Middle Managers Drive Business Execution

Middle Managers Drive Business Execution

Research published by Wharton University asserts that middle managers are the most important people in your company.  CEO’s need to pay close attention to hiring and keeping the right middle managers, because front line supervisors have a greater impact on company performance than any other role.

The research focused on companies in knowledge industries like computer gaming, software, consulting, biotech, and marketing. These emerging industries rely more on knowledge and innovation than on process and assembly lines. 

Contrary to common belief, it is not the highly-skilled creative individuals who make the biggest difference in these knowledge industries, nor is it the CEO. Rather, it is the abilities of the middle managers which has the largest impact on company performance.

This performance dividend stems from the key role that middle managers play in project management, providing corrective feedback, coaching individual performance, and supervision of performance standards and deadlines. For sure, this is not the most glamorous side of a business, but it is where the key to higher performance lies. 

Middle managers coordinate the work of others and play a key role in fostering innovative and creative team environments. Unfortunately, when companies downsize, the much-maligned middle management roles are usually the first to go. This is a mistake.

The research followed talented middle managers who switched employers and found they had a profound impact on performance in their new firm. Their transferable skills are useful anywhere. It is clear that companies need to pay more attention to getting the right people in middle management roles and rewarding them appropriately.

We’ve probably all experienced working for bad middle managers – like the ones you see in the Dilbert cartoons – but that is the fault of the company for not hiring the right people to fill these critical roles in the first place, and not providing them with appropriate management training.

While the business media loves to make heroes out of the top leadership, interestingly, the impact of CEO’s and other top-level executives account for 5-15% of the variation in performance between firms. Yes, the top leaders set the strategic direction, the core values, and the overall tone of how the company is run – but it seems they account for relatively little of why some companies perform better than others. 

Middle managers have a tough job. They are the meat in the sandwich. They have to execute the strategic plan and implement change – even if it may be unpopular with their people. They manage a finite set of resources. They have boundaries to the types of decisions they can make. They have to make sure information flows up and down the company. But, ultimately they are the ones who make sure the company achieves its goals. 

Are you providing management training to grow the practical skills of your middle managers?

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Until next time…
Stephen

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