Flat Doesn't Mean Functional
- Matthew
- May 29
- 4 min read
Why Cutting Middle Managers Won’t Save You – Unless You Rebuild Leadership from the Ground Up
Microsoft just reported $70.1 billion in quarterly revenue. Up 13%. Cloud growth is at 22%.
And still, they’re cutting thousands of managers.
Not frontline staff. Not engineers. Not executive leadership.
Middle management.
WHY? This isn’t just about trimming budgets – it’s a strategic signal. Organizations are scrutinizing every layer and asking: Does this role actually add value?
In too many companies, the answer is no. Here’s why:
Middle managers are often used, not enabled.
Positioned as messengers, not leaders.
Cast as blockers, not builders.
But cutting the “middle” isn’t a solution – unless you’re clear on what comes next.
If you're trimming managerial layers because they feel redundant, don’t just delete –redesign.
Let’s Start with the Basics: Leadership vs. Management
These two aren’t interchangeable.
Management is about control: budgets, reporting, process.
Leadership is about influence: trust, clarity, vision, behavior.
One ensures stability. The other drives direction. We need both.
But here’s the catch: Most managers are trained in how to manage – but rarely in how to lead. They’re given dashboards, deliverables, and deadlines.
What don’t they get? Coaching frameworks. Trust-building strategies. Communication tools.
That’s where teams stall. And where potential often goes untapped.
So, Where Should Middle Managers Add Value?
The military offers one of the clearest models – refined for clarity, speed, and accountability under pressure.
Every level plays a distinct role:
Squad Leaders (9–13 people): Coach individuals. Build trust. Ensure frontline execution.
Platoon Leaders (20–50 people): Lead squad leaders. Align teams. Remove blockers.
Company Commanders (100–250 people): Manage strategy. Coordinate resources. Support systems.
No one is overloaded. Each leader manages 3–5 others – just enough to lead well without losing connection.
In business terms:
Squads execute.
Platoons align.
Companies scale.
Remove a layer without redesigning roles and responsibilities, and the system breaks.
You don’t flatten – you fracture.
The Data Agrees: Smaller Teams, Stronger Leadership
The “ideal” team size isn’t arbitrary. It’s grounded in behavioral science, operational efficiency, and decades of organizational research.
Here’s what the data says – and why it matters:
1. Dunbar’s Number (Oxford University)
Anthropologist Robin Dunbar found that humans are cognitively wired to maintain approximately 150 stable relationships, but only five to eight deep, emotionally strong connections.
This range – what Dunbar calls the "sympathy group" – is where trust, empathy, and loyalty are strongest. It’s no coincidence that military fire teams, sports squads, and elite task forces are built around this exact range.
In leadership terms: A manager can honestly know, effectively support, and coach about 5–8 people well. Beyond that, quality drops, and connection frays.
2. Amazon’s Two-Pizza Rule
Jeff Bezos famously declared that any team too big to be fed with two pizzas was too big to function effectively.
This wasn’t about snacks – it was about speed and alignment. Small teams move faster. They coordinate better. And they avoid the communication gridlock that bloats larger groups.
Keep it small, and you keep decision-making nimble and ownership high.
3. Google’s Project Aristotle
Google studied over 180 internal teams to understand what made the most effective ones tick.
The top factor? Psychological safety.
And the most psychologically safe teams? They almost always had eight or fewer members.
Why? Because:
Everyone gets airtime
It’s easier to spot distress or disengagement
Vulnerability and candor feel safer in smaller groups
The takeaway: Small teams don’t just move faster—they feel safer. And safer teams perform better.
Why does this matter?
Because as team size grows, communication complexity explodes:
5 people = 10 unique relationship paths
10 people = 45
15 people = 105
Now, picture a leader trying to run 1:1s with 12–15 direct reports. Even biweekly check-ins become unsustainable. Coaching fades. Strategic alignment frays. People fall through the cracks.
Yes, AI Will Reshape Management – but It Won’t Replace Leadership
AI can:
Automate reporting
Monitor performance
Support task coordination
But it can’t:
Build trust
Coach through growth
Lead through ambiguity
Read emotional context in a 1:1
Don’t confuse automation with leadership. And don’t eliminate managers without rebuilding the system that actually develops leaders.
Here’s What’s Really Driving the Cuts
The pressure to hit quarterly numbers and satisfy shareholder demands has created perverse incentives:
Cut headcount to boost margins
Flatten orgs to appear agile
Prioritize optics or even quarterly shareholder value over long-term performance
It works – until it doesn’t.
Take DOGE. In a rush to streamline, they flattened an agency built to support complex, high-stakes operations. What followed? Delays. Dysfunction. A collapse in trust.
Would you fly out of Newark right now?
We glorify flat orgs. But when taken too far, they don’t remove waste.
They erode capability.
Middle Managers Are Your Leadership Bench. Don’t Gut It.
Here’s what’s at stake:
Emerging leaders are your future directors, VPs, and execs. But they’re often promoted for what they’ve done, not for what they’re expected to do next.
Being a great engineer doesn’t mean you’re ready to lead engineers.
That first leap – from contributor to manager – is where most breakdowns begin. It’s also where the most significant potential lives.
At Goode Designs & Consulting, We Rebuild from the Ground Up
We created the CREATE Leadership Framework to do exactly that.
Because leadership isn’t just oversight. It’s capacity-building. We believe the purpose of a leader is to CREATE more leaders. Here’s how:
C – Culture: Model values. Build safety. Shape the environment.
R – Relationships: Foster trust. Navigate conflict. Lead with empathy.
E – Execution: Align strategy to action. Drive clarity. Follow through.
A – Agility: Adapt to change. Lead through uncertainty. Enable iteration.
T – Teaching: Coach, provide feedback, and grow talent.
E – Ethics: Lead with integrity. Build trust that lasts.
CREATE is also the foundation of our GoodeStart Onboarding Program – a 90-day journey that equips new managers with the language, mindset, and tools to lead effectively from the start.
Because leadership isn’t innate. It’s taught. And that first promotion? That’s where it matters most.
So yes – flatten where you must. Automate what you can.
But whatever you do, don’t forget to develop the leaders you keep.
That’s where middle managers bring value. That’s where your organization scales – or stalls.
Let’s make the next layer of leadership not just leaner, but smarter, faster, and more human-centered.
What’s one thing you wish you’d been taught before your first management role?
👇 Drop it in the comments.
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