From the Economist’s Guru section article on Elliott Jaques:
Jaques (1917-2003) decided that jobs could be defined in terms of their time horizon. For example, a director of marketing might be worried about marketing campaigns for next year, while a salesman on the road is worried about reaching his targets for the week. Jaques also believed that people had a “boss” and a “real boss”. The boss was the person to whom they were nominally responsible, while the real boss was the person to whom they turned to get decisions crucial to the continuation of their work.
The sales manager in charge of a salesforce would not have a longer time horizon than the people in his salesforce. So when a salesman wanted a decision on something affecting his ability to deliver to his clients, he would go over the head of the sales manager for that decision. Jaques called this “level skipping”, and identified it as a dangerous pathology in any hierarchy.
He then looked at the time horizons of people, their bosses and their real bosses, and he found that people with a time horizon of less than three months treated those with a horizon of 3–12 months as their real bosses, and so on up the scale. He identified seven different time horizons, from three months to 20 years, and argued that organisations, no matter how complex, should have seven levels of hierarchy, each corresponding to a different managerial time horizon. Jaques’s theory has come to be known as RO (requisite organisation).
This reminds me of the Tolstoy quotation from C.S. Lewis’s “The Inner Ring”:
“When Boris entered the room, Prince Andrey was listening to an old general, wearing his decorations, who was reporting something to Prince Andrey, with an expression of soldierly servility on his purple face. “Alright. Please wait!” he said to the general, speaking in Russian with the French accent, which he used when he spoke with contempt. The moment he noticed Boris he stopped listening to the general who trotted imploringly after him and begged to be heard, while Prince Andrey turned to Boris with a cheerful smile and a nod of the head. Boris now clearly understood-what he had already guessed-that side by side with the system of discipline and subordination which were laid down in the Army Regulations, there existed a different and a more real system-the system which compelled a tightly laced general with a purple face to wait respectfully for his turn while a mere captain like Prince Andrey chatted with a mere second lieutenant like Boris, Boris decided at once that he would be guided not by the official system but by this other unwritten system.”