Spans and layers for the modern organization

Conducting a spans and layers analysis

Managing spans of control and organizational layers has always been a hot issue during organization design. But how do you determine the right number of spans and layers for your organization? To ensure your organizational efficiency and effectiveness, a formal spans and layers analysis is often a worthwhile solution. Some typical drivers for analysis include improving communications, limiting grade inflation and title proliferation, increasing productivity, speeding up decision-making, becoming more flexible and innovative, and reducing costs.

Effectively and sustainably delayering an organization

Some organizations use delayering as a quick span of control management tool to address common issues such as uncompetitive operational costs and slow organizational responsiveness. But delayering, as a stand-alone event, is unlikely to bring sustainable business value. To establish a successful delayering exercise, we believe there are 10 critical elements that an organization must consider:

1. Position delayering as part of a larger organizational change effort, rather than a stand-alone initiative
2. Establish a burning platform—and be disciplined in execution
3. Ensure that the CEO is on board and fully committed to boldly examine all areas (no sacred cows)
4. Be transparent and honest in communications to the organization
5. Set up a knowledgeable working group that includes business leaders, HR, and subject-matter experts to drive the process
6. Establish strong guiding principles that will enable consistency and fairness in the process
7. Be aware of the high emotional impact on everyone involved and develop a mitigation plan
8. Delayer from the top, not the bottom
9. Realign people management processes during the diagnosis phase rather than reactively after restructuring (including changes to total rewards, performance metrics, promotions, and skill development)
10. Include a proactive design component in the organization structure to prevent unnecessary alterations to the spans and layers

The bottom line

There are only two ways to delayer an organization: Shrink the organization so that, with a given span, the hierarchy will have fewer layers as the number of members in the organization contracts. Or keep the same number of members but increase spans of control. When implemented successfully, delayering and managing span of control can lead to better collaboration, productivity, and overall business outcomes.