Tag Archives: organizational layers

How Many Organizational Layers?

From the Ask Tom mailbag –

Question:
When you talk about context, organizational context, I assume you mean organizational structure. We have team members and supervisors, managers and executive managers. How many layers should we have? Is it best to have fewer layers, a flat organization or more layers?

Response:
As any good consultant knows, it depends. First, an organization should have no more organizational layers than is necessary, so, it depends on what is necessary. And what is necessary depends on the complexity of the problems to be solved and the decisions to be made to effectively deliver the product or service to the customer.

I watch organizations blow up into morbid obesity because they have no framework on which to base that decision – how many layers? And, who should be who’s manager? How many team members can a manager manage? What do we expect from this manager vs that manager?

Timespan.
What is the timespan of the decisions to be made and the problems to be solved? Think about this pattern –

  • 1 day to 3 months – Level I
  • 3 months to 12 months – Level II
  • 12 months to 24 months – Level III
  • 2 years to 5 years – Level IV
  • 5 years to 10 years – Level V

That’s how many layers you need, and only as many as you need. But, now you have a framework in which to make that decision.

Most entrepreneurs stay within the first two levels, with goals and objectives that rarely extend beyond 12 months. Those with aspirations for larger organizations, with higher revenues, more market clout, have to consider the impact of decisions and problems that extend two years and beyond.

There is a subtle seduction that occurs, however. Any entrepreneur with the intent to take their company to the next level, must first achieve mastery at their current level while sowing the seeds of problems for the next level.