Why middle managers matter more than ever

FROM THE ARCHIVE: Sandwiched between the board and the workers, middle managers are often derided from both sides, but they deserve better.

by Octavius Black
Last Updated: 20 Aug 2020

Management isn’t as cool as it was when MT was founded 51 years ago. It would be one strange kid who said wanted to be a middle manager when they grow up (it may not be any stranger than wanting to be ‘a famous YouTuber’, but that’s by the by).

This isn’t just a problem in popular culture. In business, it’s de rigeuer to carve out layers of management in the name of leanness and agility. Even John Lewis is cutting down on the hierarchy, reducing management numbers in Waitrose and putting in place ‘new flexible team structures with broader responsibilities’ in its stead. Squeezed margins will do that to you.

Across the board, flat structures are fast becoming the norm. But, as Octavius Black argued in MT’s long read from June 2016, it would be a mistake to think middle managers don’t matter.

Is anyone at work so universally despised as the middle manager? From The Devil Wears Prada to Working Girl via Horrible Bosses (so popular they made it twice), there’s no shortage of blockbusters portraying the manager as the bad guy or girl. Dolly Parton warned in 9 to 5 ‘the boss man’s out to get you’. You’d be hard-pressed to find a Hollywood success that suggests otherwise.

Switch to the small screen and The Office, the world’s most successful franchise based on working life, depicts the manager as a self-deluded nincompoop. A natural successor to Reggie Perrin’s 70s boss, CJ.

In popular culture, the manager is either a beast or buffoon. What a choice. It isn’t much better in the real world of work. From the lofty altitude of the C-suite, middle managers are seen as the barrier between the CEO’s ingenious vision and its swift implementation by the noble worker. They are disparagingly referred to as permafrost or the sweeter, but only in the literal sense, marzipan layer.

In 25 years of advising CEOs, when I’ve asked what’s best about their company, I’ve been told many things. Indeed sometimes it’s hard to shut them up. But not one has ever said that the great thing about their company is ‘the quality of our managers’.

There’s no respite at the other end of the corporate hierarchy. If you overhear someone saying ‘you’ll never guess what my boss did today?’ you can be pretty sure that the answer isn’t going to be entirely positive. Most people say they could do a better job than their manager, even if the passage of time would suggest otherwise.

Stuck in the middle, it’s no surprise that 68% of managers wish they weren’t. This matters. Not because they’re an oppressed minority whose feelings are being unnecessarily hurt, though that’s a generous thought.

David Brent, played by Ricky Gervais, is the mocked middle manager in The Office. Credit: BBC Photo Library

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.

A team of psychologists at Stanford analysed the performance of over 23,000 front-line workers over four years. They were all in customer-facing roles that involved a small amount of technology, from airline check-in to supermarket checkout. On average they had four supervisors or managers a year. Analysis of almost six million data points revealed that swapping a poor manager for a strong one correlated with an increase in productivity by 12%. Adding a new person to the team, which though clearly much more expensive, was linked to only 11% greater output.

While this extensive study shows a highly significant correlation, it doesn’t demonstrate causation. The study of a Dutch supermarket chain does. Employees completed a questionnaire on the leadership style of the store manager. The analysis revealed three distinct leadership styles: charismatic, considerate and structured. The manager’s style proved to be an accurate predictor of sales and controllable costs six months later. The manager isn’t just the key to productivity either. She also unlocks a sustainable solution to many a business challenge.

No FTSE chairman wants to be left out of the drive for greater diversity, which means not only women on the board but a great gender balance and wider range of backgrounds at senior executive levels and throughout the company. 

Beyond the PR, however, the benefits of diversity only come where there is also a climate of inclusion. In most companies, this is lacking: 61% of us, including 45% of white, heterosexual men, feel that we need to bend ourselves out of shape to fit in at work. This is not only bad for our health and wellbeing but it also diverts energy and dilutes performance. We feel included when we feel recognised for who we are, and the person best placed to do this is our manager.

The biggest short-term risk for many businesses comes not from voracious competitors or disruptive technologies but the wayward trader, (emissions) test fixer or overly flexible accountant. Compliance is the second fastest growing profession in the City (after digital scientists). Yet too many rules stifle innovation, slow down change and offer no guarantee against errant behaviour. The solution lies in creating an environment where people know right from wrong. Albert Camus said that ‘integrity has no need for rules’, but it does need advocates. Cue: the manager.

To many, this won’t be a surprise. Whether listening to TED talks or reading the vast array of social science bestsellers, most of us have been exposed to the practical benefits of applying psychology. 

So why aren’t pioneering bosses seizing on this evidence to transform the way people are managed? The answer is, I think, straightforward: they don’t know where to invest to be sure of a positive return. As a result, most companies resort to what they’ve used before and tweak it. 

The most egregious example is the performance management cycle – 86% of companies have either just changed their process, or plan to do so in the next 18 months. It won’t make any difference. 

As part of an experiment, households were randomly allocated into two groups. One group was set the target of improving energy efficiency by 20%, and the other by 2%. The first group managed an average of 15%. In traditional company terms they missed their target and might well be put on a performance improvement plan. The second group delivered a 6% improvement, three times better than their goal. In a typical corporate environment, they’d be showered with praise, baubles and probably get a promotion. 

The system is set up to reward people who negotiate lower goals and can more accurately predict the future, not those who deliver the best results.

It’s just before Christmas and you sit your partner down. You explain that you are giving them a ‘3.6’, with ‘3.8’ for being fun on holiday but a ‘2.9’ for domestic contribution. Perhaps you add that you’d have given them a higher score, but the cousins had an outstanding year and so the distribution curve meant that you couldn’t. My guess is that you’ll be eating mince pies alone.

We can no more manage the performance of people with an annual review than we would manage our marriage based on our anniversary.

Doralee Rhodes, played by Dolly Parton, with her bad boss in the film 9 to 5. Credit: Alamy

Deloitte discovered that they spent almost two million hours a year simply running the performance process, and that most of that time wasn’t even spent with the person whose performance was being managed. Along with Microsoft, Netflix, Adobe and Accenture, they have realised that not only is the performance cycle a heavy drain on resources, but there is no evidence that it provides any uplift. As a result, they ditched the annual cycle and have replaced it with getting effective managers to have good quality conversations every day of the year.

There is an increasing recognition that what works for optimising most business resources doesn’t work for human resources. Competency models, 9-box grids, personal development plans, organisational values, employee value propositions, learning management systems, and much else in the HR armoury may give a sense of control, or at least that we’re doing something, but there is scant evidence that it gets people to achieve more.

All performance improvement routes lead via the manager and so, without good quality management, everything else is just whistling.

In the quest to identify what makes a good manager, Mind Gym’s team of psychologists conducted a review on all the existing research, from recent and notable meta-analyses (one of which analysed 168 different competencies) to Google’s Oxygen. 

The analysis identified the seven core talents that matter most. Of these, one has a magnifying, or minimising, effect on all the rest. This is the ability to form, redefine, repair, maintain and, on occasion, exit from working relationships.

The psychologists’ term for the relationship between a manager and the person they manage is the leader-member exchange (LMX). The researchers discovered that exactly the same piece of advice from the manager on how to improve, would be acted on if the LMX was strong, but ignored if it was weak. The same applied with messages about changing the way the team worked. 

The LMX is strong when the relationship is appropriate, which means navigating between the Scylla of being superior and the Charybdis of becoming a chum. Too much distance and there is no emotional connection, too intimate and there is a high risk of collusion. The difficulty lies not just in keeping appropriate boundaries (assuming you know what they are in the first place) but in how you respond when they are crossed.

Early in my career, when one of my high-performing colleagues turned up late to our team meeting, the boss made some comment along the lines of ‘please be punctual in future’. The late arrival grinned back, ‘I thought you were bigger than that, but if it really matters that much to you, sure.’ And sat down. We were all gripped to see how our manager would respond. If he mumbled something and carried on with the meeting, he would lose our respect. Equally, if he got all boss-like and ‘how dare you speak like that’, we’d have to side with our colleague. Wisely, he did neither. Instead, he looked up, fixed his gaze and said calmly, ‘You’re right, not wasting our team colleagues’ time does matter to me,’ and then continued on with the meeting. A boundary had been breached and with his response he’d repaired it.

Most businesses spend less on training their managers than they do on the office furniture and PC they give them to work with. This is partly because much training doesn’t deliver what’s promised.

Mainstream management development tends to concentrate on the basics, euphemistically called essentials, rather than going to where it’s difficult. It is generally done in one go, over two or three days, inevitably at the wrong time. Where there is ‘top-up’ it is usually based on self-selection and delivered in ‘one size fits everyone’ e-learning modules.

Thomson Reuters bucked the trend and reaped the rewards. Its management programme was spread over a year with bite-size workshops that went to what’s challenging, got people to practise in between, and provided personalised prompts along the way. The evaluation showed that people whose manager went on the programme rated their manager significantly higher afterwards than they had before. For those whose manager didn’t take part, their rating went down. The behavioural science is compelling and the companies that have started to apply it are already seeing the benefit.

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.

How to get the most from your managers

For those company bosses keen to make managers central to their ambitions, here are five steps to get going:

1. Celebrate the role of manager and talk about how difficult it is to do even reasonably well, because it is. 

2. Discriminate between technical specialists who lack the aptitude to manage people and those who seem inclined. Provide career paths for both. If managing people is a skill your business lacks, call it out, assess, promote and recruit for it.

3. Educate as you would with any other skill, like playing the piano or French, little and often. Keep on training for as long as they are managers, like an athlete. Concentrate on what’s difficult and can make most difference. 

4. Eradicate HR-generated process and forms. You want managers’ time spent talking, not typing. One bank has introduced a monthly, optional dial-in for all managers of people, instead of emails. 

5. Delegate change, rather than top down or bottom up, start with the middle. Santander turned around customer service in branches by focusing on regional and branch managers. As for the directors, the key was to stop them getting in the way.

Octavius Black is CEO of Mind Gym and author of The Manager is Back: This Time It’s Personal (available at themindgym.com). 

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