The Nature of Things (organizational levels included)

For best results, each level in an organization needs to perform very specific types of work. It’s only natural.

This is a follow-up to an earlier article: “The Cost of Vertically Misaligned Management”.

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We see around us every day the costs of vertical misalignment: how gaps and compressions lead to Direct Reports that are either micro-managed or lost in the wilderness.

What is behind this phenomenon? What is it about the nature of organizational layers or levels and the gaps and compressions between them that prevents getting work done effectively and efficiently?

Fifty years of research on the subject, 25 years of our own observations, and, well, common sense has shown us the naturally occurring distinctions between work at each level of an organization. Fundamentally, the distinctions are based on how each level adds value to the layer below it.

Level 1

Let’s begin at the Front Line, or “Level 1”. Logically, the purpose of your Front Line is to execute tasks, focusing on quality delivery. To most effectively achieve this, tasks should not require “planning out” a span of time greater than 3 months.

Level 2

The purpose of Level 2 staff members, the first level of management, is to diagnose and resolve obstacles and challenges faced by their Level 1 staff. What is implied is that the goal of first-level Managers is to motivate their teams toward flawless execution. Time span of their work is 3 months (i.e. greater than the level below) to a year (a typical fiscal year delivery cycle).

Level 3

The work of Level 3s, usually Directors, is to identify, develop, deploy and continuously improve the plans and processes used by their Level 2 staff with their Level 1 staff. The goal is to optimize the execution of the strategy of their organizational function (e.g. Operations, Sales, Human Resources). The focus of the work is to develop new and improved ways of doing things within a time span of 1 to 2 years – a realistic time span for devising and rolling out system initiatives.

Level 4

The purpose of a Level 4 role, usually a Vice President, is to challenge the status quo and to look for new opportunities while “unpacking” overall organizational strategy into the strategy for their organizational function. This gives Level 3 staff the context and direction to develop their systems, and ensures a tight alignment with overall strategy. The focus is the future –new services, products and customers – and works within a time span of 2 to 5 years.

Level 5

The purpose of Level 5, a President of a small to medium-sized organization, is to ensure harmony across functions. The role is required to orchestrate organizational systems within the context of a constantly changing external environment. Level 5 work is to give overall strategic direction and subsequent coordination between the functions in the organization. Level 5 work looks out 5 to 10 years.

Note that there are larger organizations with a 6th, or 7th or even 8th level, but for our instructional purposes here, we’ll stop at five.

As you can see from the nature of the work described, each level provides value by doing a specific type of work that empowers the level below. This is a logical and natural series of steps of “washing” organizational strategy down through the organization.

The nature of work at each level is the reason that vertical gaps and compressions produce so much organizational pain. If there is a gap between any two levels, an entire level of work is not getting done. When this happens, strategy does not wash down effectively. For staff at the lower level of a gap, they feel lost. Further, their work is not tightly connected to strategic goals, resulting in misspent effort.

In the first wave of corporate downsizing in the 1990s, whole swathes of Level 3 roles were discontinued (“These folks are neither strategic nor tactical, so why do we need ’em?”). The result was Vice Presidents dropping down to Level 3, losing their future-facing, strategic focus. Meanwhile, Managers were pleading for the unpacking of strategy so that they could build the systems they needed to drive their teams to excellence.

In an instance of a compression, the two roles are effectively doing the same type of work. Specifically, the nominally higher level is not able to perform the work needed to effectively add next-level value to the nominally lower level. The result is the higher role managing process instead of their people which inevitably leads to bureaucracy and micro-managing.

Where this gets really interesting is when you add capability to the mix. Sometimes gaps and compressions are not just anomalies on an org chart.

But that will have to wait for the next edition of Forrest Fire.

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