Managing the Number of Managers
Michael C. Mankins writes on HBR’s site that a VP makes work for two other people. By implication, the cost of hiring a manager at that level is not just that person’s employment costs but those of the two others as well. Mankins’ graph shows this interesting relationship all the way up the org chart. But it’s a slightly odd point of view, since it implies managers themselves (rather than poor management) are inherently the cause of inefficiency. An organization doesn’t hire managers to create value, but because there is or could be value being created if only there was someone to manage the process. A better way to think about it is that you should hire a VP if you spot a place in your organization where there are two or more people running around loose instead of creating value.
The point of Mankins’ article is beyond criticism: manage your human resources to minimize overhead and maximize productivity – you need to keep an eye on the number of managers versus the number of people actually producing and selling your product. There’s no formula for the manager to employee ratio, it depends on the industry and the kind of work being done. Opinions about the maximum effective span of control are all over the map. Terry Weaver, CEO of the Chief Executive Boards International believes “Few, if any, managers can manage ten people — let alone more”. On the other hand there are those who argue that the larger numbers are attainable owing to the virtualization of teams through technology. The late Michael Hammer (author of Reengineering the Corporation) believe you can go as high as a hundred. If management involves actually knowing and relating to your employees it’s hard to see how the job could be done for such a large fraction of Dunbar’s number. In my own experience, managing professionals and technicians on highly non-repetitive development projects, I’m more inclined to Mr. Weaver’s view; but perhaps there are circumstances where the efficiencies of a flat structure overcome the limitations that Hammer disregards. Vice presidential chickens or just expensive eggs, managers need to be thoughtfully hired and deployed.
In IT the drive to minimize management overhead finds expression in widespread enthusiasm for Agile techniques. These purport to make the development of computer systems and software more efficient through self-managed teams. The focus is on productive activity and seeks to eliminate everything that doesn’t actually create value, like writing manuals and specifications that no one reads and that are out-of-date as soon as they’re completed. The engineers who advocate for Agile are prone to equate working software with a business solution, blaming the users for any failure to find the value in the new system. Reducing managers is good; but babies, bathwater. A good engineer provides an elegant solution; a good manager applies, refines, supports and advocates for it, until it’s lodged in the organization and delivering the originally envisioned value. If you don’t see the difference, ask your manager.
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