Restructuring the spans and layers of management control within a company is one of the most effective tools for addressing organizational bloat. This lever reduces organizational layers and management overhead, which not only cuts costs, but also simplifies decision making, improves flexibility, enhances responsiveness, and unleashes innovation—positioning the company for better growth.
What Is a Spans and Layers Restructuring?
Restructuring spans and layers optimizes two critical aspects of organizational structure: the spans of control (the number of direct reports for each managerial position) and management layers (the number of hierarchical levels that distance the front line from the CEO). A spans and layers analysis enables a company to identify and eliminate narrow spans and excessive layers.
In our experience, even the best-run companies tend to lose focus on their organizational structure over time, at least in some businesses or functions, and end up with too many layers and too much management overhead. This may result from poorly integrated acquisitions, unregulated growth, or simple inattention. Unless periodically reviewed and adjusted, unwieldy organizational structures burden a company with high management costs and stultifying bureaucracy. Excess management layers with narrow spans of control slow down decision making, delay the flow of information from the top to the front lines (and vice versa), stifle ...