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Over the past few months, I have found myself having one conversation over and over again: How does a founder / leader know when their company is ready for a middle management layer? To be honest, I could make an argument that if you are asking the question at all, it is probably already time! But the world is rarely that simple. Fortunately for anyone curious to explore this question in more depth, I have plenty of additional thoughts to share!
Of course, the best starting place for a topic like this is probably always going to be “why?” and it’s partner, “why not?”. Why are you thinking about middle management right now? Why does the idea of adding a layer to your org structure appeal to you? Why might you want to hold off on making this particular change?
Enough layers of Why and Why Not can inform both a go / no go decision and lay the foundation for how to introduce the org changes if and when you move forward. That does, however, also raise the questions of when to put your plan into action and where your theory will need adapting as it meets reality. But let’s take this one step at a time.
“Why?” can take many forms in this context but simply being able to express why middle management is being considered at all can go a long way towards answering “should we?” and “if so, when?” For example, the answer very often boils down to a leader recognizing that they are spread too thin to effectively support their team members while simultaneously guiding the strategic direction of the organization. Solopreneurs and employees in companies must balance daily work with big picture concepts but as roles become more focused and specialized, balancing day to day with big picture becomes increasingly challenging. This tension is often the key breaking point that triggers the need for a middle management layer.
The principle comes back to the role of middle managers. There will almost always be a front line layer of individuals who are tasked with ensuring day to day delivery and success for a given organization. At the other end of the spectrum, someone will perpetually need to shape long term vision, defining and tracking the North Star. Where middle managers become particularly crucial is when there is also a need for someone to tie the two concepts together.
The other most common driver I hear from founders is mentoring and support for individual contributors. Very small organizations tend to be most effective when each individual is a self-starter and operates largely independently. But again, as roles become more specialized, there is often a need for more junior, more focused team members. These individuals are also often lower paid, which can be appealing, but they require more direct support and guidance to be most effective. As the number of employees in these more junior roles increases, a single leader will struggle to provide sufficient support. Introducing a middle management layer can increase the effectiveness of the front line team members dramatically.
In short, middle management allows front line workers to focus on tactics while the most senior leaders keep an eye on the strategy. By focusing on empowering and unblocking team members, they can be powerful forces for efficiency and productivity – for front line workers and senior executives alike!
Although often tightly coupled to the “Why” answers, explicitly exploring “Why NOT” can also offer useful insights. The most common reasons I hear are cost, connection, and culture. Each can be a valid cause for concern but rarely are they truly blocking issues.
There is a somewhat ironic phenomenon where the same budget pressures that often lead to more junior, specialized team members can make leaders reluctant to hire the middle managers needed to make these team members most effective. The math here can be relatively straightforward and requires amortizing the middle manager’s salary across the number of team members and determining whether the increased effectiveness will justify the increased cost. When you also factor in the increased bandwidth of whatever senior leader or founder is currently providing the low level support, the cost numbers will almost always be in favor of hiring a middle manager if their team will comprise at least 5 members.
Despite the relatively quick return on investment, however, I rarely see leaders consider the value of hiring middle managers. Of course, the cash flow must be available to make the hire at all but effective managers are value multipliers rather than pure cost centers.
In small teams, it is common for everyone, including the founder / leader, to form strong bonds and relationships. This will generally serve an organization well but can make it very difficult for that leader to step back and allow someone else to take on the reporting relationship with team members who have been directly tied to them for years. Unfortunately, there is a tricky balance between loyalty based on longevity alone and the evolving needs of a growing team.
Accepting that a growing business will eventually require some long tenured team members to report to middle managers is often easier done in the abstract than in practice. The earlier and more often a founder can start tackling these concepts at an emotional level, the better served they will be. Finding the balance between personal connections forged through shared business experiences and the appropriate working and reporting relationships will always be a challenge but falls short of justification to avoid changing the relationships entirely.
At first glance, culture and connection may seem to overlap but culture looks beyond the individual relationships with the founder or CEO. When everyone reports into a single person, that individual also has significant influence over the relationships between the employees. As middle management enters the picture, each individual ends up with less direct influence on the overall culture – even the Founder / CEO.
Relinquishing control of the culture can be terrifying but is somewhat inevitable as a team grows. One way to address this concern is to be more explicit about the organization’s values and norms so that new employees and those without a direct connection to the Founder / CEO can understand and perpetuate the desired culture. The largest challenge here will be tackling situations where someone is deviating from the desired behaviors. Would you be willing to fire your best employee over a culture mismatch? If not, then the cultural element in question may not be as fundamental to your organization as you would like to believe.
After thoroughly exploring the Why and Why Nots of Middle Management, leaders can make a more informed decision about if and when to add a middle management layer. If the decision is to hold off, hopefully a clear set of criteria will have emerged for when the go decision will make more sense. If the time has come to introduce middle management, the answers to the questions can provide a clear framework for setting expectations across the organization.
When it is time to move forward, I would like to offer one last word of caution: if you are promoting team members into these roles rather than hiring, be sure to carefully consider capacity. All too often, I see leaders ask a top individual contributor to take on middle management responsibilities without taking anything else off of their plates. If the individual had extra bandwidth before, that can be a reasonable arrangement. But when an employee is working at full capacity already, adding to their workload without finding a broader balance sets everyone up for failure.
With a clear understanding of why middle management is right for your organization and clear plans to overcome the objections and avoid the most common pitfall, you’ll be ready to move forward. Good luck!