How to structure your organisation – Napoleon had a few clues!
Andrew O’Keeffe ©2017
Napoleon Bonaparte knew a thing or two about organisational structure. After a coup in 1799 in which he was the major force, he structured the French government so he had a line of sight to seven functions: army, navy, finance, police, justice, home affairs and government.
Seven direct reports to a senior leader is the magic number for design. It provides the ideal “line of sight” and the voices at the table for effective decision making. Around seven is ideal (between 5–8 direct reports). If we deviate significantly from this principle then we will be designing dysfunction into the system. Organisations are complex enough without adding the burden of poor design.
Line of Sight
Line of sight refers to the subjects that a leader needs to have an immediate view of. It will represent the roles and number of direct reports and the voices around the executive table for effective decision making.
Determining the subjects that a leader needs to have a direct line of sight of arises from the critical accountabilities of that leader’s role. Each leader has delegations from the level above them – delegations that fundamentally describe their role and that they are accountable to cover and deliver on.
Determining the seven or so subjects that a leader needs to be across arises from answering the following questions:
1. What are key functions delegated to this leader that they are accountable for to their own boss and their peers as they sit around their boss’s table? For example, if the role in question is the Director of Corporate Affairs, then for that person to fulfil their accountabilities to their own boss, the CEO, they will want a line of sight to government affairs, media relations, internal communications, external stakeholder relations, regulatory policy and social media engagement. If the group in question is a self-contained operation, then the CEO will want a direct line of sight to engineering, production, sales, delivery, finance, people and quality/safety (they wouldn’t want quality/safety delegated to production where that voice would be lost).
2. What are the areas of risk to performance – that if mess-ups occur then we will be seriously embarrassed and our business seriously impacted? The leader needs a line of sight to these subjects. For example, a mess-up on safety can seriously impact a resources company. The mine manager would want a direct line of sight to the person responsible for safety and the environment.
3. What is the primary purpose of this organisation/department? The leader will need a line of sight to those functions. For example, the operating facilities of an Aged Care organisation represent the purpose of the organisation and hence the CEO will want those functions reporting directly to them rather than through a Chief Operations Officer.
If Too Many
If a leader has materially more than seven direct reports – say 10-12 reports – then the leader will be skating across too many subjects without being able to devote the time to any one of the key subjects. And there will likely be duplication of voices at the table and confusion of responsibilities among direct reports.
If the temptation is to have significantly more than seven direct reports, the answer is often in redefining the roles of direct reports. Instead of thinking about roles as say “soft drinks”, “hot drinks”, “alcoholic drinks”, “water”, those functions could be grouped as “beverages”. Suddenly by grouping there is now one direct report in the place of several.
Sometimes a leader has too many direct reports for historical reasons. An insurance company had an overly large executive team due to an acquisition a few years before and the CEO had not wanted to disappoint the two owners of the acquired firm by dropping one of them from the top team. It led to dysfunctional behaviour and duplicated responsibilities. It is better to face up to the issue and risk disappointing an individual than have the executive team’s effectiveness and operational performance pay the price.
If Too Few
If a leader has only 3-4 direct reports then the leader is too limited in the information coming directly to them. And too much power and influence will be delegate to one or more of their direct reports. One of the signs of dysfunction with too few direct reports is that the leader, intuiting the need for more direct information, skips down the structure below their direct reports to access information. The direct reports feel that the leader is meddling. The leader’s reaching directly down the organisation undermines the authority of their direct reports and creates frustration in the system – all due to dysfunctional design.
Napoleon wouldn’t have chosen the number of seven functions of government by chance. He was incredibly well read and a student of history – as a poor teenager, he wrote years later, he preferred to purchase a book than consume a hot meal, given he couldn’t afford both. His two favourite historic characters, no doubt models for his own ambition, were Alexander the Great and Julius Caesar.
Andrew O’Keeffe is the Principal of Hardwired Humans which assists business leaders design and implement people strategies based on human instincts.
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