I have been engaged with some very interesting debates over the last few weeks on the subject of leadership and the shift in the leadership models within business today.
I think it is clear: a company needs leaders—not managers. From the top down, every employee has the opportunity to lead, starting with the organisation of one within the larger organisation that we call “Mr Me, Ltd.” Every person is responsible for shaping and creating their own future with collaboration and some help in the making.
What does that look like? We trust and then we empower. You know how leaders will typically say “I empower my people”—and then they do not? The tendency is all too common. The minute there is a mistake it’s like a rope around your neck that rebounds back—you either get your head taken off, or you get pulled back so hard the natural reaction is to buckle down and become “less engaged” instead of growing to “maturing growth.”
At this point, your entire company is flat. With no hierarchy, everyone leads within their areas of stewardship and responsibility. Many will have excess capacity and offer to help another teammate or even go to another department to ask how they can help.
Then there is the temptation to micromanage, which makes people so fearful of making a mistake, they do not dare create something courageous.
Top-management greed is corrosive but in some important sense the greed is not systematic. There are certainly many firms, doubtlessly a majority, where those at the top are sensitive to these issues and believe in shared pain and some measure of equity. There has, however, been a structural shift in the circumstances of middle managers, which leads them to feel more distant from their leaders.
This is the disruption of career paths and the increased difficulty in making a move from the middle to the top. Middle managers today have less reason to believe that they are on a trajectory that will take them to the top and, therefore, they have less reason to identify with their bosses.
Just who are middle managers? It is important to note that though middle managers make many decisions, and many important ones, the context in which they make those decisions is not of their own making. Middle managers do not set the organisation’s strategy, nor do they decide which markets to enter, with whom to merge, how much to invest, and what technology to use.
Senior managers, in the words of Harvard Business School professor John Kotter, “set agendas,” and in doing so shape the direction of the organisation. Do middle managers do anything similar? In fact, it turns out that the answer is “Yes.” They make decisions about resource allocation that are central and strategic, albeit at a lower level and with much less visibility than decisions made by senior managers.
We live in an era in which CEOs are glorified. It would be foolish to argue that the CEO is not relevant to organisational performance and it would be equally foolish to claim that no firm should ever reduce its managerial ranks. But the fundamental spirit of the times is wrong. As a group, middle managers are central, indeed crucial, to an organisation’s success.
Most sizable organisations have a management hierarchy that includes several if not dozens of managers, below the executive team or owners. As organisations have found ways to recover from the global recession and remain competitive, the costs of a significant management structure becomes questionable. Some would argue that middle management is no longer necessary and should be abolished.
A number of significant organisations are downsizing or removing middle management structures. For example, the digital-security giant Symantec has completed a restructuring process that saw middle management reduced by as much as 40%. The world’s biggest appliance making company, Haier, in China, has reorganised the company’s workforce into 2,000 self-managed teams that are responsible for not only production but for profit and loss and they are paid on performance. Online retailer Zappos, a company obsessed with customer service has moved to eliminate traditional managers, done away with the typical corporate hierarchy and job titles, and now has an approach that has been termed “holacracy.” This move gives employees more of a voice in the way the company is run.
It may be an ideal time to re-examine the purpose and structure of management for organisations, one that better suits the times and needs of modern organisations and their customers and employees.
I like Jack Welch quote that states “Leaders are generally not judged on their personal output. What would be the point of evaluating them like individual contributors? Rather, most leaders are judged on how well they’ve hired, coached, and motivated their people, individually and collectively—all of which shows up in the results.”