HBR.org
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This article originally appeared in HBR.org. You can have terrific people working in the right teams and still not see the financial results you’re hoping for. Why? It could be that your organization’s structure is creating obstacles that compromise your workforce’s performance. One common culprit is out-of-control tooth-to-tail ratios. In a war zone, some soldiers fight on the front lines. Others maintain supply chains, handle logistics, and otherwise support those front-line troops. Military commanders know they can’t let the tooth-to-tail (or combat-to-support) ratio get too low, or they’ll wind up with a force that costs too much and can’t win the battle. It’s the same in a company. You have front-line employees who create what you sell or who deal directly with customers: software developers, sales reps, call-center staffers, and so on. You also have support staff, including the people in marketing, finance, HR, and other functions. When the tooth-to-tail ratio gets too low, front-line people find that they have to send every customer request or idea for improvement up through the bureaucracy and wait days or weeks for a response. That not only creates long delays for customers; it also makes front-line employees feel disempowered and demoralized. How can they serve the customer when they’re burdened with so much bureaucracy? A second likely culprit: too many supervisory layers. Unnecessary supervisors create work and don’t increase efficiency, thus lowering an organization’s productivity. And companies often underestimate how expensive all those supervisors really are. Not long ago my colleagues and I studied the cost of adding a manager or executive, and we found a kind of multiplier effect. When you hire a manager, he or she typically generates enough work to keep somebody else busy as well. Senior executives — SVPs and EVPs — are even more costly. These high-priced folks typically require support from a caravan of assistants and/or chiefs of staff. The support staff generates a lot more work for other people, too. The extra burden comes to 4.2 FTEs per hire, including the executive’s own time. We’ve found three steps to be helpful in liberating your people from the organizational mire:
Some companies have begun to attack these organizational barriers. A large software company we worked with recently eliminated more than 40% of its supervisors, ensuring that the people who actually develop the product aren’t overburdened with managers and other functionaries. When Alan Mulally first became CEO of Ford, he did away with the CEO’s chief of staff position. It was a double-barreled message on Mulally’s part: not only wouldn’t he have a chief of staff; he wouldn’t have a staff at all. His decision precipitated similar moves elsewhere in the organization; no EVP wanted to have a chief of staff when the CEO didn’t. Chances are that your top performers want to live up to their full potential. Don’t let organizational obstacles get in their way. |