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Tuesday, July 17, 2012

What Happened To The Management Pyramid?

The traditional management pyramid became popular after WWII, showing one guy at the top and a majority of people at the bottom. There were successive layers of fewer people going up, and business types thought their career was moving up the pyramid.

American Pyramid
I don’t think I got the memo that said that the likelihood of getting to the top was less than one percent. Fifty years of expansion makes that easy to overlook.

Those people in the middle were adding value by messaging up and down, and to salve their pride, they were also supposed to know more than the people below them. A lot of comedy has been written about that particular misconception.

I was involved in a Seagull Management exercise last week. She came in to help with the busiest day. I turned to the former leader (who was pretty good) and said, “That’s your boss right?”

She observed my observation was correct.

I said, “Why don’t you take her out for coffee and ask her how we should do this and keep her talking until we get done?”

And so it came to pass.

Two years ago I read a piece (I can’t find) that the management pyramid had bloated to a management pentagon, with more people watching the people on the bottom doing the work, than were doing the work. Last week I read that the Department of Homeland Security has over 85 Congressional Oversight Committees keeping tabs on the proceedings.
Management Pentagon

One possible reason for a pentagonal management structure is a desire to keep people, when they have a desire to stop doing the work. Most people who go to a staff role attach increasing value to their work over time. I also find mid-levels staffers have often developed a mission that is quite different from the doers.

I measure three criteria for defining value of an activity: Does your work product change physically? Did you get it right the first time? And does the customer care?

You have to achieve all three to be providing value. And no fair defining a new customer no one else is serving.

Over the past three years we have seen a severe loss of middle management in the private sector. These were the people with clipboards, the checkers. When I was a union carpenter, older guys wanted to “stop working with the tools.” Those were exactly the positions that have been axed more recently.
Skinny Pyramid

We’ve changed our business processes to take advantage of computerized communication. One computer can communicate effectively with thousands of workers, and monitor results for management. This result is a skinny pyramid, the opposite of the organizational pentagon.

In preparing The Direct Economy, I discovered I have gone post-pyramid. I figured out I was working with 15 people in 9 distinct ventures, some paid, some under development.

It’s not a management pyramid structure, it’s a hub and spoke system, some projects I am leading, others I play a supporting role. At the time I noticed this, I was just reporting my experience.

A year later, I found this great video from Clay Shirky at TED, about  Institution vs Collaboration. It's 20 minutes and makes a powerful case.

I don’t have a “best” model or even one that I favor. I have seen where each of these models has delivered. What I am seeing is that organizations are changing due to many pressures, and that adopting a better model is often a key to continuing.

What organizational models are you observing?
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