I was talking to someone the other day about how many people you can manage well. Experts say it is six, seven, or eight. My own experience confirms this. At times, I’ve had more than a dozen people reporting to me — and it wasn’t good. I was not able to stay on top of their work, and they knew it. The same holds true for meetings. You may have noticed that when you have more than eight people around a table, things get bogged down. Or if they don’t, what usually happens is that a small group takes over and the rest stay silent. That’s not a good thing.
There is a limit to how much attention you can pay to anything — and if you’ve divided your business into more than eight parts, it’s likely you are overly busy and behind. What you may do is spend a lot of time with three or four of them and ignore the others for long periods of time. If your people are ignored . . . or decide to stay silent . . . you are not doing the best job of managing them. You are not provoking them enough, not keeping a close enough eye on their performances, and not giving them the feedback and support they need to be successful. Doesn’t that make sense?
OK, then, heres the new idea: The reason businesses start to get loose and ungainly when the employee pool exceeds 50 (more or less) is because you can have a direct effect on only two generations of delegation. Let’s say you hire and develop seven superstars to run your business. Each of these seven knows your ideas, impulses, philosophies, and work habits. It almost doesn’t matter how you deal with them — whether, for example, you are organized or casual, or whether you hold meetings or just walk around to check on their progress. There is enough human contact so that everybody understands the mission and does his job well. The business grows. Each of your Magnificent Seven goes out and hires his own seven. That’s 56 total employees.
Things are busy, but its still, essentially, a mom-and-pop type of operation, because they all understand you and your Master Plan. All seven groups are linked directly to you through their managers, so slight differences in the way they operate don’t really matter. Everyone is towing the same line. But now your business needs to grow even more. You need to hire another 50 people. Now you have three generations of workers. The seven that report to you. The seven that report to each of your seven. And 50 that report to those that report to those that report to you. Now things are different. There is a lot of distance between you and those last 50 people. You may not even know their names.
To them, you are out of reach. And so they don’t try. You’ve got more than 100 employees and it no longer feels like the same old place. You are still the boss of your business, but it often feels as if your business is bossing you. Things seem bad because they are becoming bad. The extra 50 people you’ve hired can’t see, feel, or understand you. They are getting their clues from someone who has a different way of thinking than you have. And the difference can be such that though a new employee may get the job done, he has done it wrong (at least as far as you are concerned) if he has unknowingly violated a fundamental philosophy of yours.
This is the time a business has to change from being a “candy-store operation” to being something more “professional.” There’s no way to avoid it, no way around it. Although I’ve always hated anything that smelled of corporate culture, I remember just a few years ago when BB and I fought a losing battle against the introduction of a “human resources department” and a “job training program.” We eventually gave in, because these concepts were presented to us as being somehow necessary. And now, I think I understand why. So when your business starts to feel “too big” for you, count your employees.
If there are more than 50, you may have simply bumped into the inevitable. You now need professional management because you can’t run the business charismatically any more. There just isn’t enough charisma to bridge the gap. So accept the necessity for “growing up” and get behind it. You should still maintain the stamp of your personality on everything you can — your quality standards, your devotion to profits, your stinginess — but support the financial and other systems you need to keep things growing in a rational way. Move slowly, but move. You probably have no choice. Basically, its a matter of simple arithmetic.[Ed. Note. Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]