Conference 7.286::digital

    
    	Jack Welch, CEO of GE, has been widely quoted as to the six levels
    of management structure.
    	Jim Champy of CSC Consulting Group also wrote extensively on the
    levels of management in his book "Reengineering the Corporation".
    
    	Regardless, span of control is not the issue, although much is
    said about it. Quality of management is much more the issue at Digital
    these days.
    
    		the Greyhawk

    ;-)
    

    I don't know who gets the official credit for it, but I remember our US
    Secretary of Labor, Mr Robert Riechhhhhhh (Sorry Rush!!!) making a
    similar statement at the FY'91 Circle of Excellence in Palm Springs.

    Greyhawk,
    
    Agreed quality of the Digital management is a BIG issue but I think
    quantity is equally as big. If we removed 1,000 mangers @$100k/year
    that's $100M/yr. Double that number for benefits and then add some for
    all of the ones at over $100k/yr and the numbers could make a
    difference. Add to that, the cost savings associated with reduced paper
    due to a significant reduction in mgnt. reports and WOW :}
    
    Pat
    
    

    
    	Pat, sorry, the quantity statement was meant to be tongue in cheek,
    somehow my foot keeps thinking it can talk. Thanks.
    
    		the Greyhawk

    the assumption in .4 is that 'managers' are people who sit around and
    just spend their time 'managing', (directing, giving orders, being
    overhead, not adding value, etc). In fact, it is my experience that
    most digital managers spend more time as individual contributors than
    in doing activities which resemble management. So, if anyone can
    identify the work that is being done by these thousand people as no
    longer necessary to be done, then indeed we can save 100m.

RE: .6

Some managers spend their time creating more work for everybody else.

--PSW

    
    
    	If each manager managed 10 folks then
    
    	1 level ---> 11    persons in company
    	2 levels --> 111
    	3 levels --> 1,111
    	4 levels --> 11,111
    	5 levels --> 111,111 heads company.
    
    	While it is unreasonable to expect a perfect balance of 1:10
    	it would appear reasonble that B.P. should not be more that 5 levels
    	away from you average indians given fewer than 80,000 indians.
    
    	fwiw,
    		Hein.
    
    
    

My thesis has always been that this should have been the FIRST item tackled
before any involuntary TFSOs.  That we haven't done so in 4+ years of losses
indicates to me that management is not serious about cost cutting.

Many managers i have seen also do function more as ICs for their managers
than as people managers for their reports.  My belief is that increasing
span of control to 1:15 or 1:20 would solve this, if you let the managers
have 20% or so of those 15-20 people be consultants or troubleshooters to do
the IC work that they (the managers) are trying to do now.  Maybe it would
take some of the glamor away from the management career path, but the focus
of management properly should be on their people and on helping their people
get their work done more easily.
								- paul

    Any ABSOLUTE standard for span of control is RUBBISH.  IMHO, it is
    highly dependant on the job/department function.
    
    FWIW, my client approximates Digital in terms of sales revenue
    worldwide.  They are privately held. they have the following
    "hierarchy" with the analogous "title".
    
    Zone 1: Owner (3)
    Zone 2: [Global] Staff Officer
    Zone 3: Division President
    Zone 4: Vice President
    Zone 5: Director
    Zone 6: Manager
    Zone 7: IC
    
    No Zone 4 [VP] reports to any other Zone 4. People are DIRECTLY
    accountable for EVERYTHING in/under their zone. Everyone is accountable
    to the owners. Decisions are made...virtually immediately (although
    I'll admit it takes them awhile to get all the i's dotted and t's
    crossed to get me orders!!!). 

    How many VPs are in your (anyone's) chain of command?
    
    There are 6 levels of management above me up to, and including, Bob 
    Palmer. Three of those are VPs. 

    Re my .10.
    
    I guess I should mention that the company I decribed (~$15B in sales)
    has about 24,000 FT employees., so their sales per employee are about
    $600k.

    In the U.S. Sales organization there are six levels above my head. 
    
    They consist of:

    			Palmer-CEO
    			  |
    			Pesatori-V.P.
    			  |
    			Cooperman-V.P.
    			  |
    			Roeth-V.P.
    			  |
    			Central States V.P. Sales
    			  |
    			Central States Channels Manager
    			  |
    			  Me

    So, by the rule (or theory of six'es) my chain of command is in synch.
    with the management levels being discussed here.  James Champy who
    authored the book "Reengineering the Corporation" did come up with the
    six levels of management theory.  I recommend the book, it is
    interesting and offers some perspectives on how Business Process
    Reengineering can make a difference.

    I believe the real question here is how many levels of management does
    a company need to operate and function as a growing and healthy
    enterprise?  If I am a consultant working for myself, then there is
    only one level.  If I am a consultant working for Digital there may be
    6 or 7 levels.  Now the real question is, do the 6 or 7 levels
    above me continually add value to the process so that the individual
    contributor, the consultant, can process and deliver more work
    profitably and efficiently versus the one person business consultant
    who is bidding, winning, and delivering on the same business?

    If the processes within a level of management are broke or wrong for
    the business, then companies typically throw human flesh at the problem
    to shore up the battlements.  Instead management should be asking
    themselves the almighty question, "Why am I doing this and should I
    continue to do what I am doing"  This is a tough question because it
    insinuates that CHANGE is on the way and people are inherently
    resistant to changing the way they do things.  

    It's kind of like the guy who has a flat tire right in front of the
    mental hospital.  On the other side of the fence is a resident of the
    hospital watching the tire changing exercise go on in front of him. 
    The guy who is changing the tire accidentally knocks over the hub cap
    where he has placed all the lug nuts for the wheel.  The lug nuts roll
    down the sewer hole and are lost below in the river of sewage.  Now he
    has a real problem, no lug nuts to attach the spare tire.

    While he is cursing and pacing up and down in front of his car the
    inmate on the other side of the fence says, "Why don't you just loosen
    one lug nut from each of the other wheels and use those three nuts to
    hold the spare on until you get down the road to the service center and
    you can buy new lug nuts there?"  Well with this the guy is completely
    astounded that the guy behind the fence in the mental hospital could
    think up such a fantastic idea, to which he replies, "How can you be in
    there when you come up with ideas like that?"  And the guy replies,
    "Well, I'm crazy but I'm not dumb!"

    So the lesson for the day is, we need to have all levels of this
    company really really looking and testing all the broken processes to
    wit we are throwing massive amounts of the three great commodities of
    human existence at, people, time and money, and nut use management of
    IC's to plug the wholes in the dike, but rather fix the dike and use
    our employee intellect to really do the important work at hand like
    finding the cure for cancer, servicing our customers beyond their
    expectations, making out communities safer and healthier to live in, 
    take care in educating our children, and in general add value to each
    and every thing we do.

    BJ
    			

    	An interesting thing is the trend towards matrix management with
    the increase in outsourcing. Someone external to DEC will have his
    people manager who will be non-DEC and pays his salary, and a project 
    manager who *might* be DEC (I know an outsourced project manager), 
    and possibly a DEC manager involved somewhere too. With a large
    external contractor there might be other levels of management there
    too, but we are outsourcing that when we pay for the contractor.

    re .12
    
    I think you left out a VP level..Pesatori holds 2 VP jobs...his real
    job is VP of CSD, and he is acting VP of the SBU, under which Harry
    Copperman reports.  
    
    Mark
    

>    	An interesting thing is the trend towards matrix management with
>    the increase in outsourcing. Someone external to DEC will have his
>    people manager who will be non-DEC and pays his salary, and a project 
>    manager who *might* be DEC...

  Interesting thought. BP and the SLT say that matrix management is obsolete and
we're getting rid of it, but we are creating a new form of matrix management
by outsourcing so much of our work.
  I liked the mental hospital story. Sometimes I feel like I'm the one in the
mental hospital, except there is a solid wall instead of a fence between me and
the street so I can't give advice to the tire-changer.

Re: .13         Thanks for the org chart, as I'd like to use it to paraphrase
Al Cini's "School of Digital Management".  The org chart is fairly generic
through this company, so other geographical areas should still relate.

In your chart you show:
                                Palmer-CEO
                                    |
                                Pesatori-V.P.
                                    |
                                Cooperman-V.P.
                                    |
                                Roeth-V.P.
                                    |
                                Central States V.P. Sales
                                    |
                                Central States Channels Manager
                                    |
                                    Me


However, you left out the most *important* member of this chain of command, or
any other company's for that matter.  You should also add:

                        .
                        .
                        Me
                        |
                    *CUSTOMER*

Now think about this for a second:  who's "in charge" of sales?  You (me) may
be responsible for *a* sale, but the bottom line is that your customer is
*IN CHARGE* of the sale--not you or I, or the hundred layers of management
above us.  Therefore, who's the real *BOSS*???  You guessed it!  THE CUSTOMER!!

Therefore, the real corporate structure should look like:

                    Customer
                        |
                        Me
                        |
                Central States Channels Manager
                        |
                Central States V.P. Sales
                        |
                    Roeth-V.P.
                        |
                  Cooperman-V.P.
                        |
                   Pesatori-V.P.
                        |
                 Bob Palmer--CEO

The customer is in charge of their company; so from my version (actually
Al Cini's) of the org chart, this places *ME* in charge of this company!!!
Sure we could use that manager *below* us to help schedule time, budget, etc.
He/she could help keep the V.P.s *below* him/her out of our hair while those
in charge of this company (you and I) attempt to make sales of product and
services to bring OUR company back to a profitable state.

Sure we could use a V.P. or two--NOT the number that we currently have.  For
every $100K salaried V.P. (I'm sure that's a low-ball $$ for many of them),
we could keep 2 (maybe more) sales/presale execs and consultants in the
streets.

Although ludicrious, albiet funny, the low-budget T.V. show "TV Nation"
challenged an IBM CEO in New York with a bull horn to "take the corporate
challenge"--I forget the host of that show's name (or maybe the TV Nation is
not the correct name), but he bellowed "We challenge you:  Come down and format
a floppy!".  Needless to say, he didn't show.

We should make a similar challenge to our managaement:  Come out and make a
sale!  Come on down and configure that VAX!  Come on down and configure that
DEMSA box!  Come on down and configure OSI to talk to X400!  It could get
worse, so I'll stop here--I think the point is made.

I think more of our company's upper management and the people in it--yes even
the V.P.s and above.  I KNOW they can format a floppy.  But can they meet us
head-to-head in making the customer happy and/or satisfied.

Bottom Line you ask?  Unless this company again recognises who is in charge
and that the corporate bottom line comes from us managing those customer
accounts, and that you have to spend money to make money, then we will never
have a snowball's chance in hell of recovery!  Of those of us that are left
after the mandated shakeouts, we must all take that attitude--This is MY
company and I want it to succeed.  Lead, follow or get out of the way!  We
CAN help turn this company around, if someone will let us.

.13 spoke of his management being "in synch"--according to my aforementioned
model, I'd disagree.  We are further out of synch then ever until we can
empower the front line "worker bee".  Many of the problems surrounding low
moral stem from this out-of-synch management; we small people feel helpless
and left out.

Enough rambling editoral....In closing, I believe it was Conrad Hilton's
mother who told him as a young boy:  "Son, if you want to build big ships,
you'll have to do it in deep water."  Well, fellow comrads, I do believe
we're in some real deep water.  However I don't believe that the management
of the "steel company" is prepared to supply the materials necessary to build
these big ships.

Aim high, any fool can hit the ground!

Jesse

P.S.  My thanks and apologies to Al Cini--an excellent speaker and former
"worker bee" at Digital (some 10 years ago).  He now consults to us for
many courses.  If you don't know him, try to take any one of his classes
(typically around LAN, networking, etc.)

    Someone in this string asked how big an organisation can get if there
    are no more than 6 levels, each with a workable span of control...
    
    In the UK, Nissan, the car makers, have a management process that
    enables a line manager to successfully deal with 150 direct reports.
    
    GEC in the UK has 160+ company managers and sundry HQ managers
    reporting to the CEO with a succesfully implemented management process.
    
    So, assuming that a modest 100 people per manager isn't too difficult,
    we have a maximum size of 10^6 or one million million employees.
    
    That big enough???

    10^6 = one million
    one million million = 10^12

    Ooooppps! typo...
    
    I meant 100^6 (six levels with 100 each)
    
    and 100^6 = one million million

    I think you're doing the math wrong....
    assuming 6 levels of managment and 10 employees per manager,
    you can have 111,111 max employees.

    for example

    1 level = 1 employee
    2 levels = 11 employees
    3 levels = 111 employees
    4 levels = 1111 employees
    5 levels = 11111 employees
    6 levels = 111111 employees
    
    With 7 levels, we could have 1,111,111 employees.
    bob

    >>>    assuming 6 levels of managment and 10 employees per manager,
    Are you a manager? He said 100 employees per manager and you seem to
    have heard 10. If you are not currently in management you certainly
    have the potential. 8^)=
    
    Karl