McKinsey Quarterly

Middle managers are the heart of your company

| Article

Do you believe any or all of the following statements? Does your boss, or your boss’s boss?

  • The only way someone at a company can truly advance is to be promoted out of their current role.
  • The importance of someone’s job can be measured by how many people are underneath their box on the org chart.
  • The more senior the role, the more the person in it should be paid and rewarded.
  • Outstanding individual contributors should be rewarded with management roles.
  • Anyone who stays in a middle-management role for a long time must not be very good.

Even if you try to consciously reject these ideas, they can be hard to push away. That’s because they are woven into the very fabric of the corporate world. They are stubborn relics of an era when workplaces essentially stayed the same for years at a time and when a hierarchical management model helped ensure productivity.

But the way we work is changing so rapidly that these outmoded assumptions are now doing serious damage. They are forcing people into roles that they aren’t good at and don’t enjoy. Cumulatively, they create an effect that can send an organization into a downward spiral.

In particular, the middle layer of management is suffering from these false beliefs—and for three main reasons:

  • Senior leadership feels a magnetic pull to promote top middle managers into positions where they no longer do what they love: coach and connect people.
  • Senior leaders persist in promoting their best individual contributors, without considering their fitness for a people leadership role.
  • Middle managers who do stay in their jobs find themselves pinioned by administrative tasks and stymied by leaders who won’t empower them to make changes.

Unfortunately, the word “middle” implies that the person in that spot is on the way to somewhere else—ideally, the top. That thinking is misguided. Instead, we need to view middle managers as being at the center of the action. Without their ability to connect and integrate people and tasks, an organization can cease to function effectively. That’s why we think the best middle managers are best off staying exactly where they are—like Marcus, who refused to accept the prevailing belief systems about management.

Without the ability of middle managers to connect and integrate people and tasks, an organization can cease to function effectively.

Saying no to a promotion

Marcus had big aspirations for changing society. Just after graduating from college, he was excited to see a posting for a federal-affairs coordinator at a trade group in Washington, DC. It was looking for a “dynamic team player and a self-starter who can juggle multiple projects” while pursuing “policy and advocacy efforts on a diverse set of issues.” To his delight, he got the job.

When he arrived, he was the lowest-ranking person on his team. As such, he didn’t do much talking in meetings. But he was able to observe whom his bosses met with, from lawmakers to lobbyists to corporate-policy directors. He always noticed one group from a consumer goods company. They were animated and passionate, and it was obvious that they respected one another. Most of all, everyone on the team seemed to be having a good time.

Eventually, Marcus left for what he thought was his dream job: working as a staff member for a US House of Representatives committee. A few years in, though, while doing research on a consumer rights bill, he noticed that the consumer goods company he had admired in his previous job was looking to fill a government affairs position. As a defender of “the little guy,” Marcus had never pictured himself working for a big corporation. But on a whim, he applied, and to his surprise, he got the job.

Marcus was a little afraid that the job would require him to sacrifice some of his values, but this proved not to be the case. In fact, he came to realize that he could make more changes from his corporate perch than in his past job.

In his new role, Marcus kept one foot in government while interacting with key players across the company. In the process, his bosses discovered that he had an uncanny ability to bring people from far-flung groups together to achieve common goals. His ability to listen and work toward solutions improved how his company was perceived both inside and out.

The company enlisted Marcus’s help when its plan to build a new regional office in North Carolina faced opposition from community leaders who feared it would threaten the city’s small-town atmosphere. Marcus listened to their concerns and went back to his superiors and his team. The company agreed to build the office farther away from the center of town than originally planned. Also, by drawing on the experience of another regional center, Marcus devised a pilot program that would target people without college degrees who were struggling to find work in the region. Marcus’s interventions helped get the company’s plan unanimously approved by the city council.

When Marcus finished work for the day, he almost always felt that he had added specific and substantive value. Soon he was promoted to manage his own group, and he excelled as a people leader. He demonstrated real concern for the development of his team members, and he thought carefully about how to position them for success. Alice, Marcus’s boss, was thrilled to see him performing so well and didn’t mind giving him credit. She sang his praises to her own bosses so that they were well aware of this star in their midst.

Then Alice accepted a job as a top officer at a think tank. As she prepared to leave, Alice’s bosses let Marcus know that her vice president (VP) position was his for the asking. At first, Marcus was thrilled at the opportunity. In addition to the cachet of being a VP, he would receive a hefty salary increase, plus a large block of stock options. Yet despite his initial excitement, Marcus found himself dreading the prospect of his promotion.

Alice’s VP job was important, but it didn’t play to Marcus’s strengths. Alice was good at planning and strategizing. She knew how to maneuver among senior leaders to get things done. When Marcus came up with a great new idea inspired by his interactions with various constituents, she was the one who could pull the right levers with senior leaders to make it happen. But she worked with a much smaller and less varied pool of people than Marcus did.

When Marcus considered what Alice actually did all day, the knot of anxiety in his stomach tightened. He knew that the people he wanted to interact with were the doers—his team members, the researchers, the frontline community leaders—and not just top executives. He had seen how Alice’s time was squeezed by endless senior-level briefings.

After some soul-searching, Marcus did something that required a fair amount of fortitude: realizing that his daily job satisfaction was more important to him than a higher paycheck, he declined to apply for Alice’s job. The company hired an external candidate as VP.

Marcus’s bosses accepted his decision with regret, but as they saw him expand his reach and influence and take on increasingly complex projects, they realized that he had made the right choice. They understood that moving him to a VP position would have been a mistake, both for him and the company.

Marcus’s actions led his company to take a hard look at its overall promotion and compensation practices. He ended up getting a promotion without having to move up the corporate ladder. He negotiated key elements of his new role: he would have ample time to lead his team of people, and his VP would help him manage many of the time-consuming interactions with people more senior than him.

We’ve seen star managers like Marcus throughout our careers. They naturally attract the attention of senior leaders who want to reward and retain stellar performers, yet the reward normally comes in the form of a new job where these managers can no longer use the very skills that got them noticed in the first place. It’s a huge waste of talent to see a manager who once looked forward to coming into work now sitting in a big, new office drowning in administrative work that makes them miserable.

Meanwhile, senior leaders tend to retain middle managers who are good at being bureaucrats, administrators, and political players. They aren’t quite bad enough to be let go, but they also aren’t good enough to promote. They become a part of the organizational “permafrost” that resists change and stays stubbornly in place.

We find it maddening that so many corporations tend to keep poorly performing managers in place while promoting successful individual contributors and managers into jobs that they find dull, distasteful, and dissatisfying. It seems so obvious: if a person is passionate about their job, then let them stay where they are.

Saying yes to a promotion—and regretting it

Unlike Marcus, another excellent manager was unable to resist the pull of a promotion, even though her instincts told her to stay where she was. Her story is all too common.

Kelsey was a standout manager of a big-city kindergarten through eighth grade education center, where tutors helped children with math, reading, and computer skills. She hired and trained the full- and part-time staff, interacted with parents and children, and even pulled people off the sidewalk and gave them sales pitches. She estimates that she put in about 20,000 steps a day because she was constantly in motion.

Because of the facility’s unique location, it served students from some of the best and worst schools in the city, and yet it all just worked. The center was open seven days a week, and once Kelsey worked 23 straight days. She thrived on the intensity. She still remembers one particularly busy day when she was rushing around with sweat stains under her arms and a couple of pencils in her messy hair. The air was filled with the excited din of children’s voices as they worked with tutors. One of the fathers, who had initially been skeptical about sending his son to the program, turned to her and said, “You guys do something pretty magical here, don’t you?” To this day, it chokes her up just thinking about it.

Then the company was bought by a larger firm. That’s when the trouble began. Seeing that Kelsey was a star at an individual center, a newly installed executive urged her to apply for a job as a regional manager. She got the full-court press, fancy dinner included. So how could she say no? After all, instead of being in charge of one center, she would be overseeing eight centers. That was so much more impressive, right?

An inner voice kept saying, “Don’t do it.” But when she expressed doubts to her friends, they said, “You’d be a fool to turn it down. You’re getting a raise, and it will look great on your résumé.”

So she took the job—and was miserable.

A big part of her new job was checking in with the managers of the other centers, making sure they were doing their jobs properly. She also needed to ensure that they were meeting their financial targets each month, which turned out to be impossible because the centers were coming off an unrepeatable boom year.

The executive who promoted her had tried to seal the deal by promising that Kelsey could work from home most of the time. There was just one problem: Kelsey didn’t like working from home. She missed the conferences, the coaching, and the constant buzz that used to surround her each day.

One day, while Kelsey was sitting alone in her apartment checking out the latest profits and losses, her boss called to ask her about the maintenance plan at one of the suburban centers. That’s when she knew she couldn’t take it much longer. Not much later, she quit her job and applied for a teaching-fellowship program at a public-school system. Now she teaches junior-high English.

The sad thing, Kelsey says, is that she would have been a lifer at the for-profit education company if only top leaders had known how to nurture and reward her as a middle manager.

The Waffle House way

Much of the corporate world is still in the dark about how to promote stars within the same role.

With much of the corporate world still in the dark about how to promote stars within the same role, we direct attention to the promotion practices of an iconic restaurant that gets it right.

If you’ve driven highways in the US South, you most likely have stopped at a Waffle House. The beloved restaurant chain has more than 2,000 locations, primarily in states such as Florida, North Carolina, Alabama, and Georgia—where the first Waffle House opened in 1955. The chain prides itself on its doors never closing, which makes it a favorite of long-haul truckers and just about anyone with a 2:00 a.m. hankering for its famous waffles or hash browns served “covered,” meaning topped with a slice of cheese, or “chunked,” with cubes of ham added.

New grill operators at Waffle House start with the title of, well, grill operator. In addition to learning how to make each dish to the chain’s exacting standards, they have to master Waffle House’s shorthand for servers to signal to grill operators what to make for each plate. If a plate comes to the kitchen with a mustard packet turned up, the grill operator knows the customer wants Papa Joe’s Pork Chop and Eggs; mustard packet side down means Country Ham and Eggs. If a plate comes in with a pat of butter, it’s for the T-Bone and Eggs, but the location of the butter matters: top of the plate means well done; bottom means rare.

With experience and training, these employees have an opportunity to rise to the level of master grill operator. Master operators, after passing tests that demonstrate their knowledge of customer service, food safety, and cooking, not to mention Waffle House’s lore and practices, then receive a higher salary and more responsibilities.

After demonstrating further mastery of techniques and safety certifications, as well as generating a consistent average of $6,000 in revenue per shift (at an average price of less than $10 per order, mind you), these grill operators receive another generous salary boost and get to be known as “Elvis of the grill.” While some of those who achieve this level take on additional responsibilities to train newbies, the goal is to keep them doing what they do best—because without quality grill operators, the restaurants couldn’t maintain their trademark dishes or 24/7 schedule.

If Waffle House can get this concept right, why can’t the rest of the corporate world?

The trades, at least, have long understood the value of promoting people within the same job. Someone who trains to be an electrician is an electrician for life, beginning as an apprentice, rising to become a journeyman, and closing their career as a master electrician, with corresponding jumps in pay and responsibilities. Smart companies have been applying this same concept to technical positions by creating technical-career tracks for top performers rather than promoting them to team lead roles that would take them away from their excellent contributions.

We know of one tech executive who spent years thinking that the only way he could reward his best software engineers was to move them into people management roles. When he finally realized that this assumption was misguided, he thought it would be enough to set up separate promotional tracks for the engineers. But to his surprise, this wasn’t the “build it, and they will come” scenario that he had envisioned. That’s because leaders hadn’t made the changes management required to keep these pathways fully operational and attractive to employees. His star employees, too, needed to unlearn the idea that staying in individual-contributor roles was unacceptable. The company needed to build a new employee value proposition for its rock stars in tech who derived their energy from technical work rather than managing others’ work.

The tech executive deeply regrets not learning this sooner because he knows he lost some of his best talent by pushing them into management positions that were not right for them.

We believe that organizations will reap huge benefits if this concept spreads to middle management. We’ve seen it over and over in our work: the people who excel at middle- management jobs are true superstars. When one department or team clearly stands out from the rest, more often than not, it’s because of a superstar manager. Once these superstars are identified, senior leaders need to do everything in their power to keep them in their jobs. Levers at their disposal can include the following:

  • Salary and bonuses. This seems obvious, but it’s really not. It’s ingrained in corporate culture to pay officers, VPs, and other senior leaders more than middle managers. But why? When appropriate, pay the best middle managers even more than your senior leaders to show how much you value them. If you hear complaints from the executives, make up the difference in equity. Compensation should be commensurate with the value a role creates.
  • Stock and stock options. Speaking of equity, we’ve been surprised to hear how little equity most middle managers receive. Often, it’s zero or a pittance. Let your hardworking managers share in the equity pot, or you might just see them leave for a start-up that showers them with options. Yes, those start-up options need to vest, and they might end up being worthless, but they send an important message: if you help our company succeed, you will be mightily rewarded for it.
  • A bigger sphere. Expand the scope or scale of what someone manages without changing the essentials of the job. School districts sometimes do this with their principals, who are—when you think about it—the quintessential middle managers. Rather than promoting them into superintendent roles, which removes them from the teacher–student action, enlightened school districts will place them in much bigger schools instead. In the retail sector, a company might move an excellent manager from a smaller store to a superstore or give them hiring, training, and coaching duties at several additional stores.
  • Title changes. In the case of a store manager, a person’s title might change from junior manager to senior manager to executive manager as their sphere of influence grows. But these title changes can’t be no-cost empty words. A new title can come with measurable rewards and increased responsibility while still keeping the job’s focus at the center of the action.
  • Challenging assignments. Every great manager we’ve met always has ideas about how to make things better. Ask your best ones what they would do if they were in charge. Then, if they’re willing, put them in charge of their great idea.
  • Flexible working arrangements. Just as middle managers can make every effort to accommodate the needs and preferences of their reports, so can managers receive that same consideration from their bosses.

How can you make sure you are offering the right rewards to your most-valued managers? Here’s a thought: ask them! Some may appreciate a bump in salary; others may value more time off. Still others may want a coveted assignment or a travel opportunity. Tailor your rewards to the priorities of your managers.

The way we see it, superstars in management are like the head coach of a football team. After a team wins the Super Bowl, team owners reward and celebrate the coach with accolades, bonuses, and a fat contract renewal. What they don’t do is show appreciation by saying, “Congratulations, I’m moving you to the front office.” But that’s exactly what many companies do.

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