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An inside look at the alienation of middle managers—and why that's bad for business
The Truth About Middle Managers:Who They Are, How They Work, Why They MatterBy Paul OstermanHarvard Business Press; 189 pp.; $35.00
For well more than two decades, middle managers have been one of the whipping boys for all that ails Corporate America. In their 1993 management manifesto, Reengineering the Corporation, consultants Michael Hammer and James Champy argued that advances in technology and processes rendered these modern Organization Men obsolete: They had simply become impediments to the forward march of corporations. Other gurus were even less charitable. Tom Peters declared himself a card-carrying "middle management basher," and Peter Drucker opined that "middle managements today tend to be overstaffed to the point of obesity." All this in turn led to a counterwave of sentiment among many middle managers, who felt they'd been victimized by consultants eager to sell CEOs an easy fix for their companies' inefficiencies.
The latest entrant into the debate is Paul Osterman, a management scholar at MIT's Sloan School of business and the author of nine previous works on organizational change and economic policy. Admittedly, Osterman has a history of siding with the hoi polloi. He argued in earlier books that the rank-and-file haven't received their fair share of the economic spoils, and he has offered templates for creating more innovative unions and reenergizing progressive politics. Jack Welch he ain't.
That caution aside, his new book, The Truth About Middle Managers, offers some illuminating insights about managers' value. Osterman interviewed roughly 50 middle managers at two major Boston companies: Fleet Boston Financial (which was in the throes of being acquired by Bank of America (BAC)) and a technology business that's unidentified beyond the hint that its founder had retired roughly five years earlier. And while Osterman's subjects were randomly drawn from lists provided by each outfit's human resources staff—creating the risk of pro-company biases—the author tracked more than a dozen of these managers over the course of a year. That allowed him to be there when some were reassigned or—in at least one instance—laid off. The result is that The Truth About Middle Managers doubles as a scholarly work and an oral history of today's Organization Man.
Some of Osterman's findings simply confirm the consensus view within the popular press: The middle managers he interviewed were to a man—and woman—resentful of the outsize pay and parachutes afforded top executives. As a result of endless restructurings, few harbor much of an emotional attachment to their employers. "Virtually no one is 'of the corporation,' " he writes.
Perhaps surprisingly, few of these managers voiced any desire to climb any farther up the corporate ladder. Osterman perceived this as a reaction to the flattening of management structures and CEOs' increasing tendency to fill executive posts with outsiders, such as the retailing experts BofA imported from Wal-Mart Stores (WMT).
Despite the lack of advancement, Osterman found that all still demonstrated a "strong craftsman commitment" to their jobs—meeting client needs and mentoring direct reports. But he deemed their overall combination of attitudes "limiting and disturbing." To the author, "it means that the managers are neither truly committed to their employers nor fully engaged in executing the firm's strategy."
That CEOs have engendered this mindset concerns Osterman. Over the course of his research into these two companies, he concluded that, as work has become more complex, the need for strong middle managers is as great as ever. "They are responsible for making many of the judgment calls and trade-offs that shape the firm's success. They are also the key communications channel from senior management down through the ranks."
The author argues that corporate boards need to "move in the direction of fairness" by better aligning CEO pay with that of the manager ranks. He also calls on companies to provide more of the educational support that would give managers broader, more portable skills. He endorses the concept of portable health care, too. Unlikely? Probably. After all, in a time of fierce downsizing, it's easier to keep going after the whipping boys.