Thursday, May 15, 2008

Span of (out of) Control

There is a potential flaw in your Span of Control (SOC). Now this does not usually effect start-ups, but at some point in time companies are no longer lean and mean. Their span of control has grown both vertically and horizontally (as expected) to manage their growth in products/offerings, sales,user base and the staff needed to manage same. At some point this span of control breaks down, and the fast turning cogs slow to a crawl. This might be due to economic factors, competitive factors or other outside factors. We hear it loud and clear when in recession, calls of across the board job cuts of 5%,10% or even 15%. Other times, the cogs slow due to factors within the corporation, and specifically as it relates to your SOC, and how you manage it.

So as a hypothetical example, Cogswell's Cogs has a staff of Marketing,Sales, Business Development and Channel executives. Each dept. has their own SOC and all of these departments are part of yet an even larger corporate SOC. In marketing as example, you have your Executive Vice President of Marketing, Vice President of Marketing, Managing Director of Marketing, Marketing manager, assistant marketing manager, etc. For the corporate SOC you have your EVP of marketing, EVP sales, EVP Global sales, EVP GLobal Marketing, EVP Business Development, EVP of Channel sales, etc. ... already seeing the mess, right (and we're only talking about the upper layers right now!).

Lets now examine a SOC from the bottom up. Inside Sales, reports to Sales manager, Who in turn reports to the East Coast Sales Manager, Who reports to the National Sales manager, who reports to the VP of sales, who then reports to the EVP of sales, eventually reporting to the CEO. So what's wrong here, after all a CEO needs to be insulated from all these layers don't they? WRONG! and this is where your SOC is broken. SOCS need to be multi-directional.

Johny is somewhere in the middle of a SOC. He is the Director of Strategic sales at Cogswell Cogs. He reports directly in his SOC to Henry, the Managing Director of Marketing. Johny is not making his numbers because even though he has successfully lined up, and signed up partners there is a breakdown with one of the Sales Engineers (SE), yet part of another SOC! In order to get the partner up and running, they need to be trained on how to use Cogswell's cog. The problem? David, the Director of SE's is a golfing (drinking?) buddy of Henry...remember now Henry and David are best buds... and so in a functional SOC Johny should be able to reach out to the SE, and when unresponsive reach out to the SE's boss who should remedy the breakdown. But what happens when Henry, the SE's boss is also incompetent, or just unresponsive? Johny can only go so far up his SOC before he is though of as a troublemaker, or a complainer. More often then not, the Johny's of this world (usually the MOST competent of your employees) become disenfranchised, and move on to a different Cog manufacturer, where their SOC team is more functional.

So how can you protect your SOC's? Management needs to have a venue available whereby anyone in a SOC can communicate with anyone else, from a Cold Caller, to the CEO. It is one thing to tell a guy doing inside sales, that he can feel free to use this "open structure" to offer his suggestions, and gripes. It is another for it to actually take place (are you going to go over your bosses head and risk being out of a job??). Make your open structure anonymous, monitor it directly (EVERYONE in the org.), and encourage its use.

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