In his review of thousands of org charts, serial acquirer Brad Jacobs flags managers with only one direct report as a key indicator of organizational bloat. He calls this "companionship" rather than management, highlighting it as an inefficient layer that slows communication, adds cost, and ultimately harms shareholder value.
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Companies mistakenly bundle management with authority, forcing top performers onto a management track to gain influence. Separate them. Define management's role as coordination and context-sharing, allowing senior individual contributors to drive decisions without managing people.
Work expands to fill time, and organizations expand to fill available work. People instinctively want to hire direct reports to increase their status, creating a supply of labor that then invents low-value tasks to justify its existence, leading to bloat and inefficiency.
Alex Bouaziz eschews traditional management structures like weekly 1-on-1s and performance reviews for his 20+ direct reports. Instead, he relies on a continuous, high-frequency feedback loop through daily, informal communication. His role is to enable his leaders by constantly asking what's broken and how he can help, rather than following a rigid cadence.
According to the 'dark side' of Metcalfe's Law, each new team member exponentially increases the number of communication channels. This hidden cost of complexity often outweighs the added capacity, leading to more miscommunication and lost information. Improving operational efficiency is often a better first step than hiring.
As an organization scales, some leaders become skilled at managing up while being poor managers to their teams. Executives must conduct regular skip-level meetings with frontline employees to get direct, unfiltered feedback and catch these bad behaviors that would otherwise be hidden.
Parkinson's Law suggests bureaucracy naturally grows 5-7% annually. To combat this, leaders can measure a "Bureaucracy Mass Index" by tracking wait times and useless activities. This metric turns the fight against bloat into a manageable, health-like goal.
Jensen Huang maintains an extremely flat organization with around 60 direct reports and no one-on-one meetings. This unconventional structure is designed to accelerate information travel, empower senior leaders, and weed out those who can't operate without direct guidance.
Brad Jacobs designs org charts based on the optimal structure for achieving goals, defining necessary roles first. He resists shaping the chart around existing employees and their "fiefdoms." This role-first approach means leaving a seat empty is preferable to filling it with a poor fit, ensuring the structure dictates personnel, not the other way around.
To avoid bureaucratic bloat, organize the company into small, self-sufficient "pods" of no more than 10 people. Each pod owns a specific problem and includes all necessary roles. Performance is judged solely on the pod's impact, mimicking an early-stage startup's focus.
In many companies, the roles of first and second-line sales leaders are blurred, with the second-line manager acting as just another first-line manager. This creates redundancy, causing reps to get the same questions from both and signaling a lack of communication and clear responsibility.
