The new CEO at BP is shaking things up, or perhaps better said, taking things out. CNNMoney.com quotes Tony Hayward in BP Shares sinks as CE0 warns on results: "'There is massive duplication and lack of clarity of who does what,'" the [Financial Times] quoted Hayward as saying. "'We will reduce the number of organization units. (We) will reduce the number of layers from the workers up to the CEO from 11 to about seven.'"
Is that the right number, Mr. Hayward? How do you know what the right number is? Using OrgScope, we found 11 levels at one of the energy giant's competitors--and its shares are not sinking.
How do you determine the right number of levels in an organization the size of BP, with in the neighborhood of 100K employees and perhaps 10x that number more in contractors? What number allows the chief executive and senior leaders to "spot weaknesses and areas for improvement," as one energy executive said to us.
The deeper question here is not about a target number of levels but about whether the structure optimizes strategy.