Seven Layers for an organisation
Organisational layers
Organisations are like living organisms. They have to grow , they have be healthy and they also need to be contended – if not happy.
Like any living organism, the product life cycle has been described by many experts. What is important is that product life cycle should not be organisation's life cycle. The organisation can be compared to a farm, where the product can be plants.
Obviously, the organisation layers have to have their grouping on the function – and the overall performance would depend on effectiveness of the layers.
Grouping of the layers
The organisation can be grouped into three levels, namely Task, Operation and Functional.
The Task level work is done by people with minimal freedom – and have to follow the instructions to the Hilt. Everything is standardised at this level of work. This type of work constitutes the bottom of the pyramid.
The operational levels are those, where some flexibility of decision making is allowed. However, all the decision making would be based on strict guidelines and restrictions. This level constitutes the the middle of the organisational Pyramid.
The next group is the functional group. This group is responsible for decisions when things are not “normal” and also to counter the change in external circumstances. Thus, the functional group has to have larger amount of freedom in decision making – the boundaries widening and changing from Manager to Director to Visionary
All the groups and the layers are important for the organisation, for growth and scaling up. The bottom layers determine the ability to deliver product / services [combined with capital in production machinery] , the middle layer ensures that the quality [specifications and time] are met and the top layer determines the profitability and growth.
While the some of the layers could be handled by same persons, the effectiveness would come down drastically. This affects the growth and profitability. After discussing the layers and little more detail, we can analyse the effect of absence of any single layer.
Layer wise skill, knowledge and responsibility
The vertical structure is the informal 7 layers [link], based on the level of function - operation which is as follows:
Sl no | Layer | Time span of planning | Level | Responsibility | Remarks |
1 | Task level | Work on instructions – no planning | Task – no decision making | To complete allocated work for the day | Day to day instructions may be required |
2 | First level supervision | Day to day planning – One day in advance | Operational -1 preset guidelines for decision making | To complete the allocated work for the day and plan for next day's work. Preparatory work is also the responsibility | If instructions to task level is passed on a day in advance, productivity would be better. By proper planning, should also be able to work for 75% time |
3 | Top supervision | Weekly planning – two week firm and two weeks tentative. | Operational -2 preset guidelines with limited discretion | Weekly schedule to be passed on to the next level well in advance. Guide Re allocate work in case of emergency / crisis. the main job is to escalate potential problems, before they turn into real problems | Should plan to do direct high skilled work for at least 75% of the time. |
4 | Lower management | Weekly monitoring and 3 months planning | Functional -1 – responsibility with limited boundary | To ensure availability of resources , co-ordination and do monthly planning | By proper system, to do routine only for 50% time. understand other department’s functions for co-ordinating with lateral departments |
5 | Middle management | 3 months to one year | Functional – 2. Responsibility with wider boundary | To “manage” to keep the production /services steady – ensure three months plan is properly executed. Must split the 3 year plan to yearly and quarterly plans. | Must be able to be proactive – 50% of the time for improvement of systems and balance for long term intangible assets in terms of organisational knowledge |
6 | Top Management | 1- 3 years | Functional -3. Responsibility with maximum boundary | To ensure that ALL sections /departments of the organisation have balanced capabilities – and achievements. Formulate three year plan in co-ordination with 20 year vision. | Essential to balance between Personnel / infrastructure and finance. Must make sure that sufficient finance is available for long term plans after ensuring short term survival. |
7 | Top directional | 3 to 20 years | Strategy and course correction, with directional responsibility | To be able to understand the present and the future – and give directions for long term plan. Should ensure that the long term plan is aligned with medium term and anticipate disruptions for change in course. | Visionary – To be able to dream and understand the concept of “feet in the ground and head in the sky” |
With high skill in planning and “police less” culture by self accountability / Intrpreunership, no of layers can be merged – but the responsibilities cannot be split across the layers.
Knowledge and skill for different layers
1. Task level
At this level, all knowledge is from training. They are to be trained for repeated specific work. They are expected to be very clear about “what” and “how” . The emphasis on numbers with “acceptable quality”
Some of the unskilled workers may move on to become skilled and also as supervisors.
Skilled workers who either have specific general skill sets [fitting, turning , welding etc.,] or have grown from “in company” training to understand more about “How” and have sufficient knowledge for tackling “abnormal” situation and also to carry out “trouble shooting” - The regular maintenance crew or “setters” would also be part of this layer. They are expected to have less supervision.
2. First level supervision
While one would expect everything to proceed as “clockwork”, in real life this never happens. Ths, we need someone to ensure that things do go on smoothly – day after day. If the system is very good, then the worker : supervisor ratio can be large and the supervisor can also double as “high skilled” worker.
However, when the system is unstable, we need more supervisors for the same number of workers. These supervisors have basic understanding of the skills required by the worker [may not possess the skills – though high or specialised skill set is preferred]
The supervisor is expected to have “human” skills to get the best out of the workers an also the ability to identify the potential problems very early and both prevent them and also escalate. Should be accountable to deliver quantity of acceptable quality.
Ability to merge the first level and second level supervision can increase the productivity drastically.
3. Top supervision
Floor manager is expected to split the monthly plan into weekly and daily plan – and ensure that whatever preparatory work required for future production is taken care well in time. The floor manager should be aware of the sequence of both production and management process – the time required for each of the process. One of the main knowledge base would be “know what can go wrong” - and ensure that these are factored into planning.
Should be able to balance between “safe planning” to “just in time”. More importantly, the ability to juggle between alternate plans to ensure proper utilisation of resources would be very desirable.
4. Lower management
These are Section Managers / departmental heads or general managers looking after more than a single department.
These form the second and the top most level of “operation” managers. These are responsible for detailed planning of resources – based on the directions from the policy head. In smaller organisation, the Policy-head would be in-charge of number of sections – while in larger organisations, could head just one or two section.
It is the responsibility of the operational heads to estimate the resources for one year or longer, co-ordinate with other managers to get those resources. It is to be noted that getting resources, including finance is the responsibility at this layer.
The most important requirement at this level is to come out with “practical” solutions for either raising resources or to manage with available resources.
It is also the duty of this layer to escalate possible problems – months in advance – to the functional layers.
The effectiveness of this layer is the most important factor for the profitable survival of the company.
5. Middle management
These could be senior general managers both operation and support functions. They are also required to be a part of converting thee vision of the top management
This layer has two primary functions.
1. Ensure that all problems of the operational layer is promptly handled to ensure profitable operation.
2. To formulate and tweak various policies for human resources, stake holder's relationship networking with other industries and following government policies for both taking advantage and for statutory compliance.
They need to work very closely with the directors to understand the “directions” the company is expected to take in the next 3 to 5 years and break down the plan to single year for implementation.
The person in this layer is expected to possess excellent management skills with analytical and wide general knowledge. Domain knowledge can be an advantage
6. Top management
This is the second level of functional, having very high degree of freedom. This layer is expected to understand the 5 to 20 year direction of the visionary – split this into 3 to 5 year plan. Also This layer is expected to convert the vision into policy for the operational layers to execute properly.
The importance of this layer is to be able to watch and monitor the work of the other layers without getting into day to day affairs – enabling one to collect all relevant information of the ecosystem – the market, competitors, technology progress, government, international relationship etc., and give guidelines to the general managers.
This layer is also responsible to gget the right persons and keep them motivated for ensuring the growth of the organisation. This layer is essentially responsible for high growth rates – compared to “organic growth” which happens in many industries.
7. Top Management - Visionary – Thinker planner
This layer of the people are the ones who lay the foundation for great organisations – but they are like the proverbial “1” of the large numbers – and are nearly worthless without the “trailing Zeros”. Any organisation could start, survive and grow without this layer – only that they may not become great.
It is advisable to have this layer by encouraging one of the promoters to become a dreamer and peep at “20 years from now” - and logically connect the dream with the present. This would work, only when the next layers are very strong. When the visionary is nt available, this layer gets merged with the previous layer and the organisation works within the limitation of boundaries set by the board
Summary
Any organisation has to be built on the strengths of the bottom. Consider an organisation as a pyramid – Imagine what would happen if the top is bigger than the bottom. Considering more than 90% of any profitable business is routine, we must have more than 90% of people doing routine.
An organisation which does not have good operational layer and very small task level persons, would earn just a little more than what the operational level salaried person would – If they are lucky.
A company with a saleable service or a product would make profit and grow at a pace allowed by market demand, provided they have competent operational level managers. The profitability and fast growth would be affected by lack of higher layers.
Thus, it is very important to have bottom of the pyramid built first – especially if there is even a remote chance of having someone in the team capable of filling 6th or 7th layers.