The End of the Middle Layer

Economic Civilization is teetering on the edge of collapse thanks to many rich countries spending more than they make for many years.  The party is over for Greece and Spain.  And perhaps the Americans as well. 

It may fall off, if the American economy implodes with a debt ceiling impasse, ignoring the crippling debt, the economy will continue in some form.  And even if they do collapse the businesses that inhabit the economy will continue: people will still need phones made and bread to eat.

These companies are going to survive or fail based on their good or bad organization, amongst other factors.  But they have also undergone the same bloated behaviour as the First World nations.  They have the same pension overhang, and the same inefficient departments.

The biggest problem with each, government and company, is that they are run by people that think that bigger is better, not smarter is richer.  The inefficiency is a direct result of the middle layer, too many managers, too many layers, too much process to be nimble.

But instead, the top layer is more interested in keeping the organizations as they once succeeded, not how they need to be to succeed in the future.

It used to be that old, slow, elephantine companies would be outclassed by the smaller, brighter companies.  The Darwinian theory in economic practice. But governments are in the habit of refunding failed, psychopathic, lethargic, big companies that deserved to fail and ruin all the deserving share holders.  That is the way of survival of the best adapted.  Instead, these companies that are too big to fail put a gun to the head of the workers and the economy and demand a bailout. And the amount of money they expect is greater than any bank in the world would finance.

This behaviour has ruined the way things should work. The current downfall won't stop unless things change.

And to make matters worse, we burden every organization with a myriad of requirements, laws, departments -  HR, legal, public relations, and on and on that it's impossible to compete with a small spartan company in the developing world.  No wonder companies relocate to China, better to pay the same and compete on a level playing field.  The problem is the culture of bureaucracy has grown and reinforced itself over the years.  It's the very nature of bureaucracy, it reinforces its own justification. The problem is middle managers and middle layer workers fight harder to keep in place than help plan the improvements needed.

So here is the way to eliminate the excess and improve your companies odds of survival.  Trim down the process, trim down the bureaucracy, and get rid of managers.


You pay workers the least per hour and you get the highest output from them. So unless you plan on automating your entire production line - which still needs workers to fix the machines - you would be better off trimming the managers, extra staff positions and so on.  You don't need more than one vice president, if there are two then they will just team up their sociopathic intentions to oust you any way.  Fire a few vice presidents and watch them fall into line.


It's that simple.  Here are the facts: workers produce and managers direct them.  You pay workers the least per hour and you get the highest output from them. You pay managers to oversee production and they get more for the risk reward they assume.  But in the end you as the president are responsible anyway so you don't need that extra overhead - you've been conditioned to think you do.  Workers are the backbone that produce your output, and they incorporate all the knowledge to produce. So unless you plan on automating your entire production on line - which still needs workers to fix the machines - you would be better off trimming the managers, extra staff positions and so on.  You don't need more than one vice president, if there are two then they will just team up their sociopathic intentions to oust you any way.  Fire a few vice presidents and watch them fall into line.

Presidents have got to realize that plan expensive mergers to justify their bonuses are risking a lot to yield an uncertain reward may work for a while, but it's eventually going to catch up.  It's less risky to improve the efficiency and plan for future products.  Here's the cost benefit analysis: attempt a merger of two large organizations to meet your performance bonus objectives and your risk ending your career for one year's pay plus bonus and severance.  Streamline your company to compete better and your chance of losing your job is less and you may still meet those performance goals. Upside is several year pay plus that bonus.

Here is the mathematical reality: the economy and everything in it is governed by randomness.  Your decisions impact the performance far less than you believe.  So the less risky moves don't add unnecessary risk to your position.  Being risky  exposes you to more risk. It exposes you to more randonmess - perhaps the two cultures are incompatible, perhaps the assets you assume they have are worthless upon review, perhaps they put lipstick on the pig to sell it to you. Ouch, that won't look good on you.

Consider it this way, if a vulture investor took over your operation, they would search through for the valuable assets, and keep efficient money making units intact.  Why do a worse job than a vulture would in running a company you took so long to succeed?

The First World countries and companies that adapt and adopt a Spartan attitude will reap greater rewards than outsourcing and mergers combined.