Situation: A young company has been growing rapidly but hasn’t been growing its infrastructure to support its growth. The CEO now has fifteen direct reports. Things are getting hectic and the CEO wonders whether it’s time to make a change. How many direct reports is too many?

Advice from the CEOs:

• It is generally accepted that the largest number of direct reports that an individual can successfully manage is ten. Beyond this and even at this number, if the reports require significant supervision it is difficult to meet the needs of the individuals and to effectively direct their multiple activities.
• The maximum number of individuals that you can manage depends upon what you are managing.
  • If the individuals are very independent, then perhaps ten can be managed.
  • If the individuals require any significant levels of supervision and/or training, the number goes down rapidly.
• This is both a challenge and an opportunity. The challenge is determining the right number of reports for the CEO to manage. The benefit is the opportunity to start building a management team.
• The benefit will be that by adding managers reporting to the CEO, there is the opportunity to train individuals who can take on additional managerial responsibilities in the future. As the company continues to expand this will become critical to future growth.
• Another benefit is the ability to divide responsibilities among the teams.
  • For example, one team becomes the sales team, a second the Client Services team, and a third becomes the back-office operations team.
  • As the company expands, there is the opportunity to add additional subgroups to the sales and client service teams. simultaneously serviced by the existing back-office operations team.

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