Optimize Your Span of Control Increase cost containment

Optimize Your Span of Control Increase cost containment, productivity, and people management capabilities by optimizing your span of control. SAMPLE Learn about becoming a member Mc. Lean & Company is a research and advisory firm that provides practical solutions to human resources challenges with executable research, tools, and advice that will have a Mc. Lean & Company is a research and advisory firm providing practical solutions to human resources challenges©via executable research, tools and advice that clear and measurable impact on your business. 1997 -2019 Mc. Lean & Company. have a clear and measurable impact on your business. © 1997 -2019 Mc. Lean & Company. Mc. Lean Company is a division of Info-Tech Group. Mc. Lean & Company is a & division of Info-Tech Research Group. Research Inc. Mc. Lean & Company 1

EXECUTIVE SUMMARY Situation • There is an increased need to restructure – new competitors are using unique approaches to cut costs, enter markets, and simplify work. • HR often strives to optimize span of control (So. C) as part of the overall organizational design strategy. • According to Mc. Lean & Company’s 2019 HR Trends & Priorities survey, non-HR respondents scored organizational design higher in priority and lower in effectiveness compared to HR respondents. Key Insight: Complication • The absence of a standard approach to optimizing So. C creates a lot of uncertainty around measurement, analysis, and timing decisions. • Managers play a significant role in driving engagement. Overlooking engagement decisions in So. C can be risky. The So. C structure must be optimized to leave space for leadership action that improves engagement. Resolution • Use our customized So. C process to effectively prepare to restructure. Complete the Span of Control Playbook to capture project decisions and data for all iterations of your So. C optimization process, including: o Collection and analysis of organizational data to identify So. C patterns, extract insights, and determine pain points. o Assessment of the five critical factors that impact So. C, from both an organizational and a functional perspective. o Review of the various cost-saving scenarios through widening So. C. o Establishment of high-level So. C parameters to guide customization efforts. o Tracking of organizational and project metrics. SAMPLE There’s no magic number when it comes to span of control; in order to be agile in the face of rapid change, organizations must be strategic in aligning span of control with organizational goals in both the short and the long term. Mc. Lean & Company 2

MCLEAN & COMPANY OFFERS VARIOUS LEVELS OF SUPPORT TO BEST SUIT YOUR NEEDS DIY TOOLKIT GUIDED IMPLEMENTATION “Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful. ” “Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some checkins along the way would help keep us on track. ” WORKSHOP CONSULTING “We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place. ” “Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project. ” Diagnostics and consistent frameworks used throughout all four options SAMPLE Mc. Lean & Company 3

Use the Mc. Lean & Company optimized So. C process to effectively prepare to restructure 3. Prepare to Deploy Initiative 2. Assess Impacts on Current So. C 1. Determine Current So. C SAMPLE Mc. Lean & Company 4

SAMPLE SLIDES SAMPLE Mc. Lean & Company 5

Span of control is an important component of the organizational design process Organizational Design (OD): The process of matching an organization’s form to the purpose it seeks to achieve. Strategy People Roles Processes Adapted from J. Galbraith’s Star Model SAMPLE • Span of control (So. C) refers to the number of direct reports assigned to a manager. o Note: Having “manager” in a title doesn’t always mean the person has direct reports. This set will specifically focus on people managers with direct reports. • Centralization indicates where decision-making authority is located within a structure. In its extremes it can be: o Held by only one person (centralized) o Distributed among many people at different levels (decentralized) Structure Organizational Design Culture Structure encompasses several components, including span of control and centralization. This set will focus on So. C in the context of restructuring. If the degree of centralization within your organization is undefined, you may find it valuable to begin with the Determine the Degree of Structural Centralization blueprint before tackling So. C. Mc. Lean & Company 6

There are significant discrepancies around the effectiveness of organizational design The decision to restructure follows a top-down approach where HR must lead the initiative, often by striving to optimize So. C as part of the organizational design strategy. According to Mc. Lean & Company’s 2019 HR Trends & Priorities survey: Organizational Design Organizational design scored higher in effectiveness with HR than with non-HR respondents, and low in overall effectiveness. An important need exists that HR isn’t adequately addressing. 35% Effectiveness 24% 0% 10% HR Respondents 20% 30% 40% Non-HR Respondents N=883 SAMPLE Mc. Lean & Company 7

Engagement is impacted by both wide and narrow So. C approaches, so balance is key Wide So. C (fewer layers of management and many direct reports per manager) can lead to too much responsibility, which overwhelms unprepared employees, leading to mistakes or panic. Narrow So. C (many layers of management and very few direct reports per manager) can lead to too little responsibility, which can frustrate employees who are capable of doing more. “Google tried relieving all managers of their management responsibilities. The experiment was short-lived because of people issues and problems that the company could not handle effectively without managers. Google reinstated the manager role within six weeks. ” “Cognitive neuroscientist, Patrick Haggard [said], ‘It seems like your sense of responsibility is reduced whenever someone orders you to do something – whatever it is they are telling you to do. ’ A reduced sense of responsibility sounds an awful lot like. . . disengagement. ” – Rigoni & Nelson, 2016 Blind Trust SAMPLE – Kirkpatrick, 2016 Micromanagement Mc. Lean & Company 8

MCLEAN & COMPANY HELPS HR PROFESSIONALS TO: Maintain a progressive set of HR policies & procedures Develop effective talent acquisition & retention strategies Demonstrate the business impact of HR Build a high performance culture Stay abreast of HR trends & technologies “ Now, more than ever, HR leaders need to help their organizations maximize the value of their people. Mc. Lean & Company offers the tools, diagnostics, and programs to drive measurable results. “ Empower management to apply HR best practices – Jennifer Rozon, Vice President, Mc. Lean & Company Sign up to have access to our extensive selection of practical solutions for your HR challenges LEARN ABOUT BECOMING A MEMBER Toll Free: 1 -877 -281 -0480 SAMPLE hr. mcleanco. com Mc. Lean & Company 9