Killing the Middle Managers
This is a general guide to post-pandemic business management.
The post-pandemic higher-level business manager must accept the demise of middle management as a given in the post-pandemic world of business. Middle management has been under attack for three decades leading to the pandemic. It was beaten, bruised, butchered, and battered but is not yet dead. Someone has to pull the trigger.
Pulling the trigger is the work of the post-pandemic business manager. Somebody has to do it. Be the executor.
What is middle management? Who is the middle manager? As the name implies, this is a managerial layer that exists between the senior managers (executives) and everyone else. The top layer consists of C-suite executives and, in larger organizations, some other senior managers. The C-suites are those with titles that typically start with a C (Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, etc). The bottom layer is everyone else. Middle management lies in between the top and the bottom.
Examples of Middle Manager Titles:
- General Manager
- Plant Manager
- Regional Manager
- Divisional Manager
- Assistant Manager
Middle managers are typically generalists with no specific line function. Regional managers, for example, are the most misunderstood. People don't really know what they do besides the general statement that they oversee the region. They do not oversee a direct line function. The fellas running operations in a region probably still report to the Operations Director (a C-suite) in addition to the Regional Manager. Finance, marketing, and HR would probably be centralized. If not centralized, the employees in the region would still report to the line managers who report to the C-suites responsible for these functions.
The role of middle managers is still there in some entities though it is no longer necessary in most entities. Every situation is different. However, the general trend is that of the gradual elimination of middle management jobs.
What does the average day of a middle manager look like?
- Read emails
- Write reports
- Conduct meetings
- Prepare PowerPoint slides
- Calls
- Assign tasks, monitor tasks, and review progress
- Motivate employees
- etc
Most of these duties do not actually involve doing any real work. That is the age-old allegation against middle managers. They exist to tell other people to do work. They exist to motivate employees to work. They are there to break down high-level strategic goals from the C-suites into low-level tasks that can be done on a day-to-day basis by employees. They are the communication channel between the top dogs and the bottom layer of the company.
The roles played by middle managers have been attacked from the left, right, and center by several factors.
The major factors driving down the need for middle managers are as follows:
- Relentless Pursuit of Growth and Profits
- Technology
- Changes in Work Culture — autonomy, self-management, independence, tech culture, etc
Relentless Pursuit of Growth and Profits
The relentless pursuit of growth and profits is at the forefront of killing middle management jobs. Even in the absence of technological advancement, it can be argued that middle management jobs were bound to be killed gradually. Companies have been obsessed with increasing profitability every year. The performance of C-Suites is measured by these KPIs. The reality is that at times growth is elusive and that growth does not always correspond with increased profitability. If a company improved its Net Profit Margin from 5% to 6% last year, next year achieving 6% will not be remarkable. The company is expected to go above 6%. The year after the next, they are expected to improve the margins again. When does the madness stop? It doesn't stop. Companies are supposed to get better every year. If its revenue growth, they are expected to grow every year, in perpetuity.
To improve profitability, companies resort to cost-cutting measures. The largest cost in most companies is typically payroll costs. When the C-Suites take a look at payroll and consider the jobs to cut, the jobs of middle management are thrown in the chopping bucket. The same conclusion can be reached by virtually anyone given such a task. The role of middle managers is misunderstood. They look like they are doing nothing at all. They are not involved in any meaningful work that can be reliably measured. Leading and motivating people cannot be accurately measured.
Think of the Sales Manager who is leading a team of 10 Salespersons. He trains them, motivates them, empowers them, assigns tasks, handles the more challenging queries, etc, but is not really involved in the selling process, as such, his name cannot be listed against any sale. When you take a look at the sales report, his name is not annotated against any sale. Is this guy really working? Can the sales team perform their jobs without this guy bossing them around? These are the questions asked when the ax has to fall on someone. This is how middle management gets eliminated, one by one. They are falling prey to unreasonable demands of endless growth and ever-increasing profitability, which demands cost cuts. With every other cost having been cut already, it is the middle management that bears the brunt.
Technology
The relentless march of technology was not going to spare middle management. Advancements in communications technology meant that the role of middle management as a communication layer between the top dogs and everyone else was going to be made obsolete. Office tools have become so advanced that they can perform everything that the middle managers were very good at.
Technology has made it so easy for the top dogs to assign tasks across the organization as well as monitor them. The business management food that middle managers have been consuming for decades fed them ideas such as the one that says the ideal span of control is between 6 and 8 subordinates. Technology has blown those assumptions away. The studies have to be conducted again. These days one manager can effectively supervise 16 or more persons, empowered by technology. He can obtain live performance data and is a click away from communicating with any of his subordinates, and does not even need to be geographically proximate to the subordinates.
A bottom layer of 200 workers than needed 25 middle-level managers using the old span of control of 8 would now require only 12 middle-level managers. The number of middle-level managers needed has halved. As technology relentlessly advances, the role of the surviving 12 managers is being continuously questioned.
Technology is a true general manager, just like the middle managers. It can train employees by giving them constant and instant feedback on how they are performing. Technology can make anyone create fancy reports in a few clicks.
The other manner in which technology has killed middle management jobs is by killing the jobs of human subordinates who reported to the middle manager. Middle managers are traditionally employed to deal with people. They manage people, not systems. Take a bank, for example; a wave of technology brought ATMs to displace tellers, another wave of cellphones brought cellphone banking, another one brought internet banking, the smartphone wave has brought apps that enable you to do all your banking on the phone. All these waves have displaced the bank teller. Now think of the Chief Teller, Assistant Branch Manager, as well as the Branch Manager that was managing a brick-and-mortar branch. The “Chief Teller” is not really a chief when there are no tellers. The Assistant Branch Manager is just a title that was never needed, merely created to add a hierarchy between the branch manager and everyone else. The Branch Manager is not needed if every client is using a smartphone and not coming into the branch.
Cultural Changes
There are fundamental changes underway in the way employees view work. These changes have been largely influenced by tilting demographics at work. Younger generations (Millennials, Gen-Zs, and Gen-Ys) have challenged the old assumptions and old management theories of the 20th century. They do not like bosses. They want autonomy and freedom. They want to be independent. They want to be in charge of their own work.
It simply makes no sense for a millennial to be reporting to someone whose sole job is to receive such reports, and nothing else. The idea that someone is employed full-time to supervise another person does not sit well with most millennials. Middle managers carry out work that is necessary but difficult to quantify and thus difficult to justify. Young millennials entering the workforce do not see the need for middle managers. The typical complaint in corporations with legacy hierarchical structures is that “my boss does not do any work.” This is a direct attack on middle management.
As millennials climb up the corporate ladder, they have sought to eliminate middle management roles. In technology firms and start-ups at large, they have created organizational structures that have no space for middle managers. Coders, developers, and other geeks hate hierarchies with a passion. These cultural changes are not limited to the tech sector. They are spreading across the business world.
The culture has generally shifted towards autonomy and collaboration. Companies replace middle managers with a bunch of productivity apps for planning work, reporting, communicating, collaborating online, reviewing progress, and so on and so forth. The workflows are purposefully built to avoid any middleman role (i.e., middle manager).
Companies with stiff structures dominated by middle management have had higher staff turnover due to millennials not being able to cope with such an environment. The cultural change cannot be reversed. It is actually not just a “power-reporting” issue. It has more to do with generational beliefs about fairness and justice. The new generation feels it is unfair to be supervised by someone whose sole job is to supervise them as opposed to actually doing “real” work. This is where the general sentiment that my boss takes all the credit for my work comes from. It is a direct result of the corporate structure. Middle managers do the reporting, claiming to have done such and such, obviously on behalf of the team, whilst the employee down the hierarchy layers feels it should be him or her getting the credit, not the reporting guy.
How do we proceed?
If you are a generic middle manager, your days are numbered. Relentless advancement of tech, the endless pursuit of growth and ever-increasing profits, and cultural changes will eventually consume your role. You will no longer be needed.
The appropriate thing to do now is to pivot. Learn a new skill that is needed, so that you can fit in the layers of people who actually do work, in the sense of creating value that is easy to put in metrics. Another strategy is quickly to move up the ladder if you can. Becoming a C-suite is the real deal, its positions were generalists rather than specialists excel.
If you own or manage a business, you need to think carefully about the future of work. You need to go back to the drawing board and think from the first principles regarding your organization structure. How do you want to organize work? Can you achieve your goals without the thick layer of middle management? How do you ‘code’ your business in a way that does not overwhelm and inundate senior managers with work and comms in the absence of middle managers? You need to think about the workflows. You cannot run away or hide from making these considerations. Your competitors will make such considerations. If they are successful in restricting work, they can be lean, flatter, faster, and more agile than you.
If you decide to be the executor who kills middle management, you have to do so with a plan. You cannot just kill middle management roles without restructuring workflows. Of course, most middle management roles are already obsolete, but introducing change should always be something that is planned carefully.
Ciao!
Check out our new platform 👉 https://thecapital.io/
