Human society has long had a fascination with large human enterprises. Complex governmental systems, with ministers and sub-ministers, seem to appear in the literature of each civilization (at least the few I have sampled). Confucius's Analects are largely about how to properly govern. Those nine rings of Dante's Inferno don't just run themselves, but clearly have a hierarchy of devils managing them. Throughout history, churches, governments and the military have had organized systems of managers and sub-managers. While these are often the bane of our existence, we do occasionally get such joys as the novel Catch-22 or the movie Brazil -- and the terrors of 1984. (Does some professor somewhere teach a course in the Literature of Bureaucracy?)
According to the few sources I have read, modern corporate bureaucracy can largely trace its origins to the boom of railroads in the mid-1800's. Railroads required organization, or at a minimum freight would rot in the wrong place and at worst expensive rolling stock would be destroyed in collisions (the loss of the passengers & crew being not much concern of the railroad barons). Many of the American railroads were run, particularly after the American Civil War, by men with strong military experience, and so organized structures grew. And grew. And grew.
The Wall Street Journal carries an item (which, as the one silver lining to the Murdoch takeover, is free) that a key focus of Novartis' announced job cuts is to eliminate bureaucracy. Dr. Vasella, the CEO, was shocked (shocked!) that a mid-level manager in one Novartis division had 6 levels of employees below him, and believes this is too many.
I used to joke at Millennium that I was routinely being demoted. This was obviously so, as the number of people between myself and Mark Levin kept growing. When I joined, around 250 employees, there were two people interposed, but at times it was at least four or five. I reported to a group leader, who reported to the informatics head, who reported to the technology head, who reported to the CSO, who reported to Mark. At various times the higher levels would shift, but like the beach which does the same it rarely changed my routine existence. We'd get invited to different meetings, my impertinent emails would irritate different superiors, but overall it took some digging to find the real changes -- and by the time you did, the next reorganization would be upon us.
Six levels at first glance seems like a lot. If each manager had 10 reports, then that's a million employees, right? Much more than the employment of Novartis (calculated from another report at around 100K. Vasella has apparently decreed that no division shall have more than six layers of reporting (hmm, with a few layers at HQ, that would be how many levels total? :-). Suffering from the sclerotic plaques of bureaucracy? Apply the statin of restructuring!
I'm no fan of bureaucracy -- I have a particular talent for botching official forms -- but I hope that Vasella & his staff think carefully about the unintended side-effects of such a crusade. Too many layers stifle innovation. But too few may have consequences as well.
My jaundiced history of corporate organization leaves out some of the other drivers of layers. Yes, 6 layers should be sufficient to support 1 million employees -- if each manager has precisely 10 reports. Even that many is too many for some Human Resource experts' tastes, but more importantly sometimes a manager should have fewer. Someone might be a great manager of three but horrible at seven. Or you do really need 3 mass spectroscopists managed by one senior one -- but that's it. Also, some layers of management are a way to train & retain valued employees.
At first thought, the main danger of a blanket edict is that the organization will adjusted to fit the management dictum, not the other way round. Procrustes as organizational expert. While that is certainly not a foreign mode of operation for large companies, it is hardly what you want to encourage! Second, the organization will be stifled in new ways: sorry, we can't enlarge this successful organization without blowing it up, as we've hit our depth chart limit. Furthermore, the asterisks are likely to start rolling out -- and with them additional warpings of the original goal. Summer interns -- they don't count. Full-time contractors -- nah. Outsourcing -- well, of course not! And as routes to avoid limits are found, they will be used -- whether they make overall sense or not.
Is there an alternative? It's hard to say. Like most management mantras this paring, if applied judiciously, might be a good thing. Loosening up rules to minimize how far purchasing requests must percolate upwards are good. Identifying where additional layers are not adding expertise but only inertia is good -- but inertia tends to be in the eye of the beholder (or perhaps, bestopper). Legal requires such as Sarbane-Oxley don't exactly encourage a free hand either -- the shareholders like to know how you're spending their money, and if not them then Capitol Hill.
Of course, one solution is to work in a very small company. Then there can't be too many layers between you and the top, unless the company has a completely linear organizational structure! That's not to say that small companies don't face the same human & informational challenges or solve them easily, but too many layers of managers tends to be low on the worry list.