Companies are getting rid of middle managers. That's a big mistake.
Getting rid of them is a big mistake
Few positions in corporate America are more thankless — or more ridiculed — than that of middle manager. Stuck between the CEO and everyone else in the office, they've long been derided as petty, powerless, thumb-twiddling bureaucrats whose job is to enforce the rules, crack the whip, and stamp out any vestige of creativity or self-initiative. Middle management, the thinking goes, is make-work for the mediocre.
But in recent weeks, as companies brace for tougher times ahead, the assault on middle managers has picked up new steam. At Meta, Mark Zuckerberg is eliminating layers of middle management, demoting many supervisors to the ranks of the supervised. Shopify is also reorganizing its corporate hierarchy, a "flattening" that will result in fewer managers. And Elon Musk has ordered Twitter's engineering managers to start writing "a meaningful amount" of code themselves, in addition to performing their supervisory duties.
CEOs say they're slashing away at managers in the name of efficiency. Zuckerberg offered a telling explanation for his decision: He doesn't want to have "managers managing managers, managing managers, managing managers, managing the people who are doing the work." His rhetoric, in fact, is part of a decades-long movement to reduce the number of middlemen in corporate America's sprawling bureaucracy. Save on overhead. Break down silos. Cut the red tape. Create, in Zuckerberg's words, "a more fun place to work." It all sounds great, right?
Except for one little thing: Middle managers are actually the ones who make large organizations work. Studies suggest they move the needle on a company's overall performance far more than senior executives do — and also make a bigger difference to the bottom line than the teams they supervise. By eliminating middle managers now, in the midst of an unprecedented shift to hybrid work, businesses are cutting the very people they need most to weather all the economic uncertainty. They're making it harder for the remaining managers to succeed. And they're sending a powerful message to talented would-be supervisors: Don't become one.
"You could have a great vision, you could have a great strategy, but if you don't have managers who create the culture you aspire to become, then none of that stuff will get done," says Jim Harter, the chief scientist for Gallup's workplace-management practice. "It'll be uphill all the way. Leaders' jobs are a lot easier if they've got effective managers."
The Great Flattening
When it comes to management structures, there are two archetypes: hierarchical and flat. Hierarchical organizations have tall org trees that cascade down ever-descending layers of management. Flat organizations have short org trees with far fewer intermediaries.
Large companies tend to be more hierarchical because they need to establish a clear chain of command. But over the past few decades, big businesses have sought to become flatter — and some, like Zappos, tried doing away with hierarchies altogether. A study of 300 large companies found the number of managers layered between CEOs and their division heads decreased by more than 25% from 1986 to 1998. The average number of people reporting directly to the CEO, meanwhile, nearly doubled. The Great Flattening was underway.
The war on middle managers appears to have achieved some of its intended benefits: One study found that companies with fewer organizational layers got products to customers more quickly. But the trend also led to a culture that dismissed middle managers as deadweight — even though extensive research has found that the good ones make outsize contributions to their organizations.
Take a series of analyses by Gallup on employee engagement— a gauge of how involved and enthusiastic workers feel about their jobs, which in turn is linked to higher profitability, lower turnover, and lower absenteeism. Gallup's researchers homed in on a puzzling finding across more than 50,000 teams: Even within the same company, some teams scored much higher in engagement than others. The finding suggested that the key to how employees feel about their jobs lay in team-specific dynamics, not organization-wide ones.
So the researchers drilled down further. What they found surprised them: Direct supervisors were responsible for 76% of the variation in team engagement, while executives accounted for only 11%. "Your immediate manager has a much bigger impact on your engagement than senior leadership," Harter says. "It was shocking how much variance there was across these manager-led teams, and how much managers influenced the engagement of an organization."
Top executives may be shocked to learn they're less valuable than middle managers. But if you think about your own experience as an employee, it probably makes sense. The person who makes the biggest difference in your day-to-day work life isn't the CEO, who probably isn't aware of your existence. It's your immediate boss, who knows to go easy on you right now because your marriage is falling apart, who tailors their feedback to you in a way that makes you open to change, and who reshapes assignments from higher-ups so they match your strengths and ambitions. Underappreciated though they may be, middle managers often make or break the way we see and do our jobs. That's why, in a recent survey conducted by UKG, a workforce-software provider, employees said their supervisor had just as much impact on their mental health as their spouse — and made a bigger difference than their therapist.
Consider another study that examined the importance of middle managers on company performance. Ethan Mollick, a professor of management at Wharton, looked at two jobs in the gaming industry: designers and producers. Designers are the creatives who invent and build the games — the innovators. Producers are the suits who make sure projects are delivered on time and on budget — the managers.
Mollick expected to find that the creative output of the innovators mattered more than the bureaucratic work of the managers. But the opposite proved true: Producers accounted for 22% of the differences in revenue across games, while designers accounted for only 7%. (Another study found that top executives mattered even less, clocking in at less than 5%.) "High-performing innovators alone are not enough to generate performance variation," Mollick concluded. "Rather, it is the role of individual managers to integrate and coordinate the innovative work of others."
Managers managing managers
It's a message worth heeding — especially in Silicon Valley, where genius coders are treated like gods. Studies have shown that a top programmer can produce as much work as 20 average ones — a statistic that's often used to justify paying astronomical salaries to attract the best engineers. That's why the tech industry created a separate advancement track for programmers: to give superstars a way to win raises and promotions without having to become managers.
But by worshiping top performers so much, the Valley devalued the less glamorous role of managers — the people who actually get the work of the genius coders out into the world. Last October, when Elon Musk was asked to name the most "messed up" thing about Twitter, he answered, "There seem to be 10 people 'managing' for every one person coding." You can hear a similar disdain in Zuckerberg's words. When he talked about not wanting "managers managing managers," he left unsaid the most common middle-manager trope of all: that, unlike employees who are "doing the work," in Zuck's words, middle managers aren't really doing anything at all.
It's an assumption that an experienced management consultant I spoke with picked up on immediately when she accepted a supervisory role at a tech company. Almost as soon as she joined, she was told most of her day should involve working on projects of her own — even though she was responsible for overseeing a team. Her performance reviews revolved around the work she produced herself, rather than her accomplishments as a manager. When she got laid off a few months ago, she wondered whether she was targeted in part because she prioritized developing her team over grinding out work of her own.
"I think spending your time coaching and leading and developing people is a worthwhile pursuit in itself," she told me. "If you want to do those things and do them well, then you need to have time carved out for that. Managing people is a job. But I don't think that was appreciated and valued by leadership at the company. That's not appreciated in tech."
Managing people, in fact, is far more time-intensive than corporate leaders realize. Gallup found there's an upper limit to the number of direct reports most managers can effectively oversee: 10. Any more than that, Harter says, and it becomes hard to have meaningful conversations with employees on a weekly basis. (Musk reportedly has 28 people reporting to him at Tesla alone.) As companies like Meta shed middle managers, they risk burdening their remaining supervisors with teams that are too large to oversee effectively. The companies might save on overhead for now. But they'll struggle with retention and lose out on revenue in the long run.
The burnout in the ranks of middle managers is starting to become apparent. In the UKG survey, 42% of middle managers said they were often or always stressed — a higher share than either frontline workers or C-suite executives. More than half said they wished someone had warned them not to take their current job. That's because they're under increasing pressure from their bosses above, who are pushing them to ratchet up productivity while laying off staff members, and from their employees below, who are mad about having to return to the office.
Instead of eliminating middle managers, or burdening them with additional work, companies would do better by giving them the recognition they deserve and helping them become more effective in the emerging post-pandemic workplace. The businesses most likely to weather the current economic turmoil, Harter says, are those that unlock the hidden value of middle managers. "It's something companies can leverage, particularly in these more difficult times we're in right now," he says. "A lot of it is going to come down to how they upskill managers."
Aki Ito is a senior correspondent at Insider.
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