The First Way to Manage Organizational Complexity is to See It. (Spoiler: Seeing is Understanding).

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While browsing the inter-webs (General Motor Innovation Labs Chief Micheal Arena’s twitter feed, specifically) seeking to build interest in my company’s visual HR Analytics service, I came across this fascinating chart from a working paper, “The Flattened Firm — Not as Advertised” by Julie Wulf.

This chart was embedded as “8. How are companies dealing with complexity? With more complexity! (CEO span of control)” in this endlessly interesting post entitled, “The future of work in 29 powerful charts”.

What was fascinating about it was how clearly (and empirically) the chart illustrates a trend that Macromicro sees frequently: that the complexity of organizations — specifically, large corporations — has been increasing steadily despite the trend to “flatten” organizations. Managing this complexity has become onerous for many reasons including the apparent self-inflicted one that Steve Pell suggests — adding more complexity.

What is further insightful about this chart is the span of control for Chief Executive Officers doubled from about 5 reports to 10 reports in 20+ years (the scope of the working paper). I am sure that some VP’s of Human Resources and C-suite Executives are aware of the trend but perhaps not the mix of reports; i.e., the increase in functional managers reporting to the CEO.

Seeing this information is helpful, but without the entire organizational structure to put these HR analytic data points in context, the chart raises more questions than it answers. What would be valuable to understand, for example is: What is the organization’s span of control by management layer? Or by Title or Department/Division or Geography? What is it by gender, tenure, or diversity? Or, even, performance score?

Above: span of control distribution by management level.

Then take it a little further: What is the correlation between performance and span of control? Do more experienced managers with longer tenure and a higher span of control have higher productivity? Maybe having different span of control in finance vs technical operations is desirable?

My point is that you can better manage spans of control by measuring it ongoing, something you can easily do with Macromicro. It is easier and more intuitive when you can see it all in one interactive web application. Without organizational context, you miss important insights that would never be visible through traditional analytic methods, (Macromicro’s founding principle).

Moreover, seeing the insights holistically in an organizational (macro) perspective:

…and also in the human (micro) perspective allows for true contextual understanding. Above, an entire organization represented in a single screen.

Without organizational context, you likely miss important insights that would never be visible through traditional analytic methods (Macromicro’s founding principle).

Seeing is understanding. Easily understanding organization complexity matters more now since human capital is responsible for 85% of corporate value creation.

For more context and perspective, please read leadership and organizational behavior thought-leader, Steven Balzac’s ruminations in “Data Analytics: Are we there yet?” on computerworld.com.

If you are interested in learning more about OrgInsight, or here to contact us.

Source: Deloitte University Press