Pat Harpell had 18 people reporting directly to her. She was working that many hours and more some days, but she eventually realized that to grow and develop her business, she'd have to reduce the number of people she had direct control over. Harpell, 46, began hiring middle managers for Harpell Inc., a transactive marketing services company she founded in 1982 in Maynard, Massachusetts, and assigning them daily oversight of the growing number of employees.
"I realized I was the bottleneck," Harpell says. "But by limiting the number of people reporting to me, I was able to look beyond day to day and focus on building a unique brand and position for the company." Three years later, Harpell has 60 employees. The number of people reporting directly to her, however, is only six, and they're all department managers. "My biggest value to the company," Harpell explains, "was to work on it, not in it day to day."
Harpell's problem was that her span of control-the number of people a manager can effectively manage-was not large enough to handle her job. According to management experts, span of control isn't dependent on individuals; rather, it's a basic limitation of all managers and refers only to direct reports. When given enough levels of hierarchy, any manager can control any number of people-albeit indirectly. But when it comes to direct reports, the theory suggests entrepreneurs must respect managers' inborn limits.
Span of control is widely taught in management schools and widely employed in large organizations like the military, government agencies and educational institutions. Yet few entrepreneurs know the term or are willing to admit any limit to the number of people they can directly oversee. A 1995 study of entrepreneurs found that of more than two dozen management principles, including such concepts as the usefulness of planning and the need for clear communication with subordinates, span-of-control issues were the least appreciated. Only 23 percent of the people surveyed agreed that "span of control shouldn't be too large," and a meager 16 percent of them believed "top managers cannot deal with all problems personally."
Lawrence Jauch, a management professor at the University of Louisiana at Monroe and co-author of the study, explains that fear of losing control is behind such attitudes. He says managers try "to do everything and supervise everyone. All decisions must come to them."
Fred Nickols, senior consultant at Robbinsville, New Jersey's The Distance Consulting Company, warns that extending span of control beyond the recommended limits engenders poor morale, hinders ef-fective decision-making and may cause loss of the agility and flexibility that give many entrepreneurial firms their edge. "People won't act or are even afraid to act," Nickols says. "Then problems don't get worked out, and everything gets escalated to the top. Eventually, you're not going to be able to respond."
Mark Henricks is in Austin, Texas, writer who specializes in business topics. His latest book, Grow Your Business, will be published by Entrepreneur Press in February.