Ever wonder what management does, or should do?
Why have all these layers in an organization? Is it simply to create span of control? That is, a manager can only have so many direct reports before we need another manager.
What about all the layers; Manager, General Manager, Vice President, Executive Vice President, CEO, Board? What do they do?
Why do people aspire to move up the management ranks? Is it power, prestige, to make more money? Or is it to make a difference, lead the organization forward, building a better workplace?
There is a large amount of research that has gone into answering these questions. For example;
Elliot Jaques’ Stratified Systems Theory explains that to have a Requisite (natural) Organization, the layers are based on the capability of thinking required at each level. This capability must handle ever increasing complexity, that spans across greater time frames as we move from the front line staff up to the CEO and Board.
Source: Dr Louis J Fick
Stafford Beer’s Viable Systems Model describes the reoccurring five systems that naturally operate in all organisations, whether we are aware of them or not. These reoccurring set of five systems are nested in a holarchy structure where each ascending level has a broader mission and includes the level below.
Source: Stafford Beer, Nationalized Industries in Chile early ‘70s
There are two problems when we try to conceptualize these and similar concepts.
The first is what does; ever increasing complexity levels, greater time spans and nested holarchy structures mean in every day life.
The second is, do we care? Don’t we all just want to get to the top of the pile, make more money and have a better life?
In today’s society we are conditioned to believe that “up” is better. This is why we have a proliferation of fancy titles. We don’t just have a president of an organization we have vice presidents, senior vice presidents, executive vice presidents and you can add an assistant or deputy in front of any of those such as, a deputy senior vice president.
To help us grasp these concepts, and to think about what we really want to be when we grow up, let’s use the analogy of getting from point A to point B on a river in a raft.
In the picture above we have our front line staff all paddling away. They are concentrating on the water immediately in front of them, watching for rocks and dips to navigate through. Their perspective is a short time frame, they have their heads down, tails up and enjoying the thrills of the journey.
The team leader is in the back of the raft. His perspective is longer than the paddlers, he is scanning the river further ahead to see what course they should take. Should they pass down the left side of the upcoming rock formation or the right? From previous experience he decides on the right, it is safer and smoother. He is also making sure the paddlers know what to do and are keeping the raft in the right direction and as level as possible. Sometimes he wants to do the paddling for them but he can’t, there would be no one left to steer the raft. He needs to train the paddlers so they do their job. All their lives depend on it.
Watching over the rafts as they head down the river is the expedition leader. Her perspective is the end to end journey. Having plotted the course from point A to point B she is now monitoring the weather patterns. Are there clouds coming in over the mountains ahead? What impact will that have on the crews? Do her team leaders know how to handle changing conditions and not just river navigation? Do they have the right equipment the right crew? What systems and processes need to be in place to ensure the safe arrival at point B.
Recently there have been requests from the paddlers for different, more effective paddles. The expedition leader has empowered the paddlers and team leaders to select and test the ones they believe will perform better. After all they are in the best position to tell which ones they should use, not someone standing on the river bank.
River Transport Manager
The River Transport Manager is receiving reports on how the various expeditions are doing. He monitors the performance across the expeditions over a number of river journeys. From his broader perspective he can see which teams are improving, not only in journey times, but also for safety and paddler satisfaction. Learnings can be shared across the expeditions to improve the river transport operation as a whole. For example, one of his expedition leaders has provided more empowerment, with accountability, to her crews and they are consistently improving their results.
One worrying piece of feedback has been the observation of civil engineers surveying stretches of the river. This could possibly mean the state government is testing out the potential to build a dam. He thinks that he had better send that information up stairs.
The CEO has been thinking about whether using rafts down the river is the best transportation system for her company long term. The crews have definitely seen more variability in the water levels, both flooding and drought. Could that be due to slowly increasing affects of climate change? She was alerted by the news of surveyors and civil engineers working along the river bank and organized a meeting with the Governor. The government’s longer term plans were not for a dam. But she could understand how her crews came to that conclusion as their perspective was focused on the river. Instead the government was conducting feasibility studies into a possible road or rail link between point A and point B.
The response from the CEO reflected not only her longer term thinking, such as questioning continuing to use the river, but also the fact that her company’s mission statement, “to be the best transport operator between point A and point B”, was embedded in everything they did. Luckily it wasn’t, “to be the best raft operator”.
Looking into the future, and being forewarned of the government plans, her leadership guided the company into a Public Private Partnership, made up of a consortium of rail link builders and operators, while leveraging her company's logistic operations at points A and B.
The river raft operations were sold off to an adventure tours company and now the team leader takes the left hand side of the rock formation because the mission statement is to create fun and adventure for its clients. Of course a new, appropriate, set of safety procedures are put in place.
Is this how your organization works? All the layers of management operating across the appropriate timeframe, providing support and guidance for the levels below?
Or is everyone trying to jump into the raft and do the paddling? Yelling from the riverbank to go faster!
Problems occur when organizations lose their Vertical Leverage, through management collapsing down on to the roles below. Instead of being a help, management becomes a hindrance. Instead of enabling leadership, the layers of an organization create bureaucracy.
When the layers stop providing leadership the organization loses its way. It becomes vulnerable to disruption like a new way of getting from point A to point B. It sees change as a threat and not an opportunity.
Not, how can we cut the costs of paddlers to compete with a the new rail link we didn't see coming?
But, how can we achieve a better outcome of our mission with long term planning, and what are the big decisions we will have to make?
A common, and often absurdly comical, example of the collapse of Vertical Leverage is the “one size fits all” approach of global organizations. This is where the EVPs, SVPs and VPs all get together and decide what is best for the world.
The root cause of the “one size fits all” approach is that the amount of complexity in the world is immense. If you cannot conceptualize that amount of complexity in your head, the solution is to dumb it down until you can. That is, to ignore all variables and say that one size does fit all.
The end result is a mismatch between what we are told to do versus being given the ownership to manage to the local conditions.
One Size Never Fits All
Hopefully our rafting analogy has helped explain why we need layers of management within an organization. That as we move up the levels, the roles require an increasing longer term perspective, which brings with it greater complexity, for which we need the capability to conceptualize that complexity in our heads. If our managers don’t have this capability they collapse down to the layers that match their level of capability. This explains why we hear so often that the world lacks leadership.
The question for ourselves is what role do we want?
Being a successful CEO is hard. It isn’t just about hard work and more pay. It is naturally being drawn to operating in longer time frames. It is having the capability to handle the complexity the role demands.
For many of us, the most fun is in the raft, enjoying the thrills and spills of the white water. Or it could be somewhere in between, the Expedition Leader or River Transport Manager?
If we do want to move up in the organization it should be to make a difference, provide leadership, create a better workplace. If it is for the prestige, power and more pay then probably we are the wrong person and life will not be as fulfilling as we expect.
Just remember “up” is not always better for us.