span of control with orgvue
A practical way to improve organizational effectiveness and reduce operating costs – if you can get the number right.
What is the ideal span of control?
This is one of the most often asked questions by organizations wanting to know if they have the right number of people doing the right activities to deliver the business strategy. While there’s no ideal number, there is a way to work out what’s best for your organization to improve productivity and save costs.
Management consultants say you should have no more than eight layers and no fewer than eight direct reports. But this view doesn’t account for the varying nature of work, complexity, company size, and industry that organizations are subject to.
Increase span of control to reduce cost
One truth that persists is that increasing span of control reduces the number of managers and layers in the organization, with the effect of higher efficiency and reduced cost. But this delayering is often done without considering the skills and capabilities that could be lost in the process.
The big question is how can you improve your span of control in an informed, data-driven way without losing valuable human capital?
Working out your span of control
A framework that organizations can use to calculate the optimal span of control uses the following three factors to determine what the ratio should be:
Nature of subordinates
- Capability of workers. The more capable the worker, the less supervision they’ll need
- Degree of repeatability of tasks. It’s easier to manage more people performing similar tasks, because management can be process driven.
- Motivation, judgement, and maturity. Less supervision is needed if workers are self-starters and know when to escalate. Allowing people to work autonomously also brings trust.
Nature of managers
- Capability of managers. The more capable and experienced managers are, the more likely they’ll be able to handle a larger span of control.
- Trust and relationships. The more workers trust their managers and the stronger the relationship between managers and workers, the less supervision will be needed.
Context of the organization
- Geographical dispersion. The more dispersed an organization is, the harder it is to supervise.
- Training and development. Does the manager need to provide detailed training and guidance (more junior workers) and or direction only (more senior workers)?
- Culture. The more democratic the culture, the lower the span of control can be.
- Administrative management. How much administration is created by development plans, policy briefings, and managing objectives?
- Amount of change. The greater the level of changes, the lower the span of control.
how orgvue helps
You can use these drivers to group subordinates together for each manager role using OrgVue to visualize the changes. With OrgVue, it’s easy to see which teams or departments would benefit from a higher or lower span of control. You can then use the organizational context to decide whether a span of control as high as 15 or as low as 3 would be appropriate.
By determining span of control in this way, any cost savings you make will have been achieved in a sustainable, long lasting way. If you delayer based on formulaic numbers, it’s likely to cost you more in the long run.
sustainable cost control ebook
Get 3 case studies from retail, FMCG and finance that showcases:
- Achieving $50 million in cost savings
- Enhancing data quality from 60% to 95%
- Reviewing work worth $5 billion
- Consolidating data for 250,000 employees in weeks
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