Stepping into your first management role is a big shift. As an individual contributor, success was...
The purpose of a company is to generate value for customers and capture the revenue created. Doing this efficiently is critical to long-term success. But efficiency doesn’t happen on its own—left unchecked, companies, like all systems, tend toward disorder. Every system tends toward entropy – the gradual decline into chaos. Businesses are no exception.
This is where managers come in.
Why Managers Matter
In their book Why Managers Matter: The Perils of the Bossless Company, Nicolai J. Foss and Peter G. Klein argue that hierarchy and management are essential to maintaining order. They write:
“Hierarchy represents an effort to solve the universal twin problems of coordination and cooperation faced by any social group.”
These problems—how to align people’s actions and interests—aren’t unique to business. They appear in every system of human activity. Whether it’s a startup trying to bring a new product to market or a sports team working toward a championship, success depends on coordination and cooperation. Without leadership, the system tends toward confusion, inefficiency, and conflict.
The Role of Managers in Coordination and Conflict Resolution
Managers play a crucial role in ensuring that work is structured in a way that enables efficiency. As Foss and Klein put it:
“An important role for managers is making sure that processes are coordinated to help avoid conflict. Reducing conflict if it does emerge is another key managerial task.”
When priorities compete or departments work at cross-purposes, managers step in to resolve these tensions. They ensure that people are working toward the same goals and that resources are being allocated effectively. This role is especially important in complex organizations where different teams and functions must align to deliver value.
The Push to Remove Managers—and Its Risks
Despite their importance, middle managers are increasingly being squeezed out of corporate structures. Companies are flattening hierarchies in an effort to cut costs and speed up decision-making. According to The Wall Street Journal, middle management positions have declined by 6% since the pandemic, and remaining managers now supervise, on average, three times as many employees as they did in 2017.
Tech leaders like Meta’s Mark Zuckerberg have questioned the value of management layers, advocating for leaner organizations. In 2023, he launched Meta’s "Year of Efficiency," which involved cutting managerial roles to streamline decision-making. While there are certainly cases where bureaucracy slows progress, eliminating too many managers can lead to unintended consequences.
With fewer managers in place:
- Employees receive less mentorship and career development.
- Coordination becomes more challenging, leading to inefficiencies.
- Conflict resolution is harder, as fewer people are responsible for guiding teams through disagreements.
- Burnout increases—one study found that 86% of managers are already experiencing job burnout.
Managers as Value Creators
The best managers don’t just supervise work; they amplify the impact of their teams. They clarify priorities, remove obstacles, develop people, and create an environment where employees can do their best work. Organizations that undervalue this role risk slipping into entropy—where misalignment, inefficiency, and disengagement take hold.
Rather than eliminating managers altogether, companies should ask: How do we ensure managers are truly adding value? Investing in strong leadership development and empowering managers to focus on what matters—rather than unnecessary bureaucracy—can help businesses stay competitive through coordination and cooperation.
At the end of the day, managers are not just overhead. They are architects of order, and their role in fighting entropy is one that no successful company can afford to ignore.
Key Takeaway
As companies navigate the balance between efficiency and effective leadership, one thing remains clear: great managers add value by fostering coordination, reducing conflict, and ensuring teams operate at their best. Simply cutting management layers without investing in leadership development can lead to burnout, inefficiency, and disorganization.
That’s why equipping new and aspiring engineering managers with the right skills is more important than ever. My 12-month IC to EM program is designed to help individual contributors transition into effective managers by developing key leadership competencies—ensuring they’re not just overseeing work, but truly driving impact. If you’re stepping into management or want to sharpen your leadership skills, let’s build the foundation for your success together.
