Broken windows in middle management

Broken windows in an organisation are not the exclusive territory of front line staff and line managers. Middle managers have their own role to play in creating broken windows.

Listening to news reports about the latest round of downsizing, it’s highly likely that the majority of redundancies have come from middle management; phrases like “leaner/flatter organisation” or “trimming the fat” are mentioned often.

The fact is that middle management’s traditional role of gathering information from line managers and passing it up to senior management to inform decision-making has largely been usurped by information management systems.

So what role does middle management have to play in a modern organisation, and how can middle managers create broken windows that give customers cause to doubt the quality of the organisation’s product or service and defect to competitors?

Middle managers, by definition, are caught between two layers of management. The senior managers above them set the direction for the organisation and expect the middle managers to translate that strategy into tactics to be executed by the line managers and employees below them.

In addition, middle management is frequently regarded as “career limbo” – an ambitious but mediocre manager might spend the majority of his or her career in middle management, being shuffled sideways from job to job with little opportunity for advancement. Knowing this, many middle managers seeking to break into senior management are driven to prove themselves to senior management in an effort to get themselves noticed – a case of personal ambition overriding organisational ambitions. I have heard of at least one middle manager whose primary performance goal is “to be more visible to senior managers within the organisation”.

Middle managers in this kind of position will frequently be induced to deliver results no matter what the cost – especially in today’s extraordinarily competitive global environment. Consider the following scenario.

The senior management of an Australian subsidiary of a major US manufacturer of widgets is being pressured to deliver increased sales. The firm is operating in a highly competitive mature market where their market share is decreasing as their widgets are being progressively edged out by competitors – more modern and technologically up-to-date widgets manufactured at lower cost in South East Asia.

The directive from senior management is clear: we need to increase sales. Specifically, we need to reach our fourth quarter sales target of 15,000 units.

Middle management’s interpretation of senior management’s directive is equally clear: increase sales and reach the target of 15,000 units for the fourth quarter.

The middle managers who remain employed after a recent purge are working twelve-hour days to pick up the workload previously handled by their sacked colleagues. The organisation’s widgets are distributed through a network of fully franchised retail outlets who buy their stock from the manufacturer before selling it on at controlled margins.

An enterprising Sales Manager decides he has the solution. He brings forward the following month’s wholesales to franchises for an instant boost to sales numbers.

The consequences of this action are far-ranging:

  • The organisation has cannibalised next month’s sales to feed this quarter’s target. It will now be even more difficult to reach next quarter’s sales target.
  • Franchisors forced to accept next month’s shipments of widgets early will be overstocked and could easily become disgruntled at their treatment.
  • Franchisors who are now overstocked with widgets may defy standing franchise rules and sell widgets at a discount in order to move stock. Selling at a discount has a negative impact on brand equity and may affect future sales.
  • Unless the Sales Manager’s actions are criticised by senior management, it will quickly become clear to all staff that the ultimate goal of the organisation is reaching targets rather than properly executing an effective set of tactics in support of a coherent strategy. This fosters a short-term focus and discourages strategic thinking.
  • If left unchecked, this short term focus can quickly become detrimental to morale as employees are forced to look for a ‘quick fix’ instead of a genuine lasting solution and become frustrated. Those employees seeking a better working environment may leave.
  • In addition, a short-term focus on targets instead of a strategic focus on an organisational goal will drive departments to focus on their own goals instead of supporting each other in reaching an overarching organisational goal. This will encourage a silo mentality which will further hamper the organisation’s efforts to improve sales.

This is only one scenario, but it is one that is repeated over and over in companies around the world. Middle managers lose focus on organisational goals to focus on short-term gains in order to stave off perceived external pressure. These short-term focus activities lead to broken windows when poor decisions are made.

In the above scenario, the major impact is on franchisees and employees – both important internal customers – but the silo mentality of middle management also manifests itself with external customers. Poor decisions allocating resources to short term internal goals takes resources away from external and future focused activities. Training, performance management and process management all suffer. For external customers the result is inadequate service delivered by poorly trained staff who know that their performance will only be measured against the short term focus.

In our experience, though, middle managers are only driven to this kind of behaviour – where their own personal ambitions override organisational ambitions (and sometimes common sense) – when senior managers fail to lead, fail to clearly articulate organisational goals and strategy, and fail to consistently and persistently reward behaviours which contribute to achieving organisational goals whilst discouraging behaviours which do not. This failure leads to a confusing working environment with divergent goals and a systemic lack of cooperation between departments.

Senior management’s broken windows, however, are a topic for a whole other article.


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