line manager, spans
can sometimes be much larger than those mentioned here, given the reduced need
for managerial oversight.
Ultimately, in increasingly competitive landscapes, where
consistent variability across the entire value chain can pose a risk to
productivity and profitability, adopting the right organizational structure can
help boost productivity via faster decisions, increased transparency and
improved communication. While organizational structure is just one lever of
change, the long-term impact is arguably the most profound, leaving your
organization well-positioned to achieve future goals.
Sources: Bain,
McKinsey, West Monroe Partners articles
