Study: Middle Managers More Important than Top Execs

Forget about Dilbert's pointy-headed boss. A new paper from Ethan Mollick, at the Wharton School of Management, argues that middle managers have more influence on a company's performance than the top managers they work for, the much-applauded innovators who report to these leaders, or the processes, structure or strategy of the company itself. That has to be sobering news to companies that reflexively look to eliminate middle management jobs when they are looking to lay people off.

Mollick used data from the computer gaming industry to measure the influence of managers and innovators. The gaming industry is unusual in that each game is published with a long list of credits, so a researcher such as Mollick can see exactly who worked on each title. The average team in Mollick's research had 45 full-time people, plus a few dozen more who were called in occasionally, such as voice-over actors and quality-assurance testers.

Who are the Middle Managers, and Who are the Innovators?
Mollick considered producers (despite their Hollywood-sounding titles) to be the middle managers of the gaming industry. In the gaming industry, producers are a lot like the project managers of traditional software development, responsible for "team management, resource allocation, team communication, and external relations ranging from PR to interfacing with company management," Mollick writes. The designers are considered to be the innovators. They're the ones who invent the game idea and are in charge of leading the software development team to make it a reality.

To get data on a large number of games, Mollick drew from the MobyGames database (for credits), NPDFunworld (for revenues) and Game Rankings (for reviews). He focused on individuals who moved between companies, analyzing the impact of more than 500 designers and more than 400 producers. He found that:

• Middle managers matter most. These much-maligned folks were responsible for 24.1 percent of the variation in the amount of money a game made, and 18.6 percent of the variation in how well it was rated by critics.
• Designers had some impact on ratings, and very little on sales. Individual designers were responsible for just 6.3 percent of the variation in how well the game did. They had more influence on how well the game was rated-14.2 percent-but that's still less influence than the middle managers had on each game.
• The top managers matter least. Mollick refers to earlier research that finds, consistently, that top management teams are responsible for less than five percent of a company's performance.

• Good managers connect ideas with reality. A good manager should be able to whittle down a designer's product ideas into a realistic project plan. A less capable manager, even one working with a better designer, might not be able to build that bridge between concept and reality.
• Team building counts. Mollick writes that certain designers may be "good at facilitating the sort of collective creativity that results in high-quality products... while others are less capable of making their teams more than the sum of their parts."

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