The other day I was listening to deputy prime minister Nick Clegg and Labour leader Ed Miliband debating the ‘squeezed middle’ phenomenon. No, it’s not the latest new year diet, but refers to the increasing financial and work pressures, and decreasing real incomes, of those many ‘hard-working families’ on average earnings in ‘middle’ and ‘alarm-clock’ Britain. The phenomenon has been evident in America for the past 25 years and, if economists are to be believed, seems set to be the pattern in this country for the remainder of the decade, as prices outstrip wage inflation, the benefits bill grows and top incomes surge.
The politicians argue about which party is responsible for the squeeze and are debating some of the solutions, including bringing price inflation back down, reducing employees’ NICs and judicious increases in the income tax threshold. But are many of our organisations suffering from, and failing to address, the same phenomenon?
Middle managers and supervisors haven’t had a good image in the academic and popular press for many years: “blockers”, “bureaucrats” and so on. And as we re-enter recession, they are being hit hard by work intensification driven by a combination of factors: reorganisation, delayering and widening spans of control; reduced budgets and resources while being required to do “more for less”; pay freezes and reduced earning differentials with those working for them; a widening of their people management role as HR functions have abandoned the front-line and retreated to their “service” centres; and a lack of training investment as employers continue to overly-focus their development budgets on a small elite of “talent” and leaders.
It was while interviewing a first-line manager in an NHS ambulance trust who had been manfully trying to complete more than 100 appraisal interviews with his staff that I had my light-bulb moment, and realised you can have too much “flat” and “lean”, however strong the cost pressures.
And not only are these first-line managers becoming disengaged and demoralised (CIPD’s recent attitude survey and Aon Hewitt’s engagement database show an engagement recession precipitously affecting these levels) but their staff are showing similar declines in commitment and performance. As Chris Bones put it, for employees, “The line manager is the lens through which I see the company and the company sees me.”
The result in many organisations is strategic constipation, as grand business and HR strategic and performance improvement plans are simply not implemented and performance continues to slide. The ‘middle’ of the organisation is where your strategy really hits the road and your performance and HR intentions succeed or fail. As David Maister argues brilliantly in Strategy and the Fat Smoker, it’s no use exhorting people as to “what” they should do, you have to address the ‘how’ of their skill and will to do so.
I am working with a number of organisations who, far from overly-squeezing, are now investing in their ‘middles’ and the ability to deliver on their strategy in these tough times. Common initiatives include: improved development for those who often have no or very limited experience of management training, and more extensive talent and career pipelines running right the way up through the organisation; better HR and systems support, holding middle managers clearly accountable for their people management responsibilities but coaching and helping them to deliver on them (with regular HR “surgeries” for example); simplified HR and business processes which better recognise the reality for these managers of having to try to operate overly-complex and over-engineered appraisal and other HR systems; improved dialogue and involvement of line managers in the development of new strategies and policies; and restoring appropriate pay differentials and incentives for people to take on and deliver managerial responsibilities.
Barack Obama declared himself to be “a warrior for the middle class”, although ‘Iron Lady’ Margaret Thatcher believed that “standing in the middle of the road is very dangerous: you get knocked down by the traffic on both sides”. But unless we address this increasingly stretched middle in our country and organisations, then the road to economic recovery is going to be ever longer and harder to progress.
Asking employees to shoulder added burdens through more work is a management failure to prioritize and set direction.
Trimming the middle has a negative multiplicative effect. Companies think they are doing a good thing by firing marginal employees first. But since the workload doesn’t change, remaining employees must do more individually to maintain the same output. Paradoxically, the very people the company wanted to save in the first place leave as fast as they can.
Duncan is so right. In my experience the employees’ views of their organisations depend on how they relate to their line manager and peers. Staff engagement surveys regularly show that the key to high staff engagement is good line managers. If they are not engaged and competent their teams in turn will not be engaged.