The news gets a little cloudy now and then, but most of the oracles
and experts claim that the economic recovery is under way, even if
we aren't feeling it quite yet in our paychecks and 401k
statements. But as corporations begin to move out of the doldrums,
they might not be ready to fall back into their old patterns,
especially when it comes to the depth of their workforces.
A new study from the Institute for Corporate Productivity (i4cp)
suggests that if leaders are feeling a bit stressed now, it isn't
going to get much better in the future. The study, "Organizational
Structure and Spans of Control," asked respondents questions about
the average number of management layers from their frontlines to
the CEO and about the average number of direct reports in
organizations at the vice president, director, and manager levels.
The survey also sought information on changes in spans of control
from five years previous as well as future plans to widen or narrow
The changes may become the new reality, suggests David Wentworth,
senior research analyst at i4cp. "And not just in spans and layers,
but in the workforce in general," says Wentworth. "Companies are
finding what they can make do with. Many companies have been
stripped down to their core, and that has brought about a
philosophical change to a lot of organizations, and it will affect
how they will go forward. As things turn around, you will probably
see that organization charts are fluid things, and they probably
should be. I definitely think, however, that we have reached some
sort of baseline, and companies are recognizing what they need to
operate and that they will need a real good reason to change it."
The member-requested study reveals little difference between
high-performing organizations and low-performing ones. Most
companies are responding to the realities of the economy and won't
see a competitive advantage from flattening their structure.
"Still, the shift represents a matter of competitive necessity and,
in many cases, survival," suggests a release from i4cp.
"Like a lot of our research, it was member driven," explains
Wentworth. "This is a topic that is on the minds of a lot of
corporations, and that many probably struggle with. We thought this
would be a good area to create benchmarking data that could be
shared with our members. We undertook this to answer a question
from one of our members, an energy and utility company. We wanted
to be able to answer their questions, as well as generalize a bit
so we could be able to address a broader range of companies."
What can the CLO expect?
Wentworth says the finding represented in the i4cp study might come
at the learning organization in many companies in a variety of
ways. "These changes affect everyone, and just the fact that
outside the role of a CLO as a manager, this represents a
flattening of the organization in general," he explains. "On the
learning side this represents the need to create agendas that help
managers cope with the flattening of the organization.
"The idea is that you, as a manager, now have more direct reports
relying on you. How do you handle that without spreading yourself
too thin? And how will you deal with changes that come about from
the flattening of the organization chart? A manager or executive
may be moved up a layer, so while that doesn't necessarily
represent training, it does present development opportunities as
far as managing wider spans. The spans keep getting wider. For
years organizations have been told that flatter is better as you
move people closer to the decision makers and shorten the distance
between the top and the bottom of the organization."
According to the study, leaders at all levels are dealing with
larger teams than five years ago, and many companies expect the
number of reporting employees to increase in the future. More than
35 percent of managers in large companies already have 11 to 25
employees reporting to them, and 75 percent of companies expect
those numbers to rise or remain the same in the future. "Companies
looking to further flatten their organizational structures need to
weigh efficiency and agility gains against disengagement and
burnout among middle managers - or all managers, for that matter,"
Middle managers are often the hardest hit since expanding spans of
control at multiple levels of the organization exponentially
enlarges the number of people they are both directly and indirectly
accountable for managing.