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The Hidden Cost of Cutting Middle Management

August 21, 2025By Mike Hohnen

I keep reading about companies slashing middle management roles to cut costs and accommodate AI implementation. Fewer managers, larger spans of control, improved efficiency – it sounds logical on paper.

But there’s a relationship crisis hiding in these spreadsheets.

? When Trust Starts to Erode

When managers suddenly find themselves responsible for 15-20 people instead of 6-8, something critical gets lost.

Using David Maister’s trust equation as a lens, two elements immediately suffer:

  • Intimacy drops – there’s simply less time for meaningful connection
  • Perceived self-interest rises – managers appear more focused on keeping their heads above water than supporting their teams

Trust doesn’t collapse overnight – it seeps away slowly, often unnoticed until significant damage is done.

? The Engagement Cascade

The first casualty? Engagement.

We know from decades of research that your relationship with your immediate manager is the single biggest predictor of workplace engagement. When that relationship weakens, everything else follows:

  • Decision-making slows
  • Innovation stagnates
  • High performance gradually slides into mediocrity

Meanwhile, the remaining managers find themselves drowning. They’re expected to do more with less, but nobody’s fundamentally changed what “management” means in this new reality.

? What Needs to Shift

Here’s what I believe needs to happen:

? First, micromanagement becomes impossible – and that’s actually brilliant.

With larger teams, managers have no choice but to embrace real empowerment. Not the lip-service version where we say “you’re empowered” but still expect approval for every decision. True empowerment where people are genuinely trusted to own their work.

? Second, remaining managers must dramatically reduce their task work.

Everything that can be delegated must be delegated. Their primary job becomes relationship building – creating the conditions where trust can flourish even with limited time.

? The Transformation

This isn’t about working harder; it’s about working fundamentally differently.

The manager’s role transforms:

  • From task coordinator ? to culture creator
  • From decision maker ? to capacity builder

? The Remarkable Discovery

The companies that recognise this will discover something remarkable: they don’t just maintain performance despite fewer managers – they often exceed it.

Because when you’re forced to trust people more deeply, to empower them more completely, to focus purely on the human elements that drive performance, magic tends to happen.

The question isn’t whether we can afford to maintain these relationships with fewer managers. It’s whether we can afford not to.

What shifts have you observed in management roles as organisational structures evolve?

#Leadership #MiddleManagement #Trust #Engagement #OrganisationalChange #ManagementEvolution #WorkplaceRelationships

Filed Under: General

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