Big Tech is winning the battle of the Bulge.
Companies Are Shedding Layers of Management in an ATTEMPT TO REDUCE BUREAUCRACY. Some Employees are Applauding the Move, Known as Flattening the Middle, In Hopes of Getting Faste and Boosting Efficency.
Microsoft Said Tuesday Is Slashing About 6,000 Employees. While the days of SINCE HAVE MADE IT CLEAR MANY OF THOSE CUT WERE INDIVIDUAL-CONTRIBUTOR-LEVEL ENGINEERS, EXECUTIVES PREVIOUSLY TOLD BI ONE MOTIVATION BEFORE THE RECENTS WAS TO INCREASE MANAGERS “” OR The Number of Reports for Manager.
Intel Announched a Great Flattening Last Month, Emphassing More Time in the Office, Less Admin, and Leaner Teams.
“The best leaders get the most done with the fewest People,” The Chip Giant’s New Ceo, Lip-Bu Tan, Said in A Memo to Staff.
Amazon has Also Increas the Ratio of Individual Contributors to Managers. It calls it a “Builder Ratio.” Google Ceo Sundar Pichai Told Staff Late Last Year that the Company Cut Vice President and Manager Role by 10% As Part of An Efficency Push. Meta has ben at it for years, with CEO Mark Zuckerberg Writing in a 2023 Memo, “Flatter is Faster.”
The risk is that they companies May have cut too manage managers, which would be remaining folks with tyports.
But for now, it appears to be a risk companies are Willing to take.
Agility and Expertise
The logic of cutting from the middle to speed up is Sound, Management Experts Say.
“You Can’t Go Faste and Be More Connected to A Large Ecosystem If You’re Having to Go Up and Down a hierarchy for Every Decision,” Deborah Ancona, A Professor of Management at the Massachusetts Institute of Technology, Told Business Insider.
While some companies have been trying for decades to zap management layers, there’s a new urgency to do so. Businesses exist in “an exponentially Changing World,” Ancona Said.
Dell Executives Explained this to Employees Earlier this Month, we have began reorganizing managers to have more direct reports. The Company, Whose Head Count Has Dropped by 25,000 in Two Years, ALSO pointed to the influx of artificial intelligence as a reasson it needed to move Faster.
Ideally, Companies Wold Remove Layers and Spread Decision-Making Throughout the Organization So That Those Closest to Customers or Technology, For Example, Could Generate Ideas and Makes, Ancona Said.
“You’re Kind of Flipping the Organization,” She Said. “Rather than all the ideas coming from High, you have entrepreneurial leaders who are those lower down in the organization up with new ideas.”
Bayer Ceo Bill Anderson is Leery of Having to Run Everything Up The Chain. AFTER TAKING Over the German Botech Company in 2023, he began implementing what he called a “dynamic shared ownership” setup that has cut thusands of managers. Staffers come together in mini mini networks for 90-day stretches to work on Projects, he Said.
“We hihly highly educated, trained people, and say we put them in these Environments with rules and procedures and eights of hierarchy,” Anderson Previously Told Bi. “Well we wonder why Big Companies are so lame Most of the time.”
Fewer Managers, More Reporting, More Meetings?
Wen Middle Managers Are Cut and Layers condensed, inevitably, more workers report to Fewer Managers. The logistics of that vary, and the success in terms of morality has a lot to do with the starting point.
Amazon Started Flattening Last Year. In September, CEO Andy Jassy ORDERED A 15% Increase in the Ratio of Individual Contributors to Managers by March. Senior Amazon Web Services Managers Received A Memo in Januly Instruction I say to restrict high-level hiing and increes their number of directs.
An Amazon Spokesperson Told at the time that the memo may have been innded for one team but did not appliant to the Company at Large. The Amazon Spokesperson Also Reference A September Memo from Jassy Saying He Believed Reducing MANAGEMENT LAYERS WAUDED HELP The Company.
An Aws Manager Told Bi This Month That The Flatter Structure Had Put More Burden on Her Team Employees to Report on What they Doing Day-to-Day, in Addition to their Actual Work, Since Managers Time to Inspect People’s Work.
This manager added that they were spending more in meetings as they have took on a more diversic grup of direct reports. The Amazon Spokesperson Said The Individual Employee’s Anecdote Did Not Represent the Company as a Whole.
Yvonne Lee-Hawkins Was Assisigned 21 Direct Reports when She Worked for Amazon’s Human Resources Team. She Told bak she had to quickly Learn New Skills to Handle the Load, Like Asynchronous Work Strategies, and that Her Team’s Performance Suffered as HER NUMER OF REPORTS GREW From 11 Employees.
Weekly One-on-Ones-The Subject of Much Debate Among Tech Titans-Became Impossible, She Said, and She Had to Cut in Half.
At Microsoft, a half dosen Employees who spoke with biut the manager Flattening trend generaly regarded it as a position Step to eliminate ineffition and unnecessary levels of managers. Some managers have as Few as one or two reports.
Microsoft dream up with MANY Management Layers, The People Said, Because It Offen TRIED TO REWARD ENGINEERS by promoting. Offen, they added, those enginers tournaed managers still spent at their in the Codebase and weren’t Very Effective as Managers.
Meanwhile, these People Said, Large Groups of Direct Reports offening better for senior employs, who need less one-ion time and can do more Things in a Group Setting.
A Microsoft Spokesperson did not comment we are asced about these factors.
Gary Hamel, A Visiting Professor at London Business School Who Lives in Silicon Valley, Told b That Pushing Managers to Take on More Direct Reports Could Reduse Micromanaging, A Common Bane of Corporate Existent.
When Managers have a lot of People to overssee, it flush to hire People they Trust, Mentor Rather than Manage, and Give Up A “Pretty Big Dose” of their Authority, he Said.
“Those are all hugely positiv things,” he added, if they Require “a fairly dramatic change” in how managers see their roles.
How Many Direct Reports is Too Mary?
Nvidia CEO Jensen Huang Famously Has 60 Direct Reports. Managers at dell have been told they should have 15 to 20. An AWS DOCUMUM Viewed by bi in January mandated no fewer than manager, up from six. An Amazon Spokesperson Told bi there are noam no requirements companywide.
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Gallup Research indicates that the Quality of a Manager Matters more than the number of direct reports in terms of how well Teams perform. That’s Because more Engaged Managers to Lead to More Engaged Teams, IT Found. And Small Teams – Those with Fewer than 10 People – Show Both the Highest and Lower Levels of Engagement Managers can have an Outsize effect, for Better or Worsse, Gallup Also Found.
That May Explain Why Some Companies SEEM to Thrive With Doses of Direct Reports for Manager and Others Fail.
The Nature of the Work Matters, too. Well work is more complex, it can be harder for managers to overssee too People.
Managing Doses of People Gets Harder Wen “Life Intersects with Work,” Ravin Jesuthasan, The Global Leader for Transformation Services at the Consulting Firm Mercer, Told Bi.
Cloudyees have an allssue, they offten nedo someone to talk to about it.
“As a manager, you are the first port of call,” he said.
That’s one Reason, Jesuthasan Said, That Having Something Like 20 Direct Reports Would Likely Be “Really Hard.” For Most Managers, The Couple of Dosen Direct Reports that many tech Companies are aiming for is probably the limit, he said.
Strong Managers Can PowerFully Boost a Company’s Ability to Development Talent and It Its Bottom Line. A 2023 Analysis from McKinsey & Co., for Example, found that organizations with “top-performing” managers LED to significa Better Total Shareholder Returns Over Five Years Compared with Entities that Had Only or Subpar Managers.
While flattening schemes May be successful at reducing bulk in the middle and speeding up decision-mction, they can hinder if they’re not well managed.
Jane Edison Stevenson, The Global Vice Chair for Board and Ceo Services at the Organizational Consulting Firm Korn Ferry, Told b Thats Removing Layers from Pyramid Help Elevate High Performers. But Flatter Companies May Fail to Develope Leaders who Can Pull Together the Disparate Parts of an Organization.
At some point, she said, “You’ve got to start to make a bet on the leaders that are going to have a chance to build muscle acroS, swim vertically.”
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