If your company is typical, the size of your middle-management team will be shrinking soon, if it hasn't already. As management guru Peter Drucker observed last year in the Wall Street Journal, "An article in the Harvard Business Review 30 years ago asked: 'Is Middle Management Obsolete?' and answered a resounding 'Yes." But instead of disappearing or even shrinking, middle management has been exploding in the last few decades. In many companies, the 'middle' between first-line supervisor and the corporate top has been growing three or four times faster than sales, even before adjustment for inflation."
And this is not just a big-business problem, he notes. Even small family-owned companies have developed a middle layer that once was just family. Companies have associate and assistant administrators, and a vast array of managers and directors with titles that were not even invented until recently. "In 1950, at a liberal-arts college I know," Drucker recalls, "five secretaries did the same work now being done by eight deans, assistant deans, and assistant vice presidents--and did it very well. Back then, many large companies had only one vice president. And title inflation has been even worse in the military and in state and local governments."
Since then, younger people entered the managerial labor force in large numbers, and older people had to be promoted to make room. "As entrace salaries for the young, highly educated ones went up, the older ones had to be given raises and titles to go with them.
"As a result, middle managements today tend to be overstaffed to the point of obesity (and Europe may be even worse). This slows the decision process to a crawl and makes the organization increasingly incapable of adapting to change." Let people fire themselves
Luckily, the baby-boom push of young leaders is waning, Drucker reports. "By the end of the decade, the supply of young managerial candidates may be 30 percent below what it has been in the last several years. Thus, now is the time to start middle-management weight control."
Attrition is one easy solution. As jobs become vacant through retirement, death, or resignation, don't automatically fill them, Drucker recommends. Or study them either. Just leave them open for six or eight months and see what happens. Then, u nless there is an overwhelming clamor for filling the job, abolish it.
Every additional level of management, Drucker believes, increases rigidity and slows the decision-making process. "It's a law of information theory that every 'relay' (level) halves the information trasmitted and doubles the noise. Levels (of management) should increase much more slowly than numbers (of those managed), if at all."
The "90-day wonder" is about to be replaced by the person with years of experience. "We may well see the return to the old rule that people aren't ready for a promotion unless they already know enough about their new job to perform it without supervision after a very short time. Broader horizons
A second way to reduce middle-management bulk is to substitute job-enlargment for promotion. Ten and 20 years ago, we were forced by rapid expansion and a shortage of young people to promote young people as soon as they showed 'promise,' Drucker explains.
"But now the pipelines are full. How much promotional opportunity is there for the eager and brilliant vice president of 31 who reports to a senior VP of 38? The only way to provide satisfaction and achievement for these young people is to make jobs bigger, more challenging, more demanding, and more autnomous, while increasingly using lateral transfers to different assignments, rather than promotions, as a reward for outstanding performance." Fighting dry rot
In a subsequent WSJ article, Drucker expanded on his philosophy of how to cope with middle-manager spread, particularly where the problem is complicated by business conditions of no or slow growth.
"Once a company or an industry ceases to attract and hold competent people, dry rot sets in, resulting in long-term decline that is exceedingly difficult to reverse. Even in depression times, competetent people do not stay where they have no challenge and no opportunity and do not see achievement and performance recognized."
Jobs must be made bigger and more challenging, particularly at entry levels. "In the past," he notes, "we tended to make entry-level jobs small and easy, and to build layers of management to give close supervision to inexperienced people."
Today, things have changed. We can no longer stress promotion to the exclusion of everything else. "We will have to learn again that recognition, both through money and other means, has to motivate to improve performance on the job. Indeed, in the no-growth company, a vacancy is an opportunity to abolish a job or a management level, rather than an opening for a promotion." The old versus the young
In the US, Drucker feels, it is possible to put a younger person in charge of an older one, although this is almost impossible anyplace else. But it's not easy. "Unless the middle-aged who are not going to be promoted further are moved out of the management ranks, younger people will be blocked behind them and will either leave or, worse, retire on the job and turn rancid."
Such people have to be palced in a second career. "These people are not burnt out; they are simply bored and need to be repotted." They need the challenge of a new job, a new environment, and new associated.
How do you accomplish this in a low-growth situation? "If the business does not grow bigger, it must grow better," he replies. "Any organization needs challenging goals. If the goal is not to dougble in size in 10 years, it can be to improve productivity, something that acan always be done--with a commitment all the way down from the top, and to conscientious, hard, unspectacular work day in and day out. The company that works seriously on its productivity will have the means to reward its people."
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|Publication:||Tooling & Production|
|Date:||Jun 1, 1984|
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