The Various Levels of Management: When to ‘Delayer’

While the majority of businesses find themselves with the right amount of layers of management, almost a third have either “delayered” or likely will in the future.

Besides being one of the latest business buzzwords, “delayering” (reducing the layers of management) seems just right for some organizations.

Seventy percent of senior executives and managers overall say their organization has the right amount of layers, based on a global survey by NFI Research. However, there is a significant difference based on company size.

A third of large companies have too many layers of management, based on the survey, and more than half of them either have delayered or plan to.

“The most positive trend I’ve seen is the current move to delayer,” said one survey respondent. “Too many levels of management stifle creativity and slow down the decision-making process. In today’s world, a CEO needs to be able to communicate with all levels of an organization with speed and candor.”

As market and business conditions evolve, some companies find they have to modify their management layers more than once.

“My area has been delayered, then relayered in the past two years,” said one manager. “At the very top (executive vice president level), layers were added. The next group (senior vice president and down) continually delayered. With boomers retiring, it should be interesting in the next few years.”

A relatively small percentage of executives and managers see their organizations as having not enough layers of management, for various reasons.

“Because of our growth, we’ve recently added a layer of management in some areas,” said one respondent. “We had too many reports for some managers. They were spread too thin and couldn’t be productive. Additionally, their reporting departments could not be as productive as they needed without more time from their management.”

Said another: “My organization recently added a layer, moving from three layers (president, managers and staff) to four (president, executive managers, supervisors and staff). The change was beneficial, as our management meetings were too large to do any effective problem solving or strategic thinking. As we’ve grown, we have made a concerted effort to minimize the number of layers, and it has resulted in a structure that doesn’t interfere with our purpose.”

With fewer layers of management, there are some clear potential benefits, such as management being closer to the customer and more streamlined execution.

“The fewer the layers the better,” said one manager. “You, the customer and the boss communicate much more clearly when it’s voice to voice and face to face. Filters are only good for keeping the lint off the clothes.”

“Our greatest need for reducing management layers is in managing projects,” said another. “The more layers of management a project has, the greater number of human interfaces are created, which results in greater complexity and unnecessarily puts project delivery at risk. This is a common occurrence in functionally organized project management structures, and is less prevalent in matrix project structures, but the latter require stronger project management leadership to be effective.”

The true key in delayering is to make sure the layers that are ultimately in place value the people within them and are effective at letting customers easily navigate through those layers.