We spent the last few years "flattening" organizations in the name of agility. The result? A $438 billion drop in global productivity. New data reveals that the secret to getting things done isn't removing layers—it’s empowering the people who actually control the workflow. Here is why the Middle Manager is your most undervalued productivity asset for 2025 and beyond.

In our last Hot Off The Press special, we discussed why a glossy "Macro Culture" isn't enough to keep people and Micro Team Culture is the key. But there is a more urgent cost to neglecting your Micro Team Cultures: Velocity.

For the last decade, the trend has been to remove middle management to "streamline" decision-making. We called it flattening. But as we move through 2025, the data is showing that this strategy backfired. Instead of speeding up, organizations lost their "connective tissue"—the very people responsible for translating strategy into execution.

The "Great Flattening" didn't create agility; it created chaos. And now, we are seeing a "Middle Manager Renaissance"—not for the sake of hierarchy, but for the sake of getting work done.

 

The "Productivity Multiplier" Effect

Recent research from 2024 and 2025 flips the script on the "useless middle manager" trope. It turns out that when you bypass these leaders, you aren't just risking retention; you are actively bleeding output.

Consider the numbers:

• The 21x Advantage: According to McKinsey, organizations with top-performing middle managers see 21x greater shareholder returns over five years compared to those with average managers.
• The Execution Gap: Gallup found that managers account for 70% of the variance in team engagement. Why does this matter for speed? Because highly engaged teams are 14% to 18% more productive and 23% more profitable.
• The Cost of Neglect: As mentioned, the global economy lost an estimated $438 billion in productivity in 2024 largely due to manager disengagement.

 

From "People Managers" to "Blocker Removers"

To fix productivity in 2025 and through 2026, we need to stop viewing middle managers as administrative gatekeepers and start treating them as Productivity Architects.

A "flat" organization assumes information flows perfectly on its own. It doesn't. A strong middle manager creates a "Micro Team Climate" of clarity—shielding their team from corporate ambiguity so they can focus on deep work. They don't just "supervise"; they unblock.

 

High-Performance Fuel: Precision Recognition

If you want Velocity, you also need fuel. This is where most organizations fail at "culture." They rely on Macro-Recognition including, annual bonuses or "Employee of the Month" awards, which are too slow to impact daily behavior.

To drive productivity, you need Micro Team Recognition, and only a middle manager is close enough to the ground to deliver it.

Recent studies show that employees who receive great recognition are 20 times more likely to be engaged. But for productivity, the type of recognition matters. It’s not about "celebrating everyone." It’s about reinforcing the behaviors that drive speed.

• Celebrate the "Unblockers": Don't just praise the person who scored the goal; praise the person who cleared the path. Middle managers should publicly recognize employees who fixed a broken process or shared a resource that saved everyone time.
• The "7-Day Rule": Recognition has a half-life. If you wait for the quarterly review to say "good job," the dopamine hit is wasted. Managers need the autonomy (and budget) to celebrate wins within 7 days of them happening to lock in that high-performance habit.

 

3 Steps to Turn Managers into Productivity Engines:

1. Kill the "Bureaucratic Load": McKinsey reports that 44% of managers see bureaucracy as their biggest hurdle. You cannot ask a manager to drive team speed if they are drowning in admin. Audit their time. If they are spending more time on reports than on unblocking their team, your structure is broken.
2. Train for "Operational Velocity": Most manager training focuses on soft skills (empathy, listening). While crucial, we also need to train them on Team Operating Systems. How do they run a team that actually solves problems? How do they protect their team's focus time? How do they celebrate the wins?
3. Measure "Blocker Removal": Instead of just measuring team sentiment, start asking teams: "How quickly does your manager resolve issues that are stopping your work?" Make the manager’s primary KPI the velocity of their team, not just the happiness.

 

The Bottom Line:

Macro-culture sets the vision, but Micro Team Culture is the engine that gets you there. If your organization feels sluggish despite having "agile" structures, stop blaming the individual contributors. Look at your middle layer—and give them the power and praise they need to clear the path.

Sources:

https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/the-organization-blog/middle-managers-can-succeed-by-simplifying-the-role

https://www.gallup.com/workplace/285674/improve-employee-engagement-workplace.aspx

https://www.fm-magazine.com/news/2025/apr/productivity-sinks-as-manager-engagement-falls-globally/

https://www.gallup.com/workplace/650174/employee-retention-depends-getting-recognition-right.aspx

https://www.patdoyle.ca/Blog/ArticleID/1778/Why-Talent-Keeps-Leaving--And-Why-Culture-at-the-Macro-Level-Isnt-Enough