Flattening The Organization

Dear Management Doctor:

Related to "flattening the organization," I understand that at least one organization (i.e. Goretex) limits its individual plants to 150 people (maximum group size that is cohesive) and calls each of its members "associates." Would you elaborate on the efficacy of this management style in other industrial situations and in government.

Emailer inFlorida

Dear Florida Emailer,

When I was in planning school, I did a study on the optimum size of cities and found I couldn't reach a conclusion. The closest I got was speculating on a size of 100,000. However, those that love their small towns would likely say that this is too large. Those that love New York or Chicago would likely say that this is too small. There does seem to be a trend that many people want more connections leading to neighborhood units and sub-area planning. These can try to be the best of both worlds. Maybe all of this goes back to John Naisbitt's book High Tech/High Touch published in 1999.

The same issues that apply to cities also apply to organizations in general. The business literature is filled with stories about how large corporations are trying to decentralize into smaller units. Part of this relates to most of us wanting to be empowered and be able to make decisions. Part of this relates to the fast moving times. Large bureaucracies simply can't move as fast as small ones.

I don't have any personal research that says 150 is an optimum size for group cohesiveness. I have managed groups from 3 people to 350. It does seem to me that 150 may be a useful number. Tom Peters in his book, The Pursuit of Wow suggested that the magic number is 153. One company blasted a 200,000-person enterprise into 5,000 units averaging just 40 people each. Richard Branson of the Virgin Groups say if you get above 50 or 60, folks get lost in the corridors of power. Union Pacific Railroad defined optimum size as 600. If you really want to get into this, try Google. I was surprised at the amount of entries. I think a lot of the size question may depend on the type of work the organization is doing. One of the Google articles suggested that for a blog 100 to 150 is a useful number. I have over 2,000 for these emails and would like to double or triple that number. So far it seems to work but this is different than managing an organization.

Corporations have also been reducing the size of large corporate offices and decentralizing some of the administrative functions to the field offices. Government has been slow to move in this direction. However, I am seeing a few positive signs. In a number of my larger clients, the HR, IT, GIS, Attorney and Finance Departments have agreed to place one or more staff in the operating department. They are not yet ready to totally cut the strings but the outplacement is generally very effective.

Finally, the word "associates" is being used by many companies and retail establishments. This again is part of the empowerment movement and giving more control to individual employees. Who wants to be called a "subordinate" anyway?

The Management Doctor 

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