tomtunguz.com · 2012-05-30
· 5118d
Are We Investing Enough in Our Managers?
The article argues that management quality is a critical but undervalued investment in early-stage companies, where 80%+ of operating expenses flow to compensation and managers influence 14-23% of the employee base. The author recommends measuring management effectiveness through 360° reviews, employee satisfaction ratings, skip-level meetings, and attrition analysis, and proposes investing in management coaches, mentorship, and education as ways to improve organizational outcomes.
Metrics in this report
Compensation as Percent of Operating Expense
80%percent
minimum
Early-stage startups
Manager Influence by Organizational Size
23%percent of headcount
average
30-person startup with 7-person span of control
Span of Control
7direct reports per manager
average
Early-stage startups