News that a restructuring at Citi would result in the elimination of multiple management layers added to the trend of companies moving away from deeply vertical structures. Like Citi, earlier this year, Meta, X and other organizations shrank headcounts across their middle management, in part to reduce costs in part due to new awareness that close manager supervision may not be as pivotal as once believed.
Whether these shifts are temporary, or a harbinger of a different organizational model is unclear. Regardless, companies interested not only in cutting jobs but transforming obsolete hierarchies should focus on three design challenges: 1. How to recast the manager role; 2. Where to position senior leadership in a flatter structure; 3. How to shape ownership at work.
Recasting The Manager Role
During the pandemic, with the shift to remote work, both managers and organizations suddenly realized that employees could achieve high productivity levels without direct monitoring. While this new evidence exhausted the need for bosses, it underscored the importance of more advanced management skills.
Indeed, even before COVID-19, managers had shown weaknesses in team building, delegation and feedback. But once they were forced to exercise their roles remotely gaps in trust, adaptability, problem-solving, empathy and employee empowerment became even more evident.
Still, as harsh as it felt, the remote work experiment was only a taste of the unrelenting complexity workplaces will face in the coming years. Supervisors may be obsolete, but the need for interpreters, catalysts, ambassadors, role modelers and culture innovators will grow only more robust in the future.
Meeting these emerging organizational demands will require creating manager roles with different skillsets more appropriate for today’s work culture. For example, these new managers will be called to turn emotions into commitment and focus. They will have to envision and scale purpose. They will be forced to simplify complexity. They will need to be compelling storytellers. They will have to generate insights that can help the organization make progress on its journey of both internal and external growth. And much more.
While ambitious, shifting to this new management model can only be beneficial for organizations. In flatter and remote structures for example, team leads who excel at managing emotions, handling pressure and interpreting complexity are significantly more effective than those lacking such skillsets.
Notably, reconfiguring the manager role along these new coordinates will entail a change in both mindset and practice, especially in four areas.
First, instead of advancing successful individual contributors to manager positions, a common practice in many organizations today, choosing managers with these more advanced skillsets should be the driving criterion for filling managerial jobs.
Second, rather than compounding managers with individual contributors’ responsibilities – as some organizations currently do based on the assumption that people no longer need supervision – organizations should give those in manager positions space and learning opportunities to practice more sophisticated role demands. Lacking the chance to learn and practice proactively, like during the pandemic, is precisely what may cause managers to experience a sense of inadequacy when crises arise.
Third, the processes that managers are traditionally responsible for – from performance evaluation to talent management and others – should evolve with the role. For instance, managers should not be asked to act like coaches and expected to evaluate employees’ performance on a static curve or across artificially defined performance categories.
Fourth, managers should be held accountable for far more than their traditional responsibilities. In particular, they should account for their ability to share information, enable collaboration, foster well-being and interpret data.
Positioning Senior Leadership In A Flatter Structure
Among senior leaders, a common rationale for cutting manager jobs has been the need for greater organizational agility. Just a few weeks ago, for example, when LinkedIn’s CEO, Ryan Roslansky, announced a new round of layoffs, he referred to the need “to improve agility and accountability, establishing unambiguous ownership, and driving improving efficiency & transparency through reduced layering.”
In an environment that shows hyper-turbulence and incessant change, less verticality makes strategic sense. Organizations need faster feedback loops, more organic collaborative processes, greater resilience and more. Yet, cutting management ranks without repositioning the role of senior leadership while also creating a genuine sense of distributed ownership may backfire.
Take Citi for example, where after the restructuring, teams will have a more direct line into the executive team. Though highly desirable, the success of this new organizational vision depends on both cutting manager layers and whether the old hierarchical mindset is left behind. Without deep local ownership, streamlining processes by eliminating middle roles and redundancies may create an overly centralized structure where the neuralgic center, the executive team, is constantly pulled in as the kingmaker. Unlike an adaptable organization, such a new setup would have fewer but more powerful bosses, leading to increased politics, lower trust and less time for strategic visioning.
Instead, if the removal of middle management is complemented with a new acculturation process in which senior leaders role model and cascade ownership, the organization wouldn’t simply shed roles but gain agility. To succeed, such a transformation would require that senior leaders: 1. Are clear on what ownership means and boils down to in the organization; 2. Are willing to create two-way accountabilities; 3. And are genuinely onboard with distributed decision-making.
By implementing agile strategic leadership, senior leaders would no longer be at the top but organically and dynamically embedded in the organization’s operations precisely where they are most needed. This approach would give management a multi-focal view of the business but avoid they exercise too close control.
Shaping Ownership In The Workplace
If companies are cutting manager roles and expecting people to demonstrate ownership, for what should employees be responsible? Notably, evidence about the effects of ownership on individual contributors shows both upsides (e.g., feedback, autonomy, etc.) and adverse effects (e.g., conflicting demands, time pressure, etc.). While various considerations deserve attention at this level, three principles should govern the design of individual ownership.
First, employees should not be expected to exercise ownership over what they cannot influence. This requirement raises the question of how to effectively integrate employee input into decision-making processes – especially if there are known decision-making bottlenecks or turfs in the organization.
Second, aside from decision-making, demonstrating individual ownership presupposes a culture fit for this objective. For example, to act like owners, employees should proactively identify problems, provide input, innovate on the status quo and more. But if the workplace culture is affected by employee silence, low psychological safety, exclusion and other blind spots, not only will it be far-fetched to expect that employees demonstrate ownership, but it will easily foster feelings of unfairness and disengagement.
Finally, while companies are often tempted to embrace individual ownership to drive results, they should carefully ponder the realm in which to expect that level of accountability. In many cases, it’s more fitting not to focus on the bottom line but on the processes that drive it. It is within that domain that employees can effectively own what they do, and their role can be legitimately and clearly held accountable.
While internal growth is never a linear path, it must be coherent. Faced with pressure and change, organizations have a chance to move forward not only by lowering costs but also by evolving their identity and structure. It is through these more profound changes that they can ready themselves for a new era.
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