We’re constantly being told that hierarchies are bad and we must flatten companies to make them more effective, but don’t companies need some layers in order to organize for success?
Don’t take another step—you’re right at the edge of the old “Come on, one more layer won’t hurt us” slippery slope that has tripped up more managers and companies than perhaps any other natural disaster. O.K., maybe “natural disaster,” is too strong a term, but the organizational compulsion to insert layers is just about as inexorable as, say, hurricane season every year. And it can be just as damaging. The only difference is that layers can be prevented. And they must be.
The reasons, as you suggest, should not be new to anyone. First of all, in a world where faster is not just better but necessary, layers slow everything down. Take decision-making. The more layers, the more people who have to thump their rubber stamp. The more PowerPoint presentations to be made to bosses and bosses’ bosses before the rubber stamp. Or take communicating change. Layers make that process—hard enough as it is—like that children’s whispering game, telephone. Every time a piece on information passes through a person, it morphs a little. Layers do that, too, adding spin, interpretation, and buzz with every telling. Or take getting a business going. Layers bury startups, particularly within large companies, under piles of bureaucrats and processes, depriving any entrepreneurial venture of the oxygen and sunlight it needs to thrive.
But perhaps the worse outcome of layers is meddling. When there are a lot of layers, it usually means managers have too few people reporting to them. Tom in Kansas City can have, basically, three sales reps he’s responsible for, or Maria in Toronto can be boss to two financial analysts and an administrative assistant. So what do Tom and Mary do with their massive underutilization? They end up babysitting their direct reports, or worse, doing their jobs for them. Talk about killing morale and initiative!
But not to harp on the all-too-familiar consequences of layers. Your job is to fight them, even if it is against your organization’s gravitational pull. After all, layers pop up because they seem necessary, especially with growth. “Uh-oh, we’ve got more sales,” people say, “We’ll need more district managers in the field.” Or, “More employees? Better add a few positions at headquarters.” Ironically, even when there isn’t growth, companies feel compelled to add layers. Often this form of layering masquerades as promotions, as in, “Look, people are still moving up around here!” To be sure, such promotions don’t have raises attached—but they’re better than nothing. Wrong.
So what is right when it comes to layers? You’ll know you’re there if you’re, well, uncomfortable. That is, you’ve probably gotten to the right level of layers if your company is 50% flatter than you’d like. Managers should have eight direct reports at the minimum and up to a dozen if they’re experienced. CEOs should have more. Indeed, the higher you are in an organization, the more direct reports you should have. After all, senior people should be good enough to operate without their boss’s constant glare. That’s why they’re senior.
Look, we’re not saying this is the end of the world. We’re just saying you should think of every layer as a bad layer. And like a hurricane, if you see one coming your way, batten down the hatches. Better yet, escape to higher ground and let the danger pass you by.
This question and answer originally appeared in Business Week magazine on June 25, 2007.
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