Corporate Learning Strategies

Daniel R. Tobin, Ph.D.

 


New Roles for Middle Managers

Copyright 1998 Daniel R. Tobin

As companies around the world have struggled to survive in difficult economic times, many have chosen to reduce the size of their workforce by eliminating one or more layers of middle managers. While many companies have traditionally had very steep bureaucracies, with too many levels of management, simply eliminating large numbers of middle managers by firing them or offering them early retirement is, from my point of view, a mistake.

In stripping out levels of middle management, companies often discard large groups of employees whose knowledge and experience cannot be easily replaced. These "expendable" middle managers often have:

         A decade or more of experience in the company.

         Outstanding achievement records (or they would not have been promoted to middle management).

         Unparalleled knowledge of the company, its products, its customers, and suppliers.

         More knowledge than most others in the company about how things work and how work gets done.

         Substantial insights about how the company's business can be improved.

These middle managers are, therefore, among the most valuable knowledge assets within the company. So while the company may no longer need as many middle managers to run its business, it can be harmed by tossing these assets aside. Knowledge assets cannot be replaced easily.

Alternative roles for at least some portion of these middle managers can maximize the company's return on these valuable assets, and on the large investments the company has already made in these people. The transition to new roles will not come easily to middle managers. They will need to deal with their own perceived loss of rank, status, and privilege, at the same time refocusing on a whole new career path.

In one company, a group of middle managers were assembled and told that their jobs were changing. While none of them was being fired, they would be given other roles and responsibilities as individual contributors in various functional areas. One manager asked, "What am I supposed to tell my family?" with obvious emotion in his voice.

In a later one-on-one meeting with a senior company manager, he explained, "I am one of ten children, and the first to get off the farm and go to college. My family has followed my career in this company with great pride, celebrating each promotion, each step up the ladder. Now, I'm no longer on the ladder. What am I going to tell my parents, my brothers, my wife, my children?"

Even while defining new roles for former middle managers, companies need to pay attention to the psychological effects these changes have on their employees. There are many possible alternative roles for these former middle managers. My focus will be on three specific roles:

         Teacher

         Intrapreneur

         Strategic relations manager

 

From Middle Manager to Teacher

To succeed in becoming a learning organization, implementing TQM or business process reengineering, almost everyone in the company will need to learn one or more new sets of skills. Middle managers, by virtue of years of company experience, often make very effective teachers. Even if they need to learn the subject matter before being able to teach it, they can immediately make it relevant to the company's culture and business issues, and to the concerns of the many employees who, like themselves, are struggling to understand how they fit into the new model.

The transition from middle manager to teacher requires helping the middle manager learn both the subject matter to be taught and basic instructional skills. But this is a relatively small investment as compared with the company's other choice: trying to furnish an external instructor with the knowledge of the company's culture that is already second nature to the middle manager because of his years of experience.

Not every middle manager can become an effective teacher. Some managers will disdain the opportunity as not being a suitable replacement for their former roles. Other managers will lack the basic communications skills needed to be an effective teacher. And others will opt for other roles being described here, or will leave the company for employment elsewhere. For those few who do choose this new role, the benefits to themselves, their students, and the company as a whole can be outstanding.

From Middle Manager to Intrapreneur

The "intrapreneur" is a hero of business. He is the person who comes up with an idea for a new product or service, usually related to the company's primary business, which brings new opportunities for profit and market share to the company.

Surveys of middle managers have shown that they have many ideas for improving aspects of their companies' business and for new opportunities for their companies. The old, hierarchical structure of many companies did not provide any avenue for these ideas to surface. In the transformed corporation, these ideas will easily make their way into the discussion arena.

Rather than handing middle managers their severance packages as they are escorted out the door, companies should give managers an opportunity to develop some of their intrapreneurial ideas, suing a five-step plan for this process:

         Step 1: Identify a group of middle managers whose jobs are being eliminated.

         Step 2: As an alternative to the severance package, give them the opportunity to develop one of their own ideas for a new business into a business proposal

         Step 3: Provide them with an intensive course on develop a business plan.

         Step 4: Let them continue to use their offices and support services as they develop their plans.

         Step 5: Have them present their plans to a committee of top company managers. If the proposal is accepted, they stay and lead the new business effort. If the proposal is not accepted, they leave the company with whatever they have remaining of their severance packages and are allowed to take their business plan to other companies.

Not every middle manager whose job is being eliminated will take this option. But this program can be very empowering for those who choose to participate, and may be very profitable for the company with little risk or extra expense being assumed.

 

From Middle Manager to Strategic Relations Manager

Few companies today are totally vertically integrated -- totally self-reliant for everything from raw materials production to after-sales service. Today's business world is one of interdependence, with value chains encompassing many suppliers and customers who may be scattered around the world. As companies strive to transform themselves, they also must pay attention to the external segments of their value chains, forming strategic relationships with key suppliers and customers. These strategic relationships can take many different forms, such as:

         Certifying key suppliers according to the company's new quality standards.

         Working with both suppliers and customers to facilitate both incoming and outgoing just-in-time (JIT) deliveries.

         Forming basic research partnerships with other companies or universities, focused on new materials or manufacturing methods.

         Developing new sales channels in foreign markets.

         Developing joint ventures to enter new markets.

These and many other types of strategic initiatives, which are increasingly vital in forging a company's future, have often gone wanting for lack of interest or manpower. Why not focus some of the energies and capabilities of former middle managers on building and managing these and other types of strategic relationships?

There are many key strategic roles that former middle managers might play that will enable a company to continue obtaining a return on their investment in these people. For example:

         Many large companies have found it necessary and desirable to provide quality-related training and consultation to their suppliers -- especially small suppliers who do not have their own training staffs.

         Many companies have formed industry consortia to fund research and development activities that they cannot afford to do alone.

         Other companies have formed university-based consortia to fund research into future management, information technology, engineering, or manufacturing technologies and practices.

There is virtually no company that cannot benefit from such partnerships and collaborations. These types of programs are extensions of the learning organization, in which companies are harnessing the knowledge of people outside, as well as inside, their own organizations.

 

Can All Middle Managers Be Saved?

As companies look at their flattening pyramids, thousands of middle managers are being caught in the crush. The fact is that many of today's middle managers are so stuck in their ways that they won't be able to change, to adapt to new work methods, new relationships, and the new types of roles being described here. The flattening of organizations is long overdue, and it is doubtful that even combining all of the new roles in any one company will provide enough new opportunities to save all former middle managers. But even if these new roles create opportunities for only 10 to 25 percent of the displaced managers, the company will be accomplishing a number of important goals:

         It will preserve its investment in these long-term employees.

         It will be utilizing these valuable resources to build the company's future, at the same time demonstrating to its employees and stockholders that it is open to new ideas.

         It will be sending a clear and important message to all of its employees and stockholders that it is concerned not only with cutting current costs, but in creating a real, exciting, and profitable future as well.

 

 


Dan Tobin welcomes your reactions to and comments on this article. To send him e-mail, click here or send email to DanielTobin@att.net.

 

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