What’s the difference in a company between “line” and “staff” professionals, and why is that important?
First, a brief history. Corporate organization follows the 19th century Prussian Army model. Line soldiers serve on the line of battle, take risks, and get big promotions and decorations if they succeed; or, they die if they fail. Staff troops support the line soldiers, serving behind the lines at less risk. They also get promotions and decorations if they succeed but don’t rise as high or get as many. If they fail, they get transferred or booted out.
This division still exists in many company organizations. Line professionals are executives and others who take risks for enterprise success and are the combat soldiers of business. They are general managers, sales, production and operations people and others who bring in revenue and profit. They figuratively live and die by their results. If a corporate CEO or product line manager fails to deliver on her revenue, profit and expense plan over a longer period, she soon will be in out-placement. If she succeeds, substantial bonuses, raises, and other remuneration will be awarded.
Staff employees — accountants, attorneys, and communications people, for example — take less risk, for their role is to support the line. While important, sometimes greatly so, they are costly overhead and do not directly bring in revenue and profit. They should receive substantial but not lavish rewards when they perform well and be dismissed for failure, especially when they do not support the line efforts to increase revenue and profit.
Case History: A Staff Executive
I worked years ago for a major insurer where a very successful staff executive, the chief financial officer, became chairman and chief executive officer. He was uncomfortable with line executives and the sales and marketing process. He was not a good ambassador for the company with shareholders and customers. He elevated staff pals over line people, which caused morale problems and led to cautious, inward-looking leadership. He forced out line people he could ill afford to lose. His tenure was not a complete failure, but it was not a great success. This should never occur.
It’s important for line and staff to work as a team, so managers should establish a culture that breaks down the us-versus-them philosophy. Bring both groups into decision-making teams and make sure subordinates do the same. It’s okay — even desirable — for staff and line to enter vigorous debate. The dialogue must end when the boss makes a decision.
Balance Line with Staff
Here are some ideas about how to organize to help ensure maximum revenue and profit with the right balance between line and staff:
- Only line people should be in jobs involving enterprise risk. Staff people should not take these positions.
- Don’t let staff elitists dominate the company. Eliminate staff heads who build empires and accrue political power.
- Don’t let the line bully the staff. Staff must have independence to give their best advice to help the enterprise succeed. When they are marginalized, there is no point in having them.
- Ensure line people have the top titles; staff people should have subordinate titles.
- Pay line people well for success. Pay staff people moderately well for success. There is one caveat: Never be afraid to pay the great inventor or top sales person more than the CEO if their contribution results in outstanding enterprise success.
- If you have one slot to fill, make it a sales, operations or production person, not another staffer. Always seek more revenue and profit.
Leading the Battle
To bring home my philosophy, think of our Army in war. Who leads? Not a logistician or the communications officer. It’s the infantry officer who knows strategy and tactics and has succeeded in earlier assignments. In the best corporations, it’s the line executive who has sold, managed sales, operations and taken product risks who ultimately becomes the boss. He has met his targets of revenue, profit and expense containment. It’s not the staff executive. And that’s the way it should be.