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The future of middle management

Aug 9, 2023 | Public | 0 comments

Most of us don’t exactly dream about becoming a middle manager. But in fact, middle managers play a pivotal role in organizational success, according to the new book Power to the Middle: Why Managers Hold the Keys to the Future of Work (Harvard Business Review Press, July 2023). On this episode of McKinsey Talks Talent, authors Emily Field, Bryan Hancock, and Bill Schaninger talk with global editorial director Lucia Rahilly about the benefits the best managers can bring—and about how to rethink middle management roles for maximum ROI.

This transcript has been edited for clarity and length.

Why does the middle seem so low?

Lucia Rahilly: Tell us a little bit about what it means to be a middle manager in the cultural mythology of work.

Emily Field: Middle managers get a pretty bad rap, but we know that managers are the single biggest determinant of employee satisfaction, performance, and perceptions of well-being. Middle managers matter, and we haven’t set them up to succeed.

Lucia Rahilly: Where do you think the middle-management stereotype originated? And is there any truth to it?

Bryan Hancock: I think it really started in the ’90s. If you think back to the career man or, occasionally, career woman of the ’50s, ’60s, and ’70s, it was a point of pride to be at the same company for years. Most people stayed in middle-management roles over that time. They were seen as the key people to communicate down from the top to make sure things were done through the rest of the organization.

But by the time the internet came along in the early ’90s, people were saying, “Wait, we don’t need a layer between us to communicate. We can communicate directly.” The coaching, the setting of direction, and the core things that managers did day to day were forgotten. Instead, the thought was that managers were possibly layering on too much communication.

Bill Schaninger: You needed scale during the US’s postwar era, when we were unchecked as an industrial base and fueling growth for the rest of the globe. You needed the ability to project leadership’s thinking.

Alfred Sloan of GM had this idea about replicable business units as a model. Everything was set up the same way, like a machine. It’s taken straight from the military. The people at the top made decisions, the people in the middle passed those decisions on, and the people at the bottom did the work. That went largely unchecked through the late ’70s into the ’80s. Then you started seeing things, like Bethlehem Steel going by the wayside. The model became way too expensive for most American companies to support. And when it came to reshaping and getting faster, it turned out that you don’t need seven layers of people to repeat the same message. That was the start of it.

How middle management became mission impossible

Lucia Rahilly: So why focus on middle managers now? What’s at stake?

Bill Schaninger: One reason, for sure, is the appearance that we can communicate to everyone as individuals all at once. Yet at the same time, we desperately need someone to help individual employees interpret that communication—particularly when we’ve had two years of those employees probably feeling and behaving more like vendors.

Bryan Hancock: The next evolution of technologies and productivity has me worried. Organizations have a choice with middle managers: Do we have them take on more administrative and individual-contributor work and focus less on their people leadership? Or do we reinvest their time into the things that we know matter most?

Administrative assistants never bounced back from the Great Recession—their work just went to the managers. Our research shows that administrative work is now a quarter of managers’ work. We need more time for managing as we look at productivity going forward.

Lucia Rahilly: In an environment where many leaders are asking folks to do more with less, is it realistic for middle managers to jettison that player part of their portfolio and refocus on coaching?

Bill Schaninger: Without redefining the role, that’s unlikely to happen. I remember when you had an assistant right outside your office. When someone took over my expenses, it was amazing.

Emily probably carries a dramatically higher burden of things to be done as a new partner than I would’ve ever been asked to do 15 years ago. But it doesn’t mean that she’s not also working harder than I did on studies. We just keep piling it on. It’s mission impossible.

Emily Field: Let me give you an example of a bank redefining the role. They knew the manager role had become unwieldy, and as they looked into it they found that just by having a direct report, every people manager had 105 tasks to do. Some of these tasks made sense for a manager: performance reviews and coaching. But there were other things, like simple approvals of credit cards or expense reports, that could have been automated. So they looked at what they could automate, eliminate, or make self-serve. In the end, there were very few things that required manager action. This freed managers up from administrivia, allowing them to focus on the value they do add: coaching, motivating their people, delivering on the strategy.

Bill Schaninger: Time spent on talent is high value. For some managers, though, administrivia is a great excuse to avoid scarier tasks. Filling out a form, while tedious, takes time away from the difficult coaching necessitated by, say, the three employees who may be a little problematic.

Bryan Hancock: About five years ago, many organizations went through time management training. A common lesson was “limit the size of the container.” So if managers had a lot of people reaching out, the idea was to block only three hours every other week for them, and to limit meetings to 15-minutes increments. They were actually being taught to limit their time with people in favor of administrative tasks. But we think it should be the inverse: limit the size of the container on administrivia and refocus that time on the most important thing, which is our people.

Flipping the script

Lucia Rahilly: What could and should managers do so that their role best adds value?

Emily Field: There’s the strategy side and then the people and coaching sides. On the strategy side, it’s really about setting direction, determining how work is going to get done, holding people accountable for delivering it, and challenging them to achieve more than they thought possible. This is about thinking through problem solving. On the people side of things, we want managers to be talent magnets and inclusive leaders. They should focus on the well-being of their teams and supporting their people. People should want to work with them.

Bryan Hancock: Think about any distributed network, like a set of schools, retail stores, or factories. Factory site leaders and principals are middle managers in these cases. They’re somewhere between the top and the front line. They’re translating and sense-making. But imagine a world where their career progression isn’t taking them to the next biggest factory, store, or school. Instead, what if we put our best managers in our hardest situations? That may not be the biggest retail store. That may be a midsize store that has the potential to be big. By thinking that way, we’ll have managers make the biggest difference and flip the script on what it means to be a manager.

Bill Schaninger: I was talking with a client who used to be responsible for running some big refineries. Her company’s idea of advancement was to promote people out of directly running those sites. But these were world-scale plants, and it made no sense to move capable people out of them. Why not park your best middle manager where you have real risk? If you have a legacy nuclear business, there’s no upside in growth. There’s increasing downside in risk as the equipment gets older.

Emily Field: Another thing to turn on its head is this concept that being a middle manager is a bad thing. I was talking with someone at a company about the book and she said, “Oh, I’m out of middle management. I’m really glad.” I said, “Are you a CEO? Are you a president of a business unit? How in the world are you out of middle management?” And when we examined the situation, it turned out that she was squarely in the middle, and I had to say to her, “My name’s Emily. I’m a middle manager too. It’s OK.” That’s actually a great place to be. You’re in the action and you can make it happen.

Lucia Rahilly: For most, the stuff of dreams is not middle management. How do incentives need to change? How do companies persuade folks to give that middle-management track a longer-term shot?

Bryan Hancock: It is, actually, the stuff of dreams. Really good managers love what they do, and think, “Hey, look, I have a choice. I can be here. I can coach my team. I can see how these people are developing. I can advocate to make sure we get the right resources. I can be the connector. I can be in the middle of everything.”

But they look forward and ask, “If I graduate from this role, what do I do? I can be somebody who’s in meetings 24/7, away from actually coaching people.” People conflate prestige with advancement with what they actually want to do in life; we’ve created a society where it is very challenging for people when somebody says, “Hey, I want to promote you out of management.” It’s very hard for them to say no.

Bill Schaninger: We’ve created these expectations of forward movement that make it difficult. In my own McKinsey career, the role of engagement manager was by far the best job I’ve had at the firm. The team needed me the most, I was directly involved in their improvement at the job, and I knew more about the client’s problem than anyone, especially the partners. The partners also needed me to make sure that they could sound smart in the meetings. I was absolutely central to everything, and everyone needed me. I loved that more than any job I’ve had since. However, I was committed to more money and more power, which meant I had to leave that job.

Bryan Hancock: Think about where middle managers are paid the most: sports. Your head coach is a middle manager. A basketball coach, for instance, is responsible for a team of 12 to 15 people, for making them the best they can be. They have assistant coaches but also a front office that they report to.

Yet head coaches are some of the most highly paid nonplayers in a professional setting. In college they are the most well paid; they’re paid significantly more than athletic directors or, in some cases, even university presidents. You don’t have a lot of head coaches chomping at the bit to get to the front office. Instead, they love their job motivating and engaging with people.

Emily Field: We’re putting more and more on managers’ plates. They’re figuring out how to convince people to come back to the office because of a top-down edict. They are responsible for people’s mental health and well-being, which they are not trained or equipped to do. Furthermore, they’re being asked to do more with less, especially amid layoffs.

So it’s a really nice rosy picture when it’s at its best. However, we need to fundamentally redesign the role and, more important, redesign the roles above these managers who, by failing to coach or develop their people, are part of the problem.

Bryan Hancock: I was having a conversation yesterday with a Stanford professor, and we discussed whether we were optimistic about new technologies and what they’re able to do to increase productivity and their effect on workers. In talking about middle managers, we questioned what we were going to do with the extra time when the next wave of technologies that come—whether generative AI or other things—can take tasks off your plate. What if we increase someone’s direct reports from eight to 16? We’d be getting more scale but not spending more time coaching. That’s the pessimistic view.

We hope that the next wave of technology actually frees up managers and gives them more time to be more effective leaders. But there’s a risk that, unguided, we end up in a world where managers spend even less time (as a percentage per employee) on coaching.

Managing might not be for everyone

Lucia Rahilly: So what would have to change in order for this vision that you’ve just presented to materialize?

Emily Field: We’re not saying that the person is going to do the same thing year over year. And that’s an important distinction: you can grow within your role, instead of up or out. Imagine this as a set of tours of duty across middle-manager positions where the person can have broad impact.

Lucia Rahilly: What about advancement for those who don’t want to take on middle-management responsibilities?

Bryan Hancock: Let’s think about it this way: being a great manager is equivalent to being really excellent at your trade—as you progress you should get to tackle harder situations, have responsibility, and receive commensurate pay. But at the same time, if you’re great on the technical track and an outstanding scientist, we shouldn’t make you manage people if that’s not your aptitude. There are lots of scientific organizations that promote people just because of their technical acumen.

We should explicitly create master tracks for technical areas and master tracks for managers. We can still have a general management track that progresses in a traditional way, but we need more pathways for people to do what they’re excellent in.

Lucia Rahilly: So most folks are promoted to the middle-management role on the back of individual outperformance. How can you tell up front who will actually thrive in a role? How do you select for those two tracks?

Bryan Hancock: Behavioral interviews.

Bill Schaninger: Observation, use of projects, special projects, tasks in the role. The first time someone does something shouldn’t be after they’ve already gotten the job. You can use special projects as training wheels and park them with somebody who’s really good at the job.

We give associates a summer intern to look after. They can help them structure their work, and get them set up for problem-solving meetings. There are small micro behaviors that you can have them practice on somebody. And then you just start building on that.

Bryan Hancock: I also think it’s a bit of a fallacy to say that people haven’t managed if they haven’t managed within your organization. For instance, people who were captains of their college sports team—they were managing. They were the ones leading the off-season workouts, organizing and motivating the team. Also, people who founded or led a club. There are lots of markers, whether in high school or college, where you’ve worked in a team and had some leadership responsibility. You can cover that in interviews.

Emily Field: And, of course, does the person like managing people? In the world of multiple tracks, you give people agency to choose their own adventure. What gives them energy? How do they connect their purpose? I was talking to a chief technology officer who said that his biggest regret was putting great data scientists and technologists into people manager roles. He was trying to quantify the amount of value he lost by taking them out of what gave them energy.

Bill Schaninger: One more point: if we could just allow a little slack in the system, people could go on vacation and not be bothered, they could go to a training session, and they could do more of the stuff that they really want to do and be great at it.

Bryan Hancock: There’s one practical thing I’ve seen companies do that I thought was good for creating slack in the system: no-meeting Wednesdays. They’re saying, “We can’t fix all of the bureaucracy, but we can at least stop meetings on this day to create some space so we can think, so that we can have the informal check-ins to actually lead our people.”

Lucia Rahilly: Emily, given the reality of gender dynamics in the contemporary workplace, do you see a risk that women will end up disproportionately occupying that middle tier? Afterall, we’re talking about a very people-oriented role, and women tend to be perceived as having strong soft skills and better EQ [emotional intelligence].

Emily Field: If we could get more women to middle management we would be in a better position anyway. There’s actually two broken rungs for women: one is getting them to the first manager level, and the second is advancing them. If I could get more women to manager positions, then that would be step one in solving gender equity.

The benefits of the best managers

Lucia Rahilly: What about addressing the talent gap? If you have a good manager, presumably that manager is helping ensure retention, keeping folks engaged, and so forth.

Emily Field: A great manager is a coach, not a taskmaster. They’re really helping connect people’s work to their purpose. They’re thinking about their specific goals and what their objectives are and how the work all fits in.

The value at stake is huge. When we compare top-quartile companies to middle-quartile companies relative to their health, we see a three-times increase in total return-to-shareholder value at companies with healthy management practices. These are things like fostering creativity and innovation. These are basic things, like being a supportive leader who consults their employees on matters that are relevant to them. These things help move from being transactional to being about the interaction.

Bryan Hancock: I’m a lawyer by training, and early in my career I remember one firm had a challenge in how it was engaging and motivating the associates. In our interviews with some of the law partners, they referred to the associates as “FBUs”: fungible billing units. It’s a problem when you have managers thinking of associates as FBUs and measuring output per FBU.

At the same time, they were asking, “If we’re prestigious, why do we have trouble attracting people on campus?” It’s because people know. There are other places where you can go to see how new employees and others in the organization feel. And it’s going to be hard to get people to come.

But now extrapolate: How many organizations think of their workers as their equivalent of FBUs? One of the top factors in our Great Attrition/Great Attraction research on why people stay or go is whether they feel valued by their managers. How valued would you feel if you’re an FBU?

Lucia Rahilly: The three of you get into more detail in your book Power to the Middle, but before we finish, what is your favorite example of what it looks like when a manager successfully makes that move right into the beating heart of the organization versus slouching toward the vanishing point of retirement?

Emily Field: Let me tell you about two managers in the exact same organization. The return-to-office edict came; people needed to return to the office. One manager said, “Everybody back to the office five days a week,” and his team took this so literally that they said things like, “Well, I’m in the field with customers. What does that mean?”

And the manager said, “Let me check.” Another manager, same team, similar remit, said, “Be with your customers. That’s how you’re having value. Also, let’s think about this as the spirit of the law, not the letter of the law. Let’s do good work.”

Let’s think about the right times to come together. Two managers, same team, right? Think about who you want to work with. I’d want to work with the manager that’s actually saying, “Let’s do the work together. Let’s have impact. And let’s not worry so much about exactly where we are.”

Bryan Hancock: One of the best examples for me comes from a home healthcare setting. They think of themselves as a group of social entrepreneurs that are helping their clients —their patients —be at home. They see their mission as reaching more and more people. When they talk about their business they don’t think of it as a business. They think of it as a social mission. They have inspiration through the roof. People will go through walls to help those patients. And they’re not focusing every day on an abstract view of the metrics.

In every organization, you need a balance of inspiration and actually making sure things work. All organizations would be well served to take a step back and see if they have that balance. In many organizations, the balance is more toward the process and numbers. It’s a little less about the mission that makes people excited and willing to go through walls to make things happen.

Lucia Rahilly: Thanks so much for being with us today.

The post "The future of middle management" appeared first on McKinsey Insights


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