How Long Is Your Company's Chain of Command?

William Craig Contributor

culled from:http://www.forbes.com
The phrase “chain of command,” for most people, probably evokes military imagery. This is unfortunate, because it perpetuates the idea that leadership—any kind of leadership, really—is by definition restrictive or draconian. Let’s face it: the word command is a bit off-putting, especially in a business environment.
That’s why I prefer the phrase “leadership levels.” Maybe it’s a pointless semantic exercise, but I think it better represents what you’re really trying to create: an effective system for tracing leadership and responsibility through an organization—not a way to rigidly enforce order.
It’s pretty simple, really: with very few exceptions, companies perform better when their chains of command—or their leadership levels—are shorter. The reasons might be self-evident, but some of them have surprising psychological components that could go a long way toward properly diagnosing why your company might not be as agile as it used to be.
Slow Decision Process
Navigating a chain of command is a little like playing a game of telephone: both the words and their intentions tend to get slightly more warped each time they’re repeated.
The owner of a small business resides at the top leadership level—the end of the chain, as it were. He or she is ultimately responsible for making the big decisions that will shape the future of the company. Communications from top leadership filter down through each leadership level until it reaches the employees at the bottom.

But this also works in reverse: when a decision needs to be made by a low- or mid-level manager, a lot of time gets wasted seeking permission from each of the higher tiers of leadership. It can make the difference between, for example, being empowered to pursue a new business opportunity and being forced to wait until it’s too late.

The problem with leadership levels isn’t that they exist, but that the leaders within them are often not empowered to make certain time-sensitive decisions without oversight, red tape, and a lot of wasted time.

Diffusion of Responsibility
A sociopsychological theory called diffusion of responsibility might go a long way toward explaining why long chains of command are ineffective. The short version of the theory is that people are less likely to take action or responsibility when other people are present. The perception is that, since many other people are involved in a given process, somebody else will always take charge of a situation, make a decision, or come up with a better way to do something. For large companies, this can be crippling.
But in a business environment, this isn’t just a perceived phenomenon; it may actually be a deliberately constructed one. Many companies tend to concentrate leadership at the top of company organization, and this creates all kinds of barriers to progress. For example, employees may be less likely to take risks or make suggestions if they have to run it all the way up the chain of command. The unfortunate assumption probably goes something like this: Since I’m at the bottom of the totem pole, there’s a good chance that somebody above me has already thought of this.
It’s a motivation problem, and it can sometimes be built right into a company’s very DNA.
Spheres of Influence
It’s actually no secret why the phrase chain of command sounds militaristic; it’s actually a holdover from turn-of-the-century France—the invention of a mining engineer whose theories of management found their way into the corporate world in a big way after World War II. It was probably a good thing, too; veterans returning from foreign wars were re-entering the work force en masse, and likely benefited from a familiar type of leadership structure. And it’s still happening today: veterans from our wars in Afghanistan and Iraq are making the transition from military to civilian life every day, and it can be a difficult road.

Nevertheless: the fact that the chain of command is still so widely used is a testament to the glacial speed at which management techniques change over time.

In today’s economy, the thing that decides success, more than anything, is knowledge. In fact, what leadership levels are designed to delineate is not authority, but knowledge. And in our knowledge-based economy, it just makes sense to abandon the consolidation of authority in favor or smaller and more agile leadership levels, where as much latitude as possible is given to individual employees to achieve thought leadership in their particular area of specialization.

• So to make your own company’s leadership levels scalable, sharing responsibility is a must. Think of it as a way to create smaller-scale “spheres of influence,” where lower-level managers and employees are given a measure of authority over an area that they have shown a particular skill (and interest) in executing.
  What the Agile Business Looks Like
  Whether you call it the “chain of command” or “leadership levels,” the intention is the same: you’re building a company structure that’s both agile and scalable. Nevertheless, we can probably agree that the chain imagery is starting to feel a little bit antiquated.
  What we need to build is not a chain, but a web: individual strands all linked together in subtle but deliberate ways, united in common cause. When you consider that one of the guiding principles behind modern business organization is almost 100 years old, you start thinking that maybe there’s a better way.
  
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