How many layers of management does your organization have?
Novartis CEO Daniel Vasella announced today that he plans a general rule of a maximum of six layers from shop floor operator to the head of one of the four divisions. Novartis has 98,000 employees delivering almost $40 billion in sales.
The changes at Novartis would come on top of some job cuts and management changes the company laid out in October, when it reported disappointing third-quarter earnings. Dr. Vasella said he has continued scrutinizing the organization since then and is looking to remove several layers of management, with the main goal of positioning employees to make decisions more quickly and simply.
It’s a laudable goal, and incredible agility can result from employees empowered… and trained… to make decisions. But it’s not quite as easy as simply "positioning." The flatter the organization the more important it is to have "the right people on the bus, and in the right seats" (apologies to Jim Collins). That requires improved recruiting, retention, training, and inherent leadership ability.
And in the spirit of being flat and concise… I’ll keep this brief!