As organizations grow they fear becoming “bureaucracies”. The idea of adding a layer to an organizational wire diagram seems to have become the catch all excuse for inefficiency. Once the inefficiency sets in because of the “bureaucracy” that has formed through growth, the finger pointing, excuse making, lack of communication, and dictatorial behaviors take root. Please take note, growth doesn’t create bureaucracies, poor leadership does.
It has been argued that bureaucracies are necessary because of their systematic processes and organized hierarchies which maintain order and maximize efficiency. It has also been argued they threaten initiative and autonomy in the individual. Both sides of the argument are true.
Like it or not, when an organization grows it needs to create layers of leadership. Studies on leadership have shown that an individual leader can only effectively lead around ten direct reports at a time. My experience tells me this is a pretty accurate number, give or take a few. Either way, whether the number is ten or twenty, the fact remains that the more people someone is directly in charge of the more difficult it becomes to lead effectively. So, to mitigate this, an extra tier of leadership needs to be created.
Let’s take a basic example. A manager, Phil, has fifteen direct reports. The company grows, and Phil’s direct reports eventually increase to twenty-four. For the sake of efficiency, the organization restructures, Phil is promoted, and now he has two direct reports, both of whom manage the remaining twenty-two employees split evenly at eleven a piece. The problem this creates in efficiency is not the fact that an extra tier of leadership has been created. It’s the fact that Phil continues to manage the twenty-four people under his purview the way he did before his promotion.
In this example, Phil has failed to realize that while he has twenty-four people under his direction, he now has only two direct reports. Phil must now allow his two direct reports to lead each one of their teams of eleven. As the overall leader, Phil needs to set the direction and objectives for his team. However, he then needs to delegate the responsibility for how his team will accomplish his stated objectives to his two direct reports.
As the company grows, it continues to tier, and Phil continues to lead the same way he did in the beginning of this example, as a manager with fifteen direct reports. He changes the plans of his two direct reports constantly because he is still focused on doing their job, not his job. This is where the individual’s freedom and autonomy are stripped. Not because there was growth and a new layer of leadership added, but because Phil hasn’t adjusted to who his direct reports are as the company grows. Phil’s subordinates are not allowed to make their own decisions and initiative disappears because Phil still acts like he is an entry level manager. What’s worse, everyone under Phil’s command begins to emulate his leadership style.
The result is an inefficient, hierarchical, dictatorial bureaucracy that stifles people’s initiative and autonomy. The problem, though, is that the blame is put on “bureaucracy”. Everyone looks around at each other shocked at what their beloved organization has become. Then they shrug their shoulders and chalk it all up to the perils of growth in organizations…and they carry on with business as usual.
In reality, “Phil” is the problem. And “Phil” is everywhere. “Phil” keeps the decision making centralized to himself. That’s it folks, that’s how it happens. If “Phil” simply let his direct reports decide themselves how they were going to accomplish his directives, and then demanded that of his subordinates, growth and bureaucracy would not be the go to excuse they are today for inefficiency and low morale. In short, bureaucracies keep their decision making centralized…because of “Phil”.
Leaders de-centralize the decision-making process and create an environment of autonomy and initiative which will thrive in spite of growth and multiple tiers of leadership in the organizational chart. And guess what? It’s really hard to do. Welcome to leadership!
Errol Doebler is the founder of Ice Cold Leader, a leadership consulting firm. After successful careers as a Navy SEAL Platoon Commander and FBI Special Agent, Errol founded Ice Cold Leader to realize his passion of empowering great leaders and better human beings. Errol provides executive coaching, keynote speaking, and corporate retreats to individuals and teams across the world.