4 Reasons why Startups need Middle Management

Naval, the CEO and co-founder of AngelList, wrote on his blog – “With AngelList, we want a team of self-managing people who ship code... Keep the team small. All doers, no talkers. Absolutely no middle managers...” This is a really interesting approach and probably works in a mature market for startup talent. It definitely makes sense philosophically but let’s look at some of the key aspects of the argument in view of the startup talent market in India.

While India does have a large talent pool, there are serious question marks on employability. Even among employable talent, there is a major bias towards large brands and startups are seldom the first choice of job seekers. True, an increasing number of people are willing to go the startup route. But an increasing number of startups are also vying to get such people on board. And willingness to work in a startup need not always overlap with capability. Then of course, are the twin problems of dispersion & dilution. Great startups and the right talent are often too geographically dispersed and diluted (by unworthy talent and not so great startups) for much productive matchmaking to happen.

There are also some common pitfalls while hiring that B. Mohan Kumar and I wrote about a few months ago. My point is this – it is extremely difficult for startups in India to get the kind of self-managing people that Naval talks about. I would therefore argue that middle managers are extremely essential for startups as they begin to scale and here are 4 reasons why you must build a strong middle management layer:

Supervision & productivity

Startup employees need to be supervised and guided. Not every new hire will come in with the innate motivation to give it all to the job. Even if shirking is not an issue, there is a need to ensure that the team’s efforts are in the right direction and it’s not a fruitless toil. Often, you will hire people who need to be trained on the job. As a founder, you can’t afford to be doing this on your own. At some stage, you just won’t have the time. Even if you have the time, it may not be the best use of it. You need middle managers who will take ownership and accountability for work done by their teams.

Motivation & team issues

Employees also need frequent recognition and appreciation. They have day to day issues – personal and inter-personal, which they look to you to address. In smaller teams, you are able to give dedicated time to employees but this gets tougher as the startup grows. Soon, you find yourself struggling to balance time between critical market/ client facing responsibilities and internal team issues. You may have an important press conference to prepare for but what do you do when the new intern comes complaining? Formally designated managers are required to resolve day to day issues and be responsible for the team’s productivity & motivation.

Building capability

Almost every startup strives to become tomorrow’s big business. You can’t do this if every employee continues to do the same work in the same way day on day. You need to build internal capability so that when time comes to scale rapidly, you are not left running helter skelter for the right people. Yes, it can be argued that when you really need the people managers, you can hire them. But at that point of rapid expansion, do you really want people managers who are new to the company and may not fully understand your culture, values and ethos? Even on a day to day basis, you will soon have employees coming and asking what’s next for them. You need people managers who work closely with team members and are aware of their strengths & developmental needs so that the assignment of new roles/ responsibilities is not a shot in the dark.

Rewarding performance & loyalty

Every startup has its core team members – those who have been there from the start, who live and breathe the company’s culture and who have strived to take it where it has reached. How do you reward these employees and show them career growth? Being part of the early team, they will often already have key roles. In most cases, they will already be required to now work with others and supervise them. But while they are senior to some of the more recent hires, they are not the founders/ co-founders; this puts their status in a strange spot. Formally giving the managerial status to these employees is an effective reward and recognition of seniority, especially in the socio-cultural context of India. This will also empower them, giving them more authority and ownership.

Interestingly, Google has recognized the importance of middle management, departing from the initial beliefs of Larry Page and Sergey Brin about running a company without bosses. I firmly believe that startup founders will gain from building a strong middle management layer. Middle managers help take off operational burden from the founders, drive team productivity, enhance employee engagement and take the startup to the next level. Of course, you do need to be careful about selecting your middle managers and must spend some time in effectively grooming them to take on their roles. I will cover more on this in my next article.