Cutting Out the Heart of the House. Again.

Middle managers (MMs) are once again on the chopping block. They account for 30% of laid off workers and are now viewed as organizational bloat.

But is laying them off en masse a smart decision?

Of course, some organizations are legitimately thick in the middle and must make changes. Others are facing financial hardship and have to reduce payroll to survive. Yet there’s ample evidence that dumping MMs into the organizational bloat bucket is a short-sighted decision that ultimately backfires.

The truth is that effective MMs are central to success. They are the heart of the house—the ones who turn strategy into reality.

Proof of this starts with Blanchard’s Leadership-Profit Chain, a multi-year meta-analysis that includes a literature review of hundreds of academic studies. Here are key findings that show the importance of MMs:

1.    Effective MMs directly predict positive employee passion.

2.    Positive employee passion directly predicts customer devotion.

3.    Employee passion and happy customers directly predict organizational vitality.

“While executives are critical in many ways, they do not directly drive organizational success,” says Dr. Jay Campbell, Blanchard’s chief product officer. “They just don’t have the bandwidth—or, frankly, the skills. Operational managers are needed to translate and filter the strategy from above into action plans and goals the workforce can act upon. Remove that critical link at your peril.”

Google came to a similar conclusion. In 2002, the organization eliminated MMs in the belief that they were unnecessary bureaucracy that slowed down the organization. MMs were let go or reassigned, and chaos quickly followed. The results were so disastrous that the experiment lasted only a few months.

Researchers at Google learned that MMs were essential. The next challenge was to determine the qualities of a stellar MM—and Project Oxygen was born.

After years of research, Project Oxygen identified the ingredients of an ideal MM. They were a good coach. They didn’t micromanage. They cared about their people. They held regular one-on-one meetings with their reports. They helped people see how their work contributed to the mission. They gave frequent and useful feedback. And more.

Google then put these findings to the test. Employees rated their leaders based on the eight key attributes identified in Project Oxygen. Leaders struggling in a particular area had access to relevant courses that helped them upgrade their skills. Employee ratings of their leaders jumped.

Which brings us back to the news of the day: layoffs and organizational bloat.

The Leadership-Profit Chain and Project Oxygen are hard evidence that MMs are essential to an organization’s success. The smart course of action is to give them the necessary skills to lead their people—not view them as a drain and lay them off indiscriminately.

“It’s appropriate for executives to reconsider the organization’s structure when it’s necessary to become leaner. But we don’t recommend targeting middle managers as the first place to cut unless you’re sure you’re overstaffed there. If you do cut more deeply across this layer, you risk undermining your most important business units and initiatives,” says Dr. Campbell.

A better approach is to look to hard-won lessons from the past to make your organization ready for the future.