Structure at the top
The structure at the top of the world’s leading companies is changing: CEOs have doubled their span of control over the past two decades and functional leaders account for 80 percent of the increase in positions reporting to the CEO. Furthermore, as a way to further their professional development, executives are often asked to “double hat” functional and general manager roles.
This changing structure at the top is, in many respects, a response to changes in the environment in which many firms operate. Increased geographical and market complexities demand new points of view in the top team. Strong functional leaders allow companies to build the essential firm-wide capabilities they need to outperform.
What is your target span of control? This diagnostic tool allows you, in just three minutes, to get a sense of the target number of direct reports based on your current leadership situation.
Every year, Strategy& takes an intensive look at CEO successions among the world’s top 2,500 public companies. Our research now reaches back to 2000, giving us nearly 15 years of perspective on who’s leaving the chief executive’s chair and who’s coming in.
This article by Strategy&’s Gary Neilson and Harvard Business School Associate Professor Julie Wulf, published in the April 2012 issue of the Harvard Business Review, looks at the logical evolution of a CEO’s span of control and offers advice for managers as they progress in their careers.
Sustainable, superior returns accrue to companies that focus on what they do best. The truth is that simple, and yet it’s incredibly hard to internalize. It is the rare company indeed that focuses on “what we do better than anyone” in making every operating decision across every business unit and product line.