Advisor I Mentor

Sparring partner

Piotr

Kania

Cafeteria of a large international manufacturing company, training break.

(Manager) – Last year we went through a reorganization, now we have fewer levels in the structure.

(Piotr) – What exactly changed?

(M) – We eliminated the team leader level, so now all employees report directly to managers.

(P) – What was the goal of this change?

(M) – Mainly to improve communication. Previously, employees complained that they didn’t know what was going on in the company because information got lost along the way. Now we have better insight into what people are doing, and we’re more often on the shop floor.

(P) – How big is your team now?

(M) – Over 30 people, mainly in production.

(P) – Do you have time to talk to them?

(M) – Basically only during Monday briefings, I divide them into two groups, and we discuss the most important matters. Other than that, it’s mostly only in emergency situations – like if something happens with the machines. On a daily basis, reports and administration take up most of my time…

This is an example of one of many conversations in this tone that I’ve had recently with managers. Companies are deciding to simplify their organizational structure, hoping for better communication and greater efficiency. But do they really achieve the intended effect? Does a simpler structure really help managers and employees, or does it introduce new challenges?

Modern Organizations in the Age of Change – Between Technology and People Management

Organizational structures are constantly evolving. Companies are looking for ways to increase flexibility, speed up decision-making processes, reduce bureaucracy, adapt better to dynamic market conditions, and meet the rapidly changing expectations of employees. The direction is clear – flattening the organizational structure, i.e., reducing the number of management levels in favor of more direct relationships between management and employees.

At the same time, alongside the evolution of organizational structures, other key changes are taking place in companies: digitalization and automation. These processes have a huge impact on the functioning of organizations at all levels. Modern ERP systems, project management platforms, and artificial intelligence are eliminating many traditional administrative and operational tasks, allowing more and more processes to run without human involvement.

In the face of these changes, the question arises: what role should managers play in this new reality?

Technology Instead of Leadership? The Role of People in Digital Organizations

Modern companies are increasingly implementing organizational models where decision-making is not assigned to a specific individual but is distributed among team members. Agile systems, teal structures, and holacratic organizations assume that traditional hierarchies can be replaced by self-organizing teams, where every employee has a real influence on the direction of actions.

Additionally, management-supporting technologies—such as Workday, Salesforce, Jira, and AI-driven analytics—allow companies to monitor performance, assign tasks, and optimize processes almost automatically. Many leaders are starting to wonder: since systems can track work progress, generate reports, and point out areas for improvement, do we still need middle managers?

Theoretically, the answer could be "no"—organizations can operate efficiently even without extensive management structures. Therefore, reducing one or several levels in the organization seems plausible. However, in practice, advanced technology and agile organizational structures will only work effectively when employees themselves are engaged and understand their roles. Technology can support processes, but it is up to the people to use it effectively. In the pursuit of efficiency, companies must not forget that an organization's success depends on people, not just algorithms and tools. This is where the irreplaceable role of a team leader, coordinator, or middle manager can be crucial.

In the pursuit of efficiency, companies must not forget that an organization's success depends on people, not just algorithms and tools.

Flattening Structures—Seeking Efficiency or the Illusion of Savings?

So, what drives the increasing push towards reducing management levels?

Firstly, the solution seems too tempting—eliminating intermediaries is supposed to accelerate decision-making, increase team autonomy, and reduce bureaucracy. Companies believe that a simpler structure means greater flexibility and the ability to respond faster to changes.

Another reason organizations opt for flattening structures is often simple financial calculation. Fewer managers mean reduced costs related to salaries and administration. Under budget optimization pressure, companies begin to treat middle management as an "unnecessary link" that can be replaced by technology, self-organizing teams, or simply passed on to employees "one level up."

The generational factor is also important. Many companies face the challenge of attracting and retaining younger employees who expect more autonomy and do not want to be "managed" in the traditional way. Therefore, organizations are trying to create work environments where flexible, partnership-based forms of collaboration dominate instead of traditional boss-subordinate relationships. In this model, managers are expected to act more as coaches or facilitators rather than traditional leaders responsible for supervision and enforcing results.

On paper, everything looks good—smaller hierarchy, greater freedom, more dynamic organization. However, reality shows that too aggressively reducing middle management can lead to problems that may weaken the organization in the long run.

Reality shows that too aggressively reducing middle management can lead to problems that may weaken the organization in the long run.

Surprising Consequences

Reducing management levels means that a manager becomes the direct supervisor of many more employees, as the intermediate level—such as team leaders, supervisors, or managers of smaller teams—has been eliminated.

In practice, this means that the manager's scope of responsibility significantly expands. Not only do they manage more people, but they also take on many daily tasks that were previously distributed among several levels of the structure.

What are the consequences of such a change in role, workload, and scope of responsibility for the manager? The effects of such changes do not always align with the original assumptions, and their consequences can be surprising.

1. Employees Lose a Sense of Belonging and Motivation

A change in the organizational structure that leads to an expanded team also changes the dynamics of the relationship between the manager and employees. When a manager does not have enough time to engage in the development of their people or provide them with regular support, employees may feel undervalued and isolated. Lack of individual attention results in lower engagement with the organization and reduced motivation to act. As a result, turnover rises, as those who do not feel appreciated start looking for new opportunities in other companies that will provide them with better care and support.

2. Communication Deteriorates

In a situation where the team becomes larger, the manager is unable to dedicate enough time for direct communication with each team member. While it might seem that an organizational change that removes intermediate levels should improve information flow, in reality, only one side of the communication changes—from the manager to the employees. A larger team means less time for individual conversations, leading to misunderstandings, errors in task execution, and lack of comprehensive feedback. Despite faster one-way communication, overall communication becomes less effective, and management becomes more complicated.

3. Turnover Increases

The increase in the number of employees assigned to a manager also leads to a lack of individualized attention to team members. A manager, burdened with responsibilities related to a larger number of employees, does not have enough time to engage in their development or discuss problems. As a result, employees begin to feel undervalued, which leads to higher turnover. They seek a place where they feel more noticed and supported by their superiors. Additionally, fewer levels in the organization mean fewer opportunities for advancement, which, especially for younger employees, is an important motivator for engagement and further career development. Lack of promotion prospects can lead to frustration and the decision to seek new challenges at other companies. This turnover not only increases recruitment costs but also weakens team stability, which can have long-term negative consequences for the company.

So, what now? What is the solution?

In the face of increasing demands for efficiency, many CEOs, directors, and managers face the challenging task of balancing the needs for optimizing organizational and technological structures with maintaining the strong role of the manager as a leader and mentor. Although this may seem difficult to reconcile, the process of change does not have to come at the cost of the manager's role, and the right decisions can support the development of engaged, motivated, and evolving teams.

1. Using Technology to Streamline Processes

To achieve optimization, it is worth investing in technologies that allow the automation of as many administrative and repetitive tasks as possible. Introducing digitalization or robotic systems can significantly reduce the burden on managers, freeing them from having to deal with mundane tasks. This will allow managers to focus more on what is crucial—team development, relationship-building, providing feedback, and executing the organization's vision.

2. Structural Change Should Not Lead to Job Cuts, But to a Smart Division of Responsibilities

Introducing technology allows time savings, but this should not lead to a simple conclusion about the need for job reductions. It is important that structural changes are well-thought-out and take into account the actual impact on the manager's role. The focus should be on delegating non-core activities to technology or other individuals within the organization, which will enable middle managers, coordinators, team leaders, and foremen to perform their roles effectively without being burdened by unnecessary administrative tasks.

3. Maintaining the Number of Subordinates at an Appropriate Level

Returning to the model of 7-10 direct subordinates is important in the context of effective management. This setup allows managers to devote enough time to individual work with employees—development discussions, providing feedback, and relationship-building. Maintaining this number is key to team development, employee engagement, and implementing lasting changes. Changes in structure should support the manager in fulfilling their mission, not complicate it, which means that too large a number of direct subordinates can lead to overload and, consequently, a decrease in management quality.

4. The Role of the Manager as a Leader and Coach

Middle managers must still act as leaders, mentors, and supporters of employee development. The key task remains building engagement, motivation, and supporting the process of change within the organization. For the manager to perform this role, they must have time for proper interaction with employees, providing feedback, conveying the company’s vision, and listening to their opinions. Therefore, it is essential to ensure that organizations maintain the right balance between optimizing structures and taking care of the manager's time, as they have a direct impact on team development.

Before making a decision about eliminating a management level or reducing the number of managers, it is worth asking whether this step will truly benefit the organization in the long run...

Summary

In conclusion, optimizing structures, reducing bureaucracy, and simplifying the organization can bring real benefits, as long as they do not weaken the role of the manager as a leader. Key to success is the appropriate use of technology, thoughtful division of responsibilities, and maintaining the number of subordinates at a level that enables effective management. Structural changes should support the effectiveness and development of teams, not limit the ability to build employee engagement and motivation.

Before deciding to eliminate a management level or reduce the number of managers, it is important to ask: will this step truly benefit the organization in the long run? Will it negatively impact the achievement of the company's mission, strategic goals, and employee satisfaction? Perhaps it is crucial to first thoroughly understand the true role of the manager and the consequences of their absence.

Do not underestimate the challenges facing leaders in your organization. At ProfBoost, we support the development of managerial competencies, which are key to success in the changing business environment. Invest in the future of your organization by investing in the development of your managers!