Building a better hierarchy: Why middle managers matter

It’s become fashionable over the years to have a go at middle managers. They tend to get blamed for everything that is wrong in an organisation. These plodding mediocrities stifle innovation. Even if they don’t stop change altogether, they slow it down, as the initial energy and enthusiasm gets sapped by layers of bureaucracy. Wouldn’t it be better if the C-suite could just engage with the front line without all those jobsworths getting in the way? Really, it would be better if they were all fired. They’ll none of ’em be missed.

The article criticising middle managers is a hardy perennial. It’s second only to those tedious pieces making fun of corporate jargon. Stuck for what to write in your business column this month? Have another go at middle managers.

The idea that organisations can get rid of middle managers is seductive and aligns neatly with many other management ideas that have appeared over the last couple decades. Get the right culture, the right values and engage the employees and people will, y’know, just kinda do stuff without needing to be asked or told. Imbue them with the corporate ethos and they will need a lot less managing so you can save yourself a fortune. Or something like that.

I first heard the terms ‘delayering, downsizing and rightsizing’, usually in the same sentence, sometime around 1990 when I was a rookie HR manager. As one of my colleagues quipped at the time, “Downsizing, rightsizing and capsizing.” Many a true word, for capsizing is often what happens when organisations try to do without middle managers.

As Harvard’s Jule Wulf found, when layers of management are taken out, decision-making is rarely devolved to the front-line. Instead, the decisions get pushed up the hierarchy. Flattening the structure can therefore have the opposite effect from that which it promised.

Removing middle managers in support functions isn’t always an easy win either. Reduce the number of HR managers and you find people with titles like ‘resource manager’ appearing in frontline functions. If you take away central HR, IT or finance support, line managers have a habit of just hiring their own.

Even Google found it couldn’t manage without middle managers. As Stanford’s Bob Sutton and Huggy Rao commented in their recent book:

Google’s founder and CEO Larry Page is exhibit one. As we wrote in Scaling Up Excellence:

‘Page has been described as “obsessed with making Google work like a smaller company.” In 2001, when Google grew to about 400 people, Page decided that middle managers were creating complexity and friction – symptoms of John Greathouse’s “Big Dumb Company Disease.” So he got rid of all of them. More than 100 engineers reported to a single overwhelmed executive. Frustration and confusion was rampant. Without those middle managers, it was nearly impossible for people to do their work and for executives to grasp and influence what was happened in the company. Page learned the hard way that a hierarchy can be too flat and that middle managers are often a necessary complexity.’

Sack too many managers and even an organisation with a world-beating product will start keeling over.

Despite disliking hierarchy, Bob Sutton has come to the conclusion that it is essential and that less of it isn’t necessarily better:

I have always despised hierarchies in my heart, but this research taught me that they are good and necessary – of course some are good and others are bad, but spreading and sustaining excellence depends on having an effective pecking order.

I still feel a bit ambivalent about it, but the evidence is overwhelming.

Hierarchy is inevitable. As our Stanford colleagues Deb Gruenfeld and Lara Tiedens show in their detailed review of research on hierarchy, although the forms it takes vary wildly, it is impossible to find groups or organizations where all members have roughly equal status and power. Whether researchers study people, dogs, or baboons, hierarchies are evident after just minutes of observation. And when strangers meet for the first time, a hierarchy of leaders and followers begins to emerge immediately. This rapid development of pecking orders is seen, for example, in groups of college students who meet in psychology experiments and when strangers start chatting on the street corner – leaders, followers, and other signs of status differences nearly always emerge (along with more subtle roles such as “joker,” “hero,” and even “scapegoat”).

Gruenfeld and Tiedens conclude: “When scholars attempt to find an organization that is not characterized by hierarchy, they cannot.”

Organizations and people need hierarchy. While there is no doubt that some hierarchies are better designed than others, an interesting test is what happens when there is little or no consensus about who has more — and less — power. Gruenfeld and Tiedens describe a series of studies showing that when such agreement is absent (so the nature of the formal or informal pecking order is not clear), members become less committed to their groups, less productive and effective, dysfunctional competition for status emerge, and coordination and cooperation suffer.

Perhaps this is why, when it comes to getting rid of managers, a lot more has been said than done. Data from the recent Working Futures report by the UK Commission for Employment and Skills (UKCES) suggest that, since I first came across the term ‘delayering’ all those years ago, the percentage of the workforce in management roles has increased. Despite all the talk of the end of middle management, UKCES expects this trend to continue for the next decade or so.

Source: Working Futures, UKCES, April 2016. Chart shows managers in employee roles as a percentage of all in employment.

If there has been any removal of middle managers in UK organisations, then, it seems it didn’t last very long. Some might have gone but they were simply replaced with others.

This shouldn’t come as a surprise. As organisations have become more complex, managing them has become more difficult. When production was standardised, it was easier for one person to manage a lot of people. Nowadays, many process jobs have become automated. Managers are more likely to be running smaller and more diverse teams of professionals. This is the job polarisation we have heard so much about. The proportion of professional and technical staff in the workforce has risen significantly. This requires a different sort of management.

The thing about middle managers is that good ones can make a real difference. A five-year study by Stanford and Utah universities found that, in teams of ten people, replacing a low-performing boss with a high-performing boss raised productivity by 12%. The exquisitely titled study People and Process, Suits and Innovators by Wharton’s Ethan Mollick found that, far from stifling creativity, good middle managers are what makes it happen:

[V]ariation among middle managers has a particularly large impact on firm performance, much larger than that of those individuals who are assigned innovative roles.

[I]t is the individuals who fill the role of middle managers – the “suits” – rather than the creative innovators that best explain variation in firm performance.

The results also show that middle managers are necessary to facilitate firm performance in creative, innovative, and knowledge-intensive industries.

The creatives might come up with the ideas but it is the quality of the middle managers which determines whether or not those ideas will actually get off the ground.

And, rather than blocking change, your middle managers can, as Stanford’s Benham Tabrizi found, be the very people who make it work.

So perhaps, as Octavius Black said earlier this month, it is time to rehabilitate the middle manager:

Stuck in the middle, it’s no surprise that 68% of managers wish they weren’t. This matters.

It matters because the middle manager holds the key to the most pressing challenge for business: productivity. The evidence is emphatic: a company that turns the middle manager from heretic to hero stands to gain an insurmountable competitive advantage.

Organisations could start, he says, with some proper investment in their development:

Most businesses spend less on training their managers than they do on the office furniture and PC they give them to work with.

Those that don’t may come to regret it:

The middle manager has been left to drift in the corporate wilderness. The wise leader will quickly welcome middle managers back as the company’s saviours, before they realise that we need them more than they need us.

Middle managers are like the skeleton of an organisation, the thing that gives it structure and holds it together. It makes far more sense to invest in them than to run them down. As Bob Sutton put it (my emphasis):

As you scale an organization, getting rid the hierarchy – or even assuming that a flatter one is better – is the wrong goal. Your job is to build the best hierarchy you can.

Managing without middle managers is something that few (if any) organisations have been able to pull off. The idea of a middle manager free organisation is just another piece of management mumbo-jumbo. Fashionable and zeitgeisty it may be but it’s still nonsense. Middle managers are what makes an organisation work. It makes sense to build the best hierarchy you can.