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Decades of experience have taught us that even the most experienced project manager, leader, CEO or company president can only effectively lead a breadth of three to seven subordinate divisions and ideally the number is five.
That same experience has also taught us that a leader becomes detached if the organization they oversee grows greater than five to seven layers deep with, again, the ideal number being five for efficacy.
But why does this occur? Why should your organization be no more divisions wide under any one leader than the number of fingers on their hand and no more layers deep in that organization than the number of toes on one foot?
The answer in part lies in the functioning of the human brain. Immediate memory, that portion of the brain capable of receiving information almost instantaneously, less than .037 milliseconds, and maintaining it until it can be written into permanent memory is only seven blocks wide; this is why your telephone number (excluding the area code) is seven digits long.
However, just like a telephone number, by grouping batches of numbers your brain treats each group of numbers as one block. The area code becomes one block of information rather than three discreet numbers. The prefix, another group of three numbers, is again considered a single block of digits. Hence a ten-digit telephone number is now treated by the brain as only six blocks of information—the area code, the prefix and each of the last four individual digits. Similarly your Social Security number is divided into the same sequence—three-digit prefix, a two-digit place code and the terminal four digits.
Span of control pays attention to this same basic brain limitation. You can most effectively pay attention to five simultaneous branches within your chain of command without becoming distracted because you have two “available” blocks of memory in which to store “distractions.”
Depth in any one branch works the same way. When you must pay attention to one branch with any degree of specificity, your brain turns your memory “sideways” and looks at the depth in blocks of information. Limiting depth to 5 layers leaves two “available” blocks for “distractions” or to share among the other branches of your organization.
But how does this impact actual management?
Taking these decades of experience from the disaster field office and combining them with the neurophysiologic knowledge of how the human brain works, we discovered that in any organization, the organization must be subdivided when the number of first-level subordinates exceeds five. Therefore, if a CEO must run four divisions of a single company, he can do so with four vice-presidents, but when that number exceeds seven, the company must be in some fashion broken up, grouping each of those greater divisions under individual presidents who then report to the CEO. Thus the company becomes one layer deper, but the CEO has only 2 divisions under his span of control (each with a president).
Similarly, imagine we now have one CEO with two presidents, but the organization becomes greater than seven layers deep with the seventh layer being the customers. The CEO is in danger of losing touch with those customers. In this circumstance, a new division in the company reporting directly to the CEO can be established that provides for information to be disseminated directly by the CEO to customers and feedback directly from customers back to CEO.
A fine example of this is seen in Zales Corporation. Zales Corporation operates multiple divisions under multiple jewelry sales brands. Each of these brands is grouped according to their market. Thus, they grouped brands with each group led by a senior vice-president. The corporate president oversees senior vice-presidents and thus their groups and brands. The problems for Zales Corporation came when in their corporate C suite, became embroiled in a personnel problem. This highly publicized personnel problem impeded the ability of the higher echelon of leadership to exert their span of control and required that a lower level of leadership assume a dual role.
Dual roles are death!
Worse, the individuals in duel roles supervised the same people, creating two parallel chains of command. The company and its employees were literally shackled by conflicting instructions and expectations. In the disaster field office we know that when needs exceed resources it is a disaster, but when needs exceed all ability to respond it is a catastrophe. Zales became a wounded dog because management issues (needs) exceeded their ability to respond. Investors responded to the catastrophe and stock prices fell.
Span of control dictates that one person fills one role and that even like organizations not be combined, but that if one leader must supervise two separate divisions or organizations, that that leader do so through a subordinate to whom those organizations individually report. In the disaster field office we call this “Unity of Command” and it ensures that each individual in the chain of command knows precisely what singular individual to whom they report and from whom they take direct instruction. With this unity of command and span of control principles in place, management issues cease to be a choke point.
Zales ceased to be a wounded dog when they corrected their C suite personnel problems, reestablishing a unity of command and a manageable span of control. Investors rewarded them with a two-fold increase in stock price in two months.
(Excerpted from my seminar series and book, Wounded Dogs: Avoiding Business Disasters – Lessons Learned in the Disaster Field Office)
