leadership | Article

4 Reasons Companies Need Middle Managers

A lot of companies are “flattening” their management structures, and it may be more detrimental than it seems.

One might call it the “Great Flattening,” if you are into buzz words that is. Companies like Meta and Shopify have been eliminating layers of middle management. But the truth is that this is not a new movement. CEOs have been trying to cut down on the number of middle managers for decades.

These changes are said to be for the sake of efficiency. The reality? Organizations need middle managers. There are many ways middle managers make large organizations function successfully!

1. Seeing both sides

Middle managers have a close look at multiple perspectives within the company. They directly interact with both their direct reports and upper managers. That means they can connect with and understand both sides. As the connecting person, middle managers can serve as mediators. They can facilitate conversations when agendas and opinions are conflicting at different levels. Empathizing with both sides also comes a lot more naturally for them.

2. Amplifying direct reports’ voices

Since they can empathize and connect with both sides, they can serve as a voice for “the little guy.” The voices of individual contributors can sometimes be unheard or lost in all the noise. Middle managers have the opportunity to listen to the concerns of a select few. People are more likely to voice their opinions and issues to their direct manager that they trust rather than upper management. In turn, upper management is more likely to listen and take action when another leader can sit down with them and provide details.

3. Expanding engagement and recognition

When you have middle managers, everyone has less direct reports. Being responsible for less people means being able to invest in and meaningfully engage people more frequently. Researchers found that direct supervisors were responsible for 76% of the variation in team engagement. Executives accounted for only 11%. Immediate managers can engage employees more frequently in many ways including recognition. Upper management will not have visibility into the day-to-day moments worth highlighting so recognition may fall short with less middle managers.

4. Better company performance

We also know middle managers positively affect a company’s performance more than executives. Take the gaming industry for example. Designers invent and build the games, so they are the innovators. Producers make sure projects are delivered on time and on budget, so they are the managers. One study showed that producers accounted for 22% of the differences in revenue across games, while designers accounted for only 7%. This means high-performing innovators alone are not enough. Managers are needed to integrate and coordinate all the innovators’ great work.

What happens if you get rid of middle managers? Will voices be lost, issues go unresolved, engagement drop, and performance suffer? These are all potential risks. While we cannot say for certain these are the negative effects of cutting out middle management, we do know one thing. The number of direct reports most managers can effectively oversee is 10. So, at the very least, ensure you have enough managers for people to lead effectively. Then figure out what structure will help all your employees thrive!