What do people care more about: Where the box is and what is in the box?
My assertion is when doing Org Design, the majority of the time people obsess with where the box sits relative to the CEO. As if distance from the CEO is the sole definition of power, grade or potential salary. For instance, if the CEO has a “Power” of 100, then ones roles power is 100/[(Distance from CEO)^2]. E.g. if the role is at a depth of 3, the 100/(3^2) = 11.1. This depth can be seen in the below charts. In the classic bar graph you can see the Power by depth or see the same data as the size of circle within the hierarchy. :
Perception of Power:
So those, by definition at the bottom are powerless, regardless of anything else?
This militarily driven concept of power doesn’t hold water in the vast majority of instances, and probably not in the military either. The only thing this model of power has going for it is its (dumb) simplicity.
Related to this world view is power is the Span of Control and the number of reports below the role. In that model, the Power in the Org Chart above would look like the set of circles. In this mock organisation, two roles within the hierarchy don’t have any direct reports, and one has 3. This repeats all the way down 8 levels (a depth of 9). The CEO has the most Power, with 24 reports and the CXO has 21 reports etc.
So, what does count then? Well, for so many obvious reasons, examples include:
- The importance of the objectives and the impact of achieving them
- The impact of getting something wrong?
- Strength of relationships, ability to influence others and wisdom
- Strategic importance of the competencies
- Level of performance and competence
In managing a high-growth company of now c90 people, one thing that used to amaze me was how I didn’t want some of my best people to have a team to manage at all (so no Span of Control or number of reports). The “amazing” thing, but totally logical in hindsight, is that a) not everyone is good at managing, b) many technical or sales roles suffer from the burden of management and c) by not having a team, the influence of those individuals is not diminished in the slightest.
You could imagine the profile of these 25 roles to be split according across two dimensions (e.g. importance of objectives and strength of relationships) in a profile like (using the pivot view from OrgVue you can place all employees on a grid, and drag & drop between dimensions):
If the columns are Dimension A, with a score of 1,5,15, 45 for a,b,c,d respectively
If the rows are Dimension B, with a score of 1,3,9,27
And if we would take the Span of control & number of reports number already defined
Then we would get a picture like the one below:
This graph shows the reporting lines. The colour & size of circle show the relative importance of the role – which could be translated into the grade or salary. This is clearly all mock data to illustrate the point and the thinking process.
See how much more organic this looks – far more like a system of people. Some the lower down the hierarchy role are larger circles than those quite high up. Think of a junior developer working on a mission critical component to a core product with a huge usability impact or a Sargent Major of a key infantry platoon that needs to hold a strategic bridge or that team lead who manages a key part of a complex manufacturing line or the quality control engineer on an oil rig or…. The list goes on and on. In fact, the more one thinks of real life examples, the more one realises that it is what is in the box that counts, what the role is, and not just where it sits on an old fashioned organisation chart.