From the January 2001 issue of Entrepreneur

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.

Supervising Three To Six People

The concept of span of control was popularized in 1922 by Sir Ian Hamilton, a British general who said the experiences of centuries of military leaders have shown that a leader can directly control no more than three to six persons. A dozen years later, Lithuanian management consultant V.A. Graicunas introduced the idea that the relationships among people you supervise are as important as their sheer number. Supervising three people who interact daily, for instance, might be harder than supervising six who rarely cross paths. Graicunas devised a set of mathematical formulas for calculating effective span of control and said that, generally, an executive should supervise no more than four or five people.

Your employees are people, too! Read Manage Your Employees Better to get a firm grip on supervision.

The rule of thumb that an executive should supervise three to six people directly held up fairly well against challenges from efficiency experts, team-building zealots, technology buffs, empowerment boosters, megalomaniacs and others determined to increase the accepted span of control. Under the impact of reengineer-ing, however, some people claim that an acceptable span of control can include 10 people or more. And some claim that managers in flat, reengi-neered organizations can supervise up to 40 people.

In practice, you don't have to be an expert or a zealot to know if you're violating span of control. First, use the rule of thumb: If you have more than half a dozen people reporting to you, it could be too many. And the larger the organization, the fewer people should report to the CEO. Hamilton said generals should have no more than three direct reports, while low-level officers can handle as many as six.

Bear in mind that even six may be too many if the people directly under the manager have many dealings with each other. The reason is that, in addition to managing relationships with each subordinate, managers have to get involved to some degree in the subordinates' relationships with each other. Graicunas figured this meant that going from four to five direct reports, each with four direct reports of their own, doubles your effective work-load while increasing your working capacity by only 20 percent.

If the people you supervise don't interact, you can handle more of them. One management writer found that Sears Roebuck & Co. purchasing managers could each cope with up to 100 buyers because the buyers had specific responsibilities and rarely interacted.

If the calculations are too much for you, just take a look at the amount of hours you're working. When workdays for the people at the top are twice what they are for others, span of control is out of whack. Says Jauch, "A key sign is [when managers are] putting in 18 hours per day because they're trying to do everything."

Shrinking Your Span

The solution to span-of-control problems is to hire more managers. You may be able to maintain head count, though, if you reorganize your hierarchy so fewer people report directly to you or to other beleaguered managers. You may find, for instance, that some underworked managers have only two or three direct reports, while others have seven or eight.

Despite the presumed precision of mathematical tools like Graicunas', the fact is that span of control is a judgment call. It's hard to accurately assess the conflicting pulls of cost control and work-load balancing. Some management experts say new communications technology and modern organizational designs make old ideas about span of control obsolete. And you can't blindly delegate your duties to others. You'll need to select and possibly hire and train managers to take over supervision performed by you or others. Choosing poorly could worsen things. You'll also have costs, primarily for training. Experts recommend managers receive at least half a day of training on span-of-control issues and practice.

On the other hand, there's the real possibility that paying attention to span of control could usher your business into a new era of rapid, sustained, profitable growth. You could even find running your business easier and more fun. Although her agency's billings have increased from $20 million to $64 million since she trimmed the number of people reporting to her, Harpell finds her workdays haven't kept pace. "Now," she says, "it's rare for me to work more than 10 or 12 hours per day."


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