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Why go wide
Peter Rahal used to think seven or eight was the most anyone could have and still give each person the attention to develop them. He changed his mind. A wide span lets him see a lot, and it keeps him near the problems.
The terms
His terms with each person reporting to him are plain: they set priorities together, the report brings problems to him, and they work them out together. He does not manage anyone's to-do list. That takes leaders with real agency and autonomy.
A flat structure
The company is a flat organization without a lot of depth, even though it is complicated. A conventional structure with eight direct reports stacks the hierarchy too high, and information stops flowing.
Where did the seven-person limit come from?
In 1933 management consultant V. A. Graicunas published a paper arguing that the number of relationships a manager must track grows far faster than the number of subordinates, because it includes the relationships among the subordinates themselves. His formula gave 100 relationships for five subordinates and 222 for six. Lyndall Urwick, a leading management theorist, popularized the idea as a limit of about five or six on the span of control.
How does a flat structure change information flow?
Studies by Charles O'Reilly, including a 1974 paper with Karlene Roberts, found that managers often filter information as it moves upward, particularly when it is unfavorable. Each additional layer is another place where that can happen. Flat structures remove layers, so messages pass through fewer hands.
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