Flying Donkey

Saturday, November 03, 2007

Hole In The Middle

Today’s corporation can be compared to the old feudal system. At the very top sits the senior management, responsible for analyzing the landscape and defining the strategy of the firm. Below this level is the middle management whose main job is reporting to the senior management.

This analogy can be compared to the King and his cabinet of old, whose main task was to evaluate threats, form alliances and wage war. This role is not all that different from the feudal lords who held fiefdoms. Their primary task was to manage a territory in the name of the King. This is not unlike the modern middle managers who might manage a department.

The primary goal is the same – helping the King/CEO manage the larger entity by carving it out into simpler manageable segments. Unfortunately, the end result is also the same – power plays and jockeying for position to the detriment of the larger entity.

The solution to this structural issue within a corporation can be found in the political solution to fiefdoms. Just as fiefdoms were replaced by a cadre of mercenary civil servants who had no loyalty to a particular Lord, King or territory, so should the middle management be replaced by knowledge networks. The key to eliminating territorial tendencies is to eliminate territories.

The problem is not that the middle management is incompetent or not hardworking. Quite the contrary, over the last two decades there has been a steady increase in the hours per week put in by the management as well as in the qualifications they bring to the table. In addition, there is a plethora of management tools in the market, all geared to help the management process.

The trouble lies in a primeval human instinct that no amount of coaching or education can overcome – survival instinct. As managers rise within an organization, they create a personal eco-system around themselves. This consists of people, tools, and mind-set. This eco-system results from past experiences and comfort level of the manager. Advancing within an organization also results in an increasing desire to maintain the status quo.

This combination of experiential eco-system and desire to maintain the status quo results in the general malaise that plagues middle management. The general symptoms are sluggish decision-making and failure to adapt to the marketplace. The end result is poor corporate performance poor shareholder returns.

The key to solving this quandary is to realize that a leopard cannot change its spot. To fight the basic human tendency of self preservation and turf protection is a losing battle that no organization will win. It is much smarter to recognize this fact and work on a management model that bypasses it.

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