Encyclopedia of Leadership

4.2

HIERARCHY: LEADERSHIP LEVELS

IN AN ORGANIZATION

Inspired by Peter Drucker, Elliot Jaques, and Peter Senge.

These days, it seems a little out of fashion to say hierarchyand leadershipin the same sentence.

Yet management hierarchies remain at the heart of most organizations. As Peter Senge notes,

“There are some people who say the future organization is going to have no hierarchy. I don’t

agree.” Peter Drucker is even blunter: “...One hears today about ‘the end of hierarchy.’ This is

blatant nonsense. In any institution there has to be a final authority, that is, a ‘boss’—some-

one who can make the final decision and who can expect to be obeyed.” This tool provides a

practical model to help you consider hierarchical levels and spans of control.

Maverick organizational theorist Elliot Jaques argues that the more senior the leader, the

longer the time span (the farther into the future) he or she is responsible for managing. For

example:

➠ A retail chain store, frontline junior salesperson’s time span is from here-and-now cus-

tomer service to perhaps a few weeks into the future, depending on the store’s reorder-

ing cycle.

➠ The chain store manager’s time perspective may range from here-and-now decisions to

a time span beyond next season’s promotion plan and the annual lease renewal.

➠ The chain store CEO must be looking several years ahead to plan the direction and

focus of the organization in the changing business environment.

Jaques argues that the longer the time perspective that the individual is responsible for, the

higher the leadership level, and the more the individual should be rewarded. In Jaques’ words,

“Time-span measurement of a leadership role requires nothing more than eliciting the assign-

ments which a manager is putting into that role, and sorting out those tasks or task sequences

with the longest target completion time.” Extending Jaques’ time-based model, Peter Senge

argues that the justification for hierarchy is breadth. This ladder notion concerns understand-

ing and dealing with the impacts of decisions within organizations.

Here is a broad-brush matrix combining organizational level with time and breadth per-

spectives.

SECTION 4 TOOLS FORDESIGNINGPRODUCTIVEPROCESSES ANDORGANIZATIONS 105

Senior executive

Vice president

Organizational Time perspective

level required Breadth perspective required

Must look 10 or more years

ahead to assess the impact of

decisions.

Must look ahead from 3 to 10

years.

Must look at the broad system and wide impacts (internal

and external) of decisions—on business, society, competitors,

workforce, and so on.

Must keep organization healthy in its wider environment.

Must understand and deal with all impacts and influences

inside and outside the organization.