Why middle management appears, and how to build a future without it.
You’re a developer working on the Foobar feature at company X. Unbeknownst to you, Genghis, the company CEO, just had dinner with other industry leaders and became excited about this new thing called Beezlyboo. Genghis mentions his excitement at Thursday’s executive council meeting, with the company’s top layer of middle management listening in.
Mandukhai, the middle manager two layers above you, was present. She conveys the takeaways in her regular Friday morning coffee catchup with the managers that report to her, including the Foobar team lead, your boss, Subotai.
Fighting for relevance after a bumpy year, Subotai grows convinced that working on this Beezlyboo thing might be his ticket back into Mandukhai's good graces.
You enter the office on Monday morning, unsheathe your sword, and balance it carefully on top of your monitor before sitting down and getting to work. Little do you know that two weeks from now, half your time will be spent on this new thing called Beezlyboo.
This is an unfortunately common description of how decisions are made in many of today’s
Khanates companies. Why is that? Let’s take a look at how communication and decision making evolve as companies grow larger.
Here’s how many companies begin:
Two founders, working closely to get their new startup off the ground.
A more mature company might look more like this:
That’s Google circa 1999. Individuals hold increasingly defined roles. Management and process are beginning to creep in, but all anyone really wants to do is get on with things, management be damned. Grabbing a colleague to discuss something is as easy as shouting across the office.
But as companies grow larger, the majority end up looking more like this:
See those ‘o’ nodes? That’s middle management. Layers and layers of it. Its main purpose is to simplify decision making and communication by concentrating ownership of different parts of the business in the hands of a select few.
The benefits are clear. When CEO Genghis or Kublai, another middle manager, want to figure out what’s going on with the Foobar team (highlighted above in Millenial pink), all they need do is call Subotai. By concentrating ownership of Foobar in Subotai’s hands, his team is shielded from unnecessary communication, allowing them to focus on their work.
But there's also an obvious downside: poor decision making. While the ‘x’ nodes focus on the work at hand, the ‘o’ nodes are busy talking and aligning amongst themselves. This creates two problems: the ‘o’s lose touch with the actual work being done, while the ‘x’s cannot easily see, communicate, or influence beyond team boundaries. Which, remember, is why you’ll be surprised when Beezlyboo lands on your desk in two weeks' time.
So far we've been talking about idealized companies. In reality, there are informal networks that permeate company hierarchies. There are also good and bad ‘x’s and ‘o’s. We know a lot about what a good ‘o’ is (or should be). There’s an entire industry out there dedicated to this, complete with degrees (MBAs) and reading material (those management books you tend to find in airport bookshops).
One thing ‘o’s obsess over is how best to organize things, which is great. That's their job, after all. The problem is that their solutions are often clunky. Do any of these sound familiar?
If these solutions sound drab and disengaging, it's because they are. Ronald Coase, the 1991 Nobel laureate in economics, published an influential essay in 1937 on why firms even appear, and mentions that the benefits of larger firms are quickly outweighed by the overheads of maintaining their complex hierarchies and the misallocations of resources which stem from this. In a more modern work, Gary Hammel and Michele Zanini demonstrate in Humanocracy -- another one of those airport books -- that:
They argue that, if we could repurpose a fraction of this managerial bloat into more productive pursuits, we would free up a lot of unproductive excess wages and therefore raise productivity, overall compensation (for the rest of us), and employee engagement.
With everyone and their cat — not to mention the OECD — talking about the Future of Work these days, isn’t it time we began trying to tackle company organization with more pizazz? You know, just throw some tech and AI at it.
He's right: here we go.2 One of the most significant transformations due to play out over the next decade is the death of email in within-company communications and its replacement by tools like Slack and Teams. Not only do Slack and Teams introduce a new medium for companies to communicate in, they also allow for modern third-party integrations via their APIs. That’s something email tools like Gmail or Outlook never quite got right.
On top of this, there's an unfolding generational shift. Millennials will continue to graduate to positions of power as the 2020s progress — and they’ve grown up using online chat protocols and social networks.
Let's take KYT as an example. It's a fantastic tool that takes the magic of being a good 'o' and pours it into a suite of effective communication tools to help you manage your reports. Backed by years of research and a kick-ass CEO in Claire Lew, KYT is a great example of a company pushing the envelope of how we think about management.
So if fully connected graphs don't scale, and if tight hierarchies are inefficient and soul-crushing, what else is there?
Say you're a middle manager. You report to someone, a few others report to you. A good chunk of your time is spent synthesizing information (mostly updates) flowing across your node in the graph, from the top down and from the bottom up.
This is where we come in. At Middle Out, we're working on a solution that analyses user conversations, summarizes important segments into updates, and proposes these updates to users for final editing and approval before making them visible to the rest of the company. We then take these updates and show each user the ones our model believes are most useful to them. This is tantamount to getting rid of the fog-of-war that shrouds parts of any company from individual employees. In short, you'd see Beezlyboo coming a mile away.
Now for the cool part. By having access to updates from across the company, we can quickly call to arms disparate employees to begin working on something together. That's open allocation at scale and we're working on a tool to facilitate that too.
We go from static graphs to dynamic ones which adapt to what you're working on and what's relevant to you right now:
We still need some human managers. Why? Because things like leading a team in a new direction, passing on knowledge, pastoral care, and motivating others are all uniquely human abilities. They're also all abilities that great managers tend to excel at.
In short, we'd like to see a world with flatter hierarchies where employees self-organize and decide on direction together, aided by a smaller set of experienced managers.
Want to be part of this future? We're building it as we speak. Join our slack community, or register to our mail list.
You can reach us at email@example.com