Recent reports of the Police having to take yet another long hard stare at their resource in the back office and on the front line is just the latest high profile example of on-going attempts to reduce the staffing of an organization in a bid to save money. Though most people accept that in these difficult economic times, cuts need to be made, it’s the seemingly clumsy way these cuts manifest that cause the most anguish.



These organizations found hacking away at front line services are not bloody-minded; rather, they believe they have exhausted internal restructuring, have no budget identified to embark on a consultancy exercise and have nowhere else to go, says Tim Harding, Director at Optimized Work Levels (OWL) Professional. The real issue is that many of these organizations are carrying too many layers of management, which is costing them dearly in all sorts of ways.



This presents individual consultants or smaller consulting firms with a unique value-added service opportunity to use technology to remove the barriers to entry and to quickly and cost-effectively identify where in an organization problem areas and weak links lie.

It’s all too easy for organizations to close whole departments to take cost out, so no wonder widespread austerity drives are having a direct effect on vital front-line services. This is happening across both the public and private sectors, leaving the public up in arms about the closure of swimming pools, libraries, and branches of banks or local shops, and in dismay as their employers seemingly slash with an axe, rather than fine cut with a scalpel. “But what choice do we have,” managers sigh, fully believing they have already made any other cuts that might be less painful.

Yet the chances are they have a lot more room for manoeuvre than they imagine – especially if they are operating with too many layers of management.

Then there are the private enterprises that have failed to attract bank funding in support of company mergers, despite arguing that the leaner, blended organization will operate much more efficiently and profitably. They know this ought to be possible, yet what they lack is precise knowledge of where and how those efficiencies will be achieved without hurting the surviving business.

Tesco value

In his exit speech, Sir Terry Leahy, the outgoing chief executive of Tesco, attributed the company’s remarkable success to the efficiency of a company restricted to no more than six layers of management. By reporting upwards, rather than sideways, managers are kept closely aligned with company strategy, so that the enterprise functions as a tight ship.

Similarly, Unilever, which embraced a lean management structure long before Tesco, credits the approach with many of the company’s achievements. At Unilever, the culture extends right across the entire group, so that there are never more than 7-8 layers of management in any slice of the multi-national organization, from the field or the lab to the boardroom.

The rewards of de-layering can be significant. When Staffordshire County Council removed 80 manager posts, it generated savings of £1.2 million in a single financial year, while London Borough of Hounslow reports £23.6 million savings from revising its management structure along similar lines.

The consultancy drain

For the majority, however, getting to this point has been unimaginable, because of the perceived consultancy investment required if following the traditional approach to consulting.

While it is accepted wisdom that organizations inflated with too many middle managers are inefficient in all sorts of ways – slow to make decisions, expensive to run, lacking in dynamism, vulnerable to internal back-biting and poor motivation – progressing this vague knowledge to hard facts and an actionable solution can be extremely difficult. Not to mention expensive, if external consultants have to be drafted in to determine where the guillotine should fall.

Analysing the work level of every role under review in sufficient detail has traditionally meant running up fees of hundreds of thousands of pounds in consultancy fees, even before implementing a solution.

The alternative has been to risk taking out poor-performing individuals or those about to retire, rather than removing superfluous roles, leaving organizations in a difficult position in the longer term.

Yet, this presents individual consultants or smaller consulting firms with a unique value-added service opportunity to use technology to remove the barriers to entry and to quickly and cost-effectively identify where in an organization problem areas and weak links lie.

DIY assessments

Helping managers to assess the configuration of their own organizations, in as dispassionate a way as possible, is a far better solution. Simple yet sophisticated, web-based tools, using scientific management principles, exist now that can help reduce the initial investigatory exercise from a period of months to weeks, and by a factor 10 times cheaper, offering consultants a highly attractive engagement model that delivers results quickly and cost-effectively.

Consultants can enable managers to plot their own hierarchical structures and see where inefficiencies might lie - where overlap exists, and where job roles are reporting sideways rather than upwards, creating excessive numbers of stages within the reporting and decision-making matrix – and then use their specialist expertise in a very focused way to help implement positive business change.

Doing this vital groundwork gives directors and senior HR managers enough of the evidence they need to support radical restructuring plans and redundancy programmes, and/or recommitment to, or new investment in, other areas of the business.

It is far better for organizations to have 80% of the answer today, than 100% of the solution six months down the line - or never. What’s more, with greater control over the review process, organizations can try out and play around with new structures before committing to the final configuration.

By showing organizations where to focus any managerial restructuring, by layer and by role, the consultant can quickly and effectively help make transformational change plans tangible and specific. In addition to eliminating the need for costly and time-consuming consultancy projects, conducting this simple ‘rough-cut’ analysis gives directors a powerful tool to justify and gain support for hard decisions and big demands.