How Large Should Your Management Team Be?

When someone asks me the question 'How many people should typically be in a senior management team?' or some variant thereof, it generally seems to mean that they already have a point of view for which they want to find a justification. Either they think that the team is too large, or they want to argue the case for enlarging it. Why is this almost always true? Because the people asking the questions are, by and large, smart and experienced executives, and with a moment of thought they will know that the answer is a huge 'It depends'.

The problem is that any benchmarking data you find will almost certainly come with so many hedges that it raises far more questions than it answers. The hedges will require you to answer questions such as: what kind of business are you in, are you global, what scale of revenues/ profits are you managing, how many employees are there, how complex is your business model, etcetera, etcetera. Even after taking into account these variables, you will find that the variance across different companies is substantial. So, the best you can hope for is that you will land on a range that is so wide that it allows you to be happy with any answer that you choose to come up with.

So, if my initial contention is correct, the response to the question of team size should be 'What do you want the answer to be?'. This, of course, will not get you far, but it does save a lot of time if you know what you want to do regardless of any alternative possibilities. The more appropriate question would be 'What problem are you trying to solve?'. The real point here is that you should figure out what you need in order to get the work of the company done, minimize organizational inefficiencies, provide roles for the talent you want to keep at that level, and reflect your organizational values. This should be done through some serious internal analysis and thought, rather than relying on any false confidence provided by an external and relatively superficial rule of thumb.

In any case, whatever benchmark data you see will still leave you with some serious analysis and thinking to do. So, if my experience is anything to go by, you should save yourself the embarasment of generating (or paying for) a lot of data that will be ignored once you get past the 'Hmm, that's fascinating, but what does it tell us….' phase.

Having said all this, for those who still hanker after the data, some useful work was done by Ashridge Strategic Management Centre (UK) in 2000. Also, the Saratoga Institute is often used as a source. And, fear not, there are many more sources out there for those that enjoy the journey at least as much as the arrival.