Too many direct reports

If you ask a practice owner how many people report directly to them, you’ll usually get one of two responses. 

They will either give you a number that surprises them when they say it out loud or they will pause while they try to work it out.

Both responses indicate a deeper underlying issue.

In organisational management, the term ‘span of control’ refers to the number of direct reports a leader is responsible for managing. 

Although it is one of the most studied variables in organisational design across many disciplines, I find in my work with practices around Australia that it is seldom discussed in allied health private practice. 

Yet for practice owners navigating the challenges of practice growth, it can be among the most important structural levers available to them.

Most growing practices don’t have a leadership problem or people issue but rather the underlying driver is a span of control problem. 

And no amount of hiring or training will fully resolve this bottleneck until the underlying structure is properly addressed.

How span of control develops

In the early stages of a practice, it is common and appropriate for the owner to have a wide span of control. 

When a practice has three or four team members, the owner will naturally manage everyone. 

Channels of communication are simple and direct, decisions are made quickly and the owner is able to maintain a clear picture of everything happening within their practice.

But as the practice continues to grow, that picture becomes harder to hold. 

Every new clinician or administration team member attaches another line of direct responsibility to the owner. 

A practice that has grown to 12 or 15 team members can easily find that the owner is managing eight, 10 or even 12 direct reports, all while still maintaining a clinical case load of their own.

This expansion of lines of responsibility to the owner often happens gradually and without intentional design. 

A new graduate is brought on board and naturally looks to the owner for guidance and clinical support. 

An admin role is added to maintain the level of customer service to the growing client base and the new team member is automatically added to the owner’s reporting structure. 

A senior clinician begins to take on some leadership responsibilities within the practice but still defers most decisions back to the owner. 

In isolation, each of these scenarios illustrates a reasonable response to an immediate need within the practice. 

But taken collectively in a growing practice, they result in a structure that is unsustainable in the long term.

Why a wide span creates specific problems

Current research in organisational management consistently identifies the optimal span of control for complex, judgement-based work environments, which perfectly describes a private practice, as five or fewer direct reports. 

Beyond this threshold, the quality of leadership and oversight that any one person can realistically provide begins to diminish, not because of capacity or capability but because of the mathematical reality of attention.

To contextualise this, consider what genuine and quality leadership and oversight of a direct report actually requires: regular and consistent one-on-one time, meaningful mentoring, clear performance feedback mechanisms and general availability to support the team member when needed. 

If you multiply that across 10 direct reports while also managing a clinical case load yourself, the numbers simply don’t work.

Something will always have to give and unfortunately, in most practices, it is the quality of leadership that is the first to go.

The downstream effects of a diminishing quality of leadership are predictable and worth understanding clearly. 

Without adequate support and clear lines of decision authority, team members will default to escalating everything back to the owner. 

Questions that should be answered independently are pushed back onto the owner to field. 

Operational issues that should be dealt with at the team level balloon to much larger problems because they sit unresolved.

Mentoring conversations that should happen at a regular cadence get pushed back because of so many other competing priorities.

Amid all this, the owner inevitably finds themselves becoming increasingly reactive. 

Their day to day is filled with questions, approvals, minor issues and ‘quick’ check-ins, while the space for strategic thinking and working on their business shrinks. 

And despite their genuine leadership efforts and likely increased hours, the owner starts to feel like they are running hard but getting nowhere fast.

Span of control and decision-making

Another, more subtle consequence of a leader having too wide a span of control is its effect on the quality of decision-making within a practice. 

When the owner is the cornerstone of decision-making for too many people, two things occur simultaneously.

First, the owner’s own decision-making process becomes less considered. 

This is because the sheer volume of decisions that the owner needs to make each day leaves very little space for the kind of deliberate thinking that complex problems deserve. 

To survive this overload, the owner is forced to rely on intuition and heuristics rather than slow and analytical thinking to make decisions.

Continued reliance on this type of thinking is helpful in the short term but can lead to errors in judgement and foresight over time.

Second, as decision-making becomes centralised to the owner, the team’s capacity to exercise their decision-making capabilities atrophies. 

When the default is to defer rather than decide, team members miss out on the opportunity to practise and the confidence that comes from exercising their judgement for an issue or problem. 

Over time, members of an initially highly capable team become passive passengers in the practice as they have learnt not to trust their own judgement.

The two dynamics feed off each other and become a self-reinforcing cycle. 

The owner unintentionally becomes more central to all decision-making because the team defers more and the team defers more because the owner remains central. 

Unless you break this cycle with a structural intervention, the decision-making process will continue to break down until practice growth and momentum stall.

Reducing span of control

The solution to a wide span of control is to intentionally reduce the number of people reporting directly to the owner by building a leadership layer within the practice.

In most practices, this means identifying one or two key roles, such as a clinical lead or mentor and a practice manager, and actually transferring decision ownership to those roles. 

Gregory Goh.

The difficulty is in the execution, as this transference of ownership needs to occur in reality, not just in theory. 

For example, a clinical mentor who has a leadership title but still defers every non-clinical question back to the owner has only added another layer of communication complexity and therefore increased rather than reduced the owner’s span of control. 

This is one of the most common patterns I see in practices that have tried to address the span of control bottleneck. 

The role exists but the authority still lies with the owner.

To ensure that a leadership layer functions effectively, each role within the layer needs to have a clearly defined scope: what they are specifically accountable for, what decisions they can make independently and what decisions require leadership or owner input. 

A well-defined scope provides the design conditions so that each member of the leadership layer can operate and apply appropriate decision-making with confidence within their area of authority. 

Another benefit is that it serves as a guidepost for team members on who else they can escalate decisions and issues to, further narrowing the owner’s span of control. A well-executed leadership layer can effectively reduce an owner’s span of control to three to five direct reports: the key leaders whose role and function now collectively encompass the operational and clinical functions of the practice. 

Each of these key leaders now has their own span of control and oversees their respective team members within their area of responsibility. 

This dispersing of span across multiple leaders serves to remove the bottleneck of attention so that team members have the quality of leadership and mentoring support needed to flourish.

When span is reduced

The immediate effects of a reduced span of control are predictable – fewer questions, fewer interruptions and fewer decisions. 

The day-to-day problems that previously fell back to the owner are now resolved at the appropriate level and the practice begins to function with more independence and momentum.

But the more significant shift is the reclaimed time and space that is created for the owner. 

With an effective leadership layer and narrower span of control, the owner can again give proper attention to the things only they can do, such as architecting the future vision and direction of the practice, meaningfully investing in the growth of its key leaders and focusing on the few strategic decisions that will move their practice forward.

The true value of a narrower span of control and functioning leadership layer within a growing organisation is that the practice owner transitions from merely managing to leading with purpose, from just working in their business to truly working on their business. 

This can only occur through intentionally redesigning the underlying structure so that the operational weight of the practice is held by the right people, at the right level.

Is your span of control working for your practice?

The following questions will give you a quick read on whether your current span of control is appropriate to the size and complexity of your practice:
•    How many people report directly to you and when did you last review whether that number is appropriate?
•    Are there team members in your current reporting structure who could reasonably report to a senior leader instead?
•    Do you have leaders within your practice who have genuine authority to make decisions or do most decisions still fall back to you?
•    If you were unavailable for a week, which decisions would sit unresolved until you returned?

If any of these questions bring to the surface more uncertainty than clarity, then it is likely that your span of control has expanded beyond what your current structure can support. 

This is not a reflection of your capability as a leader, but rather a design problem. And all design problems have a structural solution.

In the articles that follow in this series, we will examine what that structural solution looks like across the different layers of a growing practice: why the most common first responses to the bottleneck often fall short, how decision-making authority is intentionally designed and transferred, what a functioning leadership layer genuinely requires to work and ultimately what becomes possible for an owner when the structure is actually supporting the practice as it should.

>> Next up: ‘Why your practice manager isn’t solving your bottleneck problem’.