Jack is the kind of talent you want to promote. So you create a newlayer and make him a boss. You’re not really promoting him, but the org chart shows you are.
And so it goes, until you have more and more layers, and a smaller span of control for each manager. (Since new bosses often lack management experience, you limit the number of people reporting to managers like Jack.)
Avon leader Andrea Jung found herself in that position a few years ago. At the time, Avon had 15 organizational layers. And business was suffering.
The company was adding roughly 1,000 products annually, and heavily discounting its beauty products.
Her organization was too complex.
Here’s what’s wrong with excess layers:
• Slow decision-making. It just takes more work and time to get approvals, set up meetings, send all those e-mails and wait for responses. Streamlining cuts down on decision-making time.
• Fogged-up communications. Involving more people in resolving an issue means increasing your chances of getting off track, since everyone feels compelled to come up with his own unique input.
• Dangerous meddling. Managers with narrow spans of control simply have too much time on their hands, so they end up micromanaging.
What did Jung do to fix things?
She decreased management layers from 15 to seven, then restructured so she could direct the savings toward increased ad spending. She also eliminated 25% of the company’s products and increased sales reps’ compensation.
Her smart moves generated a 6% sales growth and put its stock back on a growth track.
— Adapted from What’s Holding You Back? Robert J. Herbold.