Why boards can't ignore middle management when it comes to change

Driving performance right through the organisation starts with working harder to connect those at the frontline with those at the top.

There are few discussions that waste more time than the “permafrost” conversation; these sweeping disparagements you hear from senior leaders that the challenge they have with culture change is getting change through the “frozen” middle management ranks.

It is about middle management jammed between the too often self-congratulatory (and somewhat delusional) “we’ve got it so right at the top” from the CEO and the too often condescending “our frontline people are our greatest asset”. It is the broad-brush hand pointed downwards. But before we look at what we might do, let’s rethink who it is we’re talking about.

What is “middle management”? Middle management only exists in scale businesses. In my experience, it is comprised of two groups.

Firstly, it is the up-and-coming generation of operational leaders. Some years past their graduate program, they’ve kept moving up based on hard work, performance and some assessment of leadership capability.

Secondly, they are hard-working team players who have sustained commitment, achievement and leadership over many years. Their career trajectory may not have been as steep as the executive above them, but they are the walking library for that very executive. They know the history, the people, they hold the relationships with your customers, they know culture, where things are buried and how to keep the machine working day in, day out. Both of these groups are critical — even before we talk about what they’re actually tasked to do.

Middle management are responsible for five core tasks:

1. Goals: They are accountable for an actual budget. Not an aggregated budget, not trends, but a whites-of-the-eyes, genuinely accountable budget. They have one for revenue and one for costs. They must meet both.
2. Strategy execution: They interpret and execute strategy. They decipher a bold idea down to actionable steps and then take them. They “sell” it to their teams, who will ultimately be charged with delivery.
3. Communication: They own communication to the frontline. Not a once-a-year inspiring speech or a monthly newsletter or podcast, but everyday communication. Answering questions, listening and resolving conflicts between two agendas, motivating people through tough times, applauding what is great and calling out what is less than great.
4. Sharing up to board: They write the first draft of every document the senior team or board sees. They decide the initial angle and the tone. They decide what stories to tell — and what not to.
5. Performance balanced with people: They balance performance with people. Every day. They know and hold the rules and standards, but also know how much flex is in every one of them — when to show empathy and when to hold the line.

Those five things are, in reality, the backbone of the culture of any organisation. They determine “how it feels to work here” and “the way we do things around here”. Looking at these critical roles and the work they do, it’s easy to see how important they are. So where do the “permafrost” comments come from? Having worked with many boards and executives, I think they probably come from frustration and a lack of connection; from a lack of appreciation of what it takes to do these roles well in a big machine. Frankly, it’s an easy out when things aren’t going so well.

When I looked for views on the permafrost layer, time and again I came across people who as senior leaders, strategic commentators or board members had never been in middle management. They were from small businesses, professional services or “parachute careers” that skipped this whole level. They’d never walked in these shoes. Middle management to this group was “them” not “us”.

Let me tell you what it’s like in these roles. It’s really tough and, at the same time, really rewarding, all day, most days. You work hard, constantly battling to nail those five goals, taking people with you and trying to get far enough in front of the expectations to make changes and give feedback to make it better for everyone. You do it for the love of it, for a great company and its leaders, for the great team you’ve built around you. You do it for your aligned purpose, gratitude for the opportunity and career, and the challenge of the complexity.

That said, how does it feel to be called “permafrost”? It kills you, isolates you, makes you feel like “them” and not “us”. It makes you hang onto the tribe around you rather than those above. It can mean you won’t keep trying as hard.

How should a board member think about this group?

I suggest with deep empathy and appreciation. We used to call it “humility”, but there’s an internet neologism that explains it better — sonder (“the realisation each person is living a life as vivid and complex as your own”).

That’s the test for every executive leader and board member — can you walk with humility and empathy in the shoes of every person in this organisation, including middle management? Can you imagine what the lived experience really is, what the conflicts are and what to prioritise when everything is important?

Anyone can describe how it should/could be or what was intended. It takes a serious leader to appreciate the difficulties, the reality of a complicated, tough business under productivity and cost pressures, and what people really need as support. In short, to appreciate that “permafrost” layer in the middle has some of the hardest and most important work to do every day.

How does a board or a senior leader lead culture? Straight through the middle.

And the questions they should ask, and the measurements to look for? Organisational culture can intuitively be “felt”, but in reality it’s a complex system that’s difficult to diagnose. There are five basics to look for:

• Baseline exit data — all exits, resignations, redundancies (redundancies in an unchanging business are often a sign of poor leaders or culture)
• Baseline entry data — all recruitment, where they come from (are all new staff coming from referrals or do we cast broadly beyond “people like us”?)
• Engagement, or Net Promoter Scores (NPS) and any movement or patterns in these
• Third-party hotline data on bullying and harassment and, qualitatively, what happened to the last few people who spoke up
• Development and talent movement (how are people moving up and around the organisation? Are most people developing or just a few anointed heirs?).

Across these five baselines, you then need to look for movement or patterns over time in each measure and put a diversity lens (as many as possible) across each one. Finally, you’re looking for correlations between these data points and also to a particular leader or leaders.

As the old wisdom goes: “when you find a problem, look above”. This is never more true than issues in middle management, and the numbers will always tell the story. For example, high engagement, high redundancy and a low level of speaking up is a combination built by a culture of fear, whereas mid-to-high engagement, high performance, low resignation and whistleblowers still employed after speaking up, are indications of an open culture that doesn’t shy away from challenge. These baseline correlations are a good place for a board to start in its quest to understand the culture in the middle.