As your startup grows, understanding your span of control is critical if you're going to be successful. In other words, having too many direct reports can severely damage your company.
But the question is how many direct reports is too many direct reports? I'll give you my take in this short video.
Read The Video Transcript Below:
Years ago, I interviewed to become a vice president at a company. And when I met the CEO, it became instantly obvious why I was going to turn down the job.
Now I liked the CEO. Smart guy seemed to know what he was doing, except for this one little thing just drove me insane.
And here it is. So he was walking through the organization. He was explaining the company and there was this one employee in the company. Very senior guy, is going to be at the same level as me, and the guy had 22. Count 'em, 22 direct reports.
And I asked the CEO, "why does this guy have so many direct reports?" The CEO told me, "well, you know, because he's so important to us. And this is how many people we want us to help, blah, blah, blah."
And I thought this is crazy because, here's the thing, your span of control is maybe seven, we'll make that eight, seven, seven people, seven people. That's what you can handle when you're managing people.
There's the rule of seven. If you start searching, you'll find just about every expert out there recommends when you're managing people, you want to have maybe seven reports. That's it.
Now why seven? Why not just have 22? Why not just have 13 or whatever? Because number one, you start losing your effectively when you get beyond seven.
Now for some people, maybe it gets to eight, maybe it gets to nine, if you're super good. Or maybe the responsibilities of the people are less. You know, Google has this thing I know with their engineers, allegedly, supposedly where they can have like one manager and 30 direct reports.
I think that's crazy. Quite frankly, I don't think that works, but you know, hey, they're Google. They can do it. God bless them. I wouldn't recommend it. For us mere mortals, maybe seven.
The other reason is, and this is kind of being very blunt about it., but, as a CEO, guess what you could die and your company could go away. Now, maybe you don't care about it, but maybe you should.
Because as you grow, you need a team around you. And if you're managing so many people and your organization is so thin that I would contend that you don't have a management team around you, that's ready to step in.
So those are my two big reasons why you want to follow this rule of seven. Not eight, seven.
So you want to have the rule of seven in mind when you're thinking about how to divide things up. When you get to eight direct reports, now you got to think, I want to split it up, hire some managers to manage these other people because that's how you're going to remain effective. And throughout the organization, keep that rule of seven in mind.
Seven, seven. Keep that rule of seven in mind as you're growing, because that's, what's going to keep your organization and your managers, healthy and competent and understanding what's going on. I'm, Brett at Brettjfox.com. Have a great, great day.