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As a consultant, I'm asked - sometimes directly and sometimes in a roundabout fashion - to help people change their business. In some instances, the desired changes are small and targeted. In others, they are significant and sweeping. In almost all instances, change is driven from the middle of the organization. I often hear folks comment in frustration that nothing gets done if it doesn't come from the top. In a way, they are right, but don't underestimate the important role of middle management, where most organization change really gets started.
Figure 1. An outline of how to change an organization from the middle on out.
Senior managers focus their efforts on directing the strategic path of the organization. As it relates to running the business, they take most of their cues from middle managers. According to Dr. Jonathon Byrnes, senior lecturer at MIT, middle management is critical to success. In fact, he says that developing and supporting middle management is the single-most important factor senior managers can influence to drive success at their firms. His words and views on the profitability of a firm resonate loudly, and are consistent with my own experience and empirical observations.
Most real change that drives profits occurs in what I call a "middle-out" pattern, a departure from the age-old argument about whether change occurs top-down or bottom-up. Middle managers are both close enough to the fire to see the problems and opportunities clearly and close enough to the money to connect the profit-burning fires to the organization's profit-and-loss statement. The way in which successful change occurs is very clear:
A middle manager conceives of an initiative that he or she believes will impact the organization's profitability.
He or she sells it to senior managers, who provide guidance/sponsorship and drive the initiative to other middle managers who, in turn, execute the initiative among the rank and file with coaching and mentoring support from the middle manager who first conceived of the change (Figure 1).
Senior managers are too distant from the fires to affect change. The folks in the rank and file are often too close to it to see the forest from the trees, or they lack access to senior management and can't push the initiative through. Good things happen (or don't happen) from the middle on out.
Sounds simple? I've outlined three areas where things commonly go wrong.
1) Failure to dollarize: A common mistake middle managers make in selling their proposed project to management is the failure to express the initiative in economic terms. I see many failed change proposals presented to management with protracted technical detail but a total lack of detail about the economic impact on the firm. Often, the proposals come from manufacturing middle managers - frequently engineers or other technically inclined people who, in many cases, lack basic training in finance or lack the experience they need to present an argument in economic terms.
Irrespective of background and training, once an individual reaches the senior ranks of management, his or her sole engineering unit is in dollars and cents. It is incumbent upon you, the middle manager, to couch your proposal in such terms. Abstract the technical details and emphasize the money. Dollarizing the project is how you sell senior managers on the concepts you wish to drive to and through the organization.
2) The horizontal push: Some middle managers never take their case to senior managers. Perhaps they are afraid to speak to senior managers. Perhaps the senior management team hasn't figured out Dr. Byrnes' message about how important middle managers are to the health and prosperity of the firm, and they insulate themselves in the offices.
In any case, many good initiatives fail because the middle manager driving change tries to push the initiative horizontally to his or her peers in other functional groups within the organization. This is a problem because there is no clout to break the "organizational homeostasis" that keeps people locked into their behavioral patterns, sometimes called "psychological inertia". These patterns are often perpetuated by reward structures that prompt individuals and groups to focus effort within their functional silo despite the fact that most initiatives require cross-functional change. This is complicated with senior management support and all but impossible without it. Asking a peer to alter his or her behavior in a way that adversely affects a performance review and a bonus is a slam-dunk no-go.
3) Forcing it bottom-up: A large percentage of middle managers are more comfortable selling their concept to the rank and file of the firm instead of to senior managers and/or their peers in middle management. They apply "trickle-up" logic in their attempts to make change occur, relying upon their relationships with the rank and file to sell the concept up to the change agents' peers in middle management.
This approach rarely works. In addition to muddling the message - creating confusion about the proposed change and/or its expected benefits, the approach can appear sneaky, further increasing conflict across functional lines within an organization. I've seen many occasions where a middle manager has snuck a pilot program into the rank and file, flying under the radar screen of the middle managers who are in charge of or highly affected by the area targeted for change. Most people respond poorly to being blindsided. Again, these things happen because the middle manager proposing the change lacks confidence in the project, isn't good at communicating with peers or superiors (thus choosing to bypass them), or simply doesn't understand what makes people tick.
The truth is that changing an organization is complicated, particularly when the change is cross-functional, which is typically the case. But, you can't wait around for senior managers to suddenly "get it" to affect change in your organization. Senior managers often make the big changes - selling a division, acquiring a division, adding a product line, entering a new market, etc. - and assume that they are responsible for all change. In reality, it is middle managers that create (or fail to create) operational excellence.
If you are a middle manager, making change happen is up to you. But you must understand how to maximize your chances for success. Remember to: 1) dollarize the initiative; 2) sell the initiative to senior management; 3) stand ready to help other middle managers understand why the change is good for the organization and for the functional areas they oversee; and 4) stand ready to support the entire organization by coaching and mentoring the rank and file of the organization.
Change occurs from the middle on out, which means it all starts with you.
References: Byrnes, J. (2005) "Middle Management Excellence," Working Knowledge for Business Leaders, Harvard Business School Archives.