Are There Too Many Managers?

Welcome to We Fixed. You're welcome. The show where we take over companies, you come

along for the ride. We try to put them back better than we found them.

A lot of us are wired to achieve. Give us a task, we'll crush it. Tell us we can't do

something, we'll prove you wrong. Dangle a promotion, we will chase it relentlessly

until it's ours. Because of this, we built an entire economic system where people who

stick around show their loyalty and prove their worth expect to move up. Bigger salary,

more responsibility. Not all of us want these things, but a lot of us do. Recognition,

compensation, mobility, fulfillment. So, we play the game and over time we move up. We

get put in charge of others. We earn leadership titles. And once we've climbed the ranks, we

don't want to move backward. That's the big problem we're dealing with today. Have we

created a system that has too many decision makers and not enough executors? Are there

too many managers? And if so, is this a recipe for disaster for our labor market? Are we

all doomed? Well, that's a big question, probably one for a labor economist. Fortunately,

we have a great one with us today. Joining us is Ron Hettrick, one of the most respected

labor economists in the country, and someone who looks at the workforce from a macro

level with very real implications for how companies operate and succeed. Ron's the principal

economists at Lightcast, they're a big deal, a former Bureau of Labor Statistics economist

and a trusted advisor to Fortune 100 companies, staffing firms and policy makers. He's also

the author of the demographic drought and a report called Who's Going to Do the Work,

which feels very appropriate for our conversation today. Ron, it's so great to have you tell

us just a little bit more about yourself. I mean, you kind of hit a lot of it. I've

been a labor economist for my forever. It feels like 33 years started off the Bureau

of Labor Statistics. I think that backing put me in a situation where all that really

ever mattered to me was the data. I was taught very early, you know, don't write your

opinions. You know, let the data speak and the people disagree with you, then they have

to come at you with better data. That was a valuable lesson for me over the course of

my life. And I think, you know, what I've valued, what I try to write, when I speak,

one of the things that means the most to me is that people can't tell the motivation.

You know, I'm not trying to support any particular side. I'm just trying to show people

what's happening and let them make the decisions. I'm not going to make the decisions

for you, you know, because I'm an economist. We only raise problems. We don't solve them.

Apparently, that's what we get told. So, yeah, that's kind of been my whole career

pretty much.

Well, thanks, Ron. We're going to put you today to work today, for sure, in this conversation.

You're going to be instrumental to everything we're talking about. And let's, let's just

go there. We're going to talk about something that we've, we've all been taught to play

into. So, success is equivalent to upward mobility. So, you get a degree, you get a job,

you learn the ropes, you stand up under pressure, people start to trust you, you're in. You

get to manage others, you become a leader in the company. Well done, you. If you get

a promotion, that's something to celebrate. If you get passed over for a promotion and

stay exactly where you are, oh, I guess you didn't have what it takes. But the truth

is, we can't all move up all the time. Can we? And we can't all be delegators. Someone

has to do the work work. So, that's where the numbers get interesting. Even at a tough

labor market like this one, the US still has roughly six to seven million open jobs.

These are millions of open roles, but ask around. People are struggling to find work,

which doesn't add up. Except the lot of that demand is concentrated in roles that require

plugging in and executing, not making top-down decisions. Despite this, ways of society continue

to place value on degrees and career advancement, even in fields that are showing real signs

of saturation. Let's think about this as more people keep piling into fields that are

already full and expecting the rise to the top quickly, that seems like a misalignment,

unless I'm wrong, that kind of misalignment could upset our entire labor market. So, that's

where we are. Lots of existing managers already have jobs and want to move up or at least

keep the jobs they have. Lots of managers have lost their jobs due to downsizing and are

actively looking for management roles. They want those existing jobs. And there are lots

of fresh-faced wannabe managers just entering the workforce that don't want to stay entry

level. They want what we've all been promised to move up. They want those jobs. Are there

too many managers? Ron, I know you've got something to say about this. Why don't you get

that started? There's just so much to say about this. I think, first off, we have to understand

that management is pretty much anything. It's like it's a supervisor up to a CEO. There's

going to be directors and managers and vice presidents and presidents and some organizations

have every kind of iteration of those that you can possibly have. And so, you do end up

with layers. And I think the most important thing that you said is, these are created

because you're trying to reward your high performers. But there's only so far you can

go. And I think also, let's say you're a developer and you kind of did that for a while. You're

like, well, I don't want to code forever. I don't see myself retiring coding someday. I

would like more responsibility. And so, companies in order to kind of keep these people around,

maybe harness their intellectual capital will create these opportunities. Well, the

keyword here is create. Maybe it didn't exist and you just keep creating levels of management.

And then layoff time comes around and we go in and we slash all these middle managers.

And I think what we did is kind of forgot, well, what was the middle manager there for? Well,

they had an intellectual capital that we were trying to harness. But in the role that they

moved into, that had less value. So, you know, if you look at all white collar rolls in

this country, so everything that pretty much has a degree, the largest bucket is actually

managers. So when we talk about, you know, white collar workers could lose their jobs.

The biggest bucket would actually be managers. So are we going to use technology to replace

managers or managers going to try to use technology to replace their workforce? And if

that's a case, then who are they managing? So that's why we say like, there's so much

to unpack here. We could take this in so many different angles. Well, Gina, you start take

us from the talent perspective. And you know, you laser it in on talent all the time.

You know, what, what do you see? It's really interesting because, you know, my focus is

actually working with companies to help build out their organizational structures. So the

question of how many managers is too many managers? And who is on the leadership team and

who's who's an IC? And I think, you know, as we have this conversation, I think it's important

to know that there's no one size fits all metric here. You know, it's not a slope in

a year, you're at the 95th percentile. So that means that you're automatically a manager.

It really does depend on the organization. So for example, you know, if you're a team

of 40 people, right, not everybody can be the CEO. There's one CEO, right, bracing up

the top. That CEO cannot manage 39 other people. That's impossible, right? So there is

numbers and there is data and there's a science called organizational psychology on the

why and what that number breakdown looks like. There's science backing that. The reality

to Ron's point is it's about people's intellectual capital, what they're bringing to the table.

Because you might have somebody who's a very senior IC, we call it in the organizational

cycle, which is an individual contributor who they might not have any interest in managing

people. And actually, you see this a ton in the creative and marketing and design field,

which I specialize in, right? There's some designers who say, I love getting in the

nitty-gritty. I've been doing this for 15 years. I have created a brand around what I do.

I love this. I never want to sign off on somebody's vacation. I never want to manage a direct

report, right? And so as one shared, you're creating these new levels within kind of what

management looks like. And what you're also say that isn't often talked about is sometimes

managers are not actually managing people. So it's also how we define management in terms

of this middle management piece. So I think it's very important to look at it from that lens

and understanding that yes, there can be too many. If you're 40 and 40 people are managers

at this work, but it really is very specialized and nuanced to your organization and what

you do and also your industry. Organizationally, have we built a system where someone is offered

an opportunity to move up, to delegate to others, and they say, no, I don't want that. I don't

want to take that on. It doesn't coincide with my personality or my, isn't it perceived as some

kind of deficit in that individual a lot of the time? It depends, right? And again, you're looking

at these huge organization. Let's talk Oracle for a second. We just laid off 30,000 people this

week, right? That's a lot of people. A lot of those people were quote unquote middle managers.

In organizations like that to grow, it is again, a numbers game. How many people can you have

under you? How many people can you, you know, how many levels and rungs can you climb so that you

can get ahead if you're wanting more voice and impact into the work that you're doing, right?

Again, when we look at management and CEO and executive leadership, it's the people who are making

decisions, right? That is what management. That's kind of like the resource that you're kind of

fighting for is who is it making those decisions for your team, the impact of the work that you're

doing. Not everybody can make the decision. We can't have too many cooks in the kitchen. So yes,

for huge organizations, that's how you move up for organizations that are successful in today's market,

where maybe you don't have 10,000 people. It's a smaller team. You're not focused on how many

managers it's, how is this team, this person making that impact for you? And it's more nuanced.

And those are the people who are successful. So it's also changing this mindset of you need to

become a leader to move up. That's changing today because as Gen X is Gen Z is trying to get into

the workhorse. They're realizing, I only have, there's only this many managers because this is

so how can I move up what fully do? And so I'm curious, Halissa is someone who works in the

operation side of things too. What are you seeing from that angle? Well, Ron, I think this is

an amazing topic and I'd really love to hear your side from the data and economic side, but this

really topic really hits close to home for me. I've been lucky enough to spend decades of my career

invisible value driving roles, operating roles, leadership roles, where I was building teens,

tightening processes, fixing leaks in the system. But over the past couple years, I've had a very

personal look at what happens when companies get to stat at the leadership level at the very top.

So I've now been laid off from two VP level roles in a row, both during restructuring periods.

And it's not because the work wasn't valuable. I was leading one area, I was leading a team of

450 people. In another company, I developed all the teams post sales. So five teams, 150 people,

zero to 150 in four years. So it's because the structure got heavy, what you were talking about, Ron.

Too many people managing the work, too few people actually doing the work. And so when companies

rebalance, they often do it with that blunt instrument, which is layoffs, or we'll just did it.

They cut costs by terming leadership. I understand it's a for-profit. I've had to make those tough

decisions. I've had to lay off probably over a thousand people in my lifetime. The irony is that

many of these people being sidelines are the ones with the deepest expertise, pattern recognition,

their operational instinct, all these things. And Ron, I mean, we're talking about

this continual merge of workforce. I have a senior in college right now getting ready to

graduate in a month. And these are the very people that need mentoring, and that need the leadership

and stabilize your workforce right now. So I've seen my peers struggle in this environment,

economic environment. But I'd love to hear, what are the conversations you're having with companies,

and especially those, you know, C-suite people that need to think about how do you recalibrate

and make sure that you have the right blend, operational expertise, leadership expertise,

you know, culture expertise, all the things that are important.

You hit upon what I think is the most important part of this whole thing. And that is,

what do you do with experts who don't want to manage? Like, what's the career path for somebody

who just wants to make more money because they're killing it at what they do when they want to,

you know, advance in that. So my title is Principal Economist. Over the course of my life,

I've done well in certain jobs, and I've been promoted into leadership positions that I really

didn't want. And I was given teams. And I did everything I could to get out of those positions,

because for the exact reason you said, like, I'm an analyst. I want to analyze data. I think

I'm good at it. I've gotten better as I've gotten older. I've been rewarded for that. And I've

been able to do that without acquiring a management title. And I think that that is the biggest

problem. We do value intellectual capital. But you're right. Once you gain this title, it becomes the

what is it? The scarlet letter. Like you're, you're now, you've got your mark. Like, and if something

goes wrong, they're going to come in and wipe these people out. And we completely forgot about

the intent of why we put them there in the first place. That's a corporate problem. I mean,

you know, can speak to that. That's an organizational problem. You have not created a system of

reward for what these people are doing. I saw a tremendous video. And this is a very powerful

statement that's that was in this video. And basically the point of video was you're seeing

these layoffs now because the cost of capital has gotten much more expensive when it just

rates went up and you know, in 22 and 23. And when these things happen, then you have to offset

that cost of capital by laying up. And the person's point, which is so brilliant that it said,

if you, if your role, if you can say that your role is tied to creating revenue or protecting

margin, then you're valuable. More trouble, you have explaining how your role creates revenue

or protects margin. You're in a very dangerous place. You should not struggle to illustrate that

point. That should be where to come immediately out of your mouth. And I think that what happens

is when you marginalize a bright person by sticking them in a management role where they are now

distanced from that, you know, creating the revenue or protecting margin because they're

just literally managing people. I mean, you've really set them up to fail. And I think corporations,

if you go way back, the core of all of this, and this was in the original demographic drought

paper, is that college attainment exploded in the 70s. You know, we used to be a nation that had

very few leaders and a lot of workers, you know, a factory boss and a supervisor, a foreman,

and everybody else was working and they did that for 40 years and then they retired. And then

everybody went to college. We wanted them to do that. And now you have always people come out

and they're aspiring to something more. So they have to pay back their college bills. They have

to obviously they feel like they have to make more money. And I think what that did unintentionally

is you end up creating an enormous world of leaders and you can't have all leaders. If you can go

into battle with 20, you know, 50 generals and one private, you know, somebody's got to be there to

do the fight, but we've created a culture where the private doesn't get rewarded in a mean. So they

look at that and say, well, the only way that I'm going to get rewarded is by being a general. So

I would really, you know, my challenge to everybody is always that are the people who are executing

the vision of the company? Are they the highest rewarded? You know, the managers said almost,

you know, that's just the different profession. Does that necessarily earn more pay? I don't know.

If all you're doing is filling out a schedule, you know, that sounds to me like it's less valuable

than the person who's literally, you know, doing that work on the line. But we've created a reward

and incentive program that is built all around us. How do you undo that? Maybe Chino knows. I don't

know how you want to do that. And I'll talk about it because I'm helping, I'm helping companies do

just that. So I love what you were saying about the general and the private, right? The challenge here

is the private, you can't become a general without being a private, right? It's not a manager. You're

not just a manager out of nowhere. You've had to have the experience going behind. You know, they ask

seven, eight years of experience, like you've needed to be a private at one point. I want to actually

pull back a layer two because when we're talking about layoffs, and you really, this is the big

thing when I talk about managing up to a lot of the different people that I work with, it's

you need to be able to to share why you add value. I'm a people person. I'm in recruitment. I am

not doing any of the work, but I'm bringing the people in to do that. If you don't have a solid team,

you have nothing. The people are your value. And that's why it's important to hire an expert like me,

or to have someone on your team like me to get you the very best. That's the value. The problem is

who are you saying that team? What is the room you're speaking to? If you're a private,

you can show that. As a general, are you a junior manager, where you don't actually have access

to that executive room, where you're actually able to state your case and say, you know what,

this core team is incredibly fundamental in the work that we do. We will not make money. We will

not have a profit without this team. This team doesn't function without direction and I'm that

direction. Right? And so the challenge with a lot of middle managers is they don't have that

access to the top management who are making the decisions on where to cut. And so what I try to train

a lot of leaders is again, that managing up, you need to constantly show your work, show your work,

have paper, write it out. You know, you should have a little list of like what are all the great

things that I do because when the time comes to this and if you're not able to, they have no idea

they're asking, you know, what's Chino doing? Right? She's hiring a few people, but like, you

know, she's not doing the work. No, I've hired you the best people. I'm the one to do this for you.

I'm the only person that has been able to successfully do this for you. And it's why you're succeeding.

That's why you keep me. And that is a challenge that a lot of people face in their career,

that middle stage where they're like, I don't know how to sell myself into these larger rooms.

And so what you see is they get kind of waffled away, often they go back into being a private

versus that general. And then it creates a larger gap. And so you have more people who are a

little lost versus having that seat at the table. Yeah, I love what you're saying, Chino, because I

do believe that, you know, how you communicate and how you manage that upward trajectory is really

important. I also think, Ron, you brought this up, but when you're sitting and I've sat here at

the C-suite, I sat at the table and you're having these discussions, that component of it is really

very little of the discussion when you're talking about laying up 30,000 people. You're not going

through 30,000 reviews. What you're going through is, okay, this is the PNL. This team costs us

this much. The collateral damage would be, we can move some of this work to AI. We can move some

of this work over to offshore it, you know, and pay $10 per hour versus the $45 an hour paying.

And our customers may, you know, feel a little pain, a little more friction, but, you know,

we're pretty embedded in the marketplace. So we're not going to lose, you know, brand like Oracle.

I'm not going to lose brand recognition blah, blah, blah. So, you know, I agree that what Chino

with what you're saying, and especially in like these hyper growth startups where there's, you know,

a team of less than 50 people or even less than 100, you can make a huge impact by making sure

that you're communicating exactly what value you're adding, what's the value proposition there.

But I think that when we're looking at larger, you know, when we're looking at economies of scale,

and we're looking at everything across the board, Ron, like how do you change that, you know,

how are we going to culture shift? Because again, like people coming out of college have an

expectation that, you know, I've hired a bunch of these people myself where they are like, how did

you get your job? And I'm like, well, I've been doing this for 30 years. Thank you very much.

You know, and they're like, well, I want to be vice president, you know, I want to be head of this,

you know, in two years. Okay, we'll put in the work, you know, and not more power to you. I love

ambition. I love that. But I'll, you know, I'm seeing that, you know, we've created this monster,

you know, like where we've talked about, like where, you know, and I'm, I'm seeing this struggle

with some of my friends and family where they have kids that are struggling with, do I want to

go to college? I'm, you know, da, da, da, da, and like, I love that we, I have a really great

friend right now and son struggled to decide whether I want to go to college. I don't want to go

to college, blah, blah, blah, so didn't and is now doing, you know, a tech trick or an actual

trade, right? Getting certified is going to have plenty of opportunities because we need people

that are going to do those things. We need electricians. We need plumbers. We need, you know,

you know, mechanics. We need all of those kinds of things and people don't view that in today's

world as the right career path. And then like, you know, when we think about middle management,

you know, there's this whole idea that you start out as an IC, right? You know, you start out as

IC, then you get to be a team lead, then you get to be a supervisor, then you get to be a manager

or assistant manager, you know, but really to your point, Ron, not everybody's made out of that mold

and not everybody can motivate and inspire and and keep a team accountable and connect the dots

for them, you know, with the overarching company goals. And so I really feel like this is a very big

Aaron and Ron, we kind of picked a really big thing to talk about, but I'd love to know like,

how are we communicating this again with with the people that are making some of these decisions?

How are we going to, you know, manage the influx in the, you know, in this economic world?

Yeah. Well, Ron, I want to, I want you to speak to this, but it seems like the middle management

area is also has the most, it's the most precarious has the most vulnerability because you see these

companies do these massive wipe outs and you figure, okay, the entry level that are easily trainable

replaceable. We'll just, we'll get, we'll get that. We'll get rid of them. Those in the middle that

have some degree of autonomy, but we can't quite place what they're going to do and what their

trajectory looks like. Well, they can go and we've been at this for a while. We've seen companies

that are performing pretty terribly and those that are insulated at the top that are making the

bad decisions, they stick around. You know, they, they just tend to, they, they survive.

I would say they, you know, what you're bringing up a really important point is that we can go back

through time and goes through many companies that did kind of some epic layoffs and they're still

they're still here. Like they're doing, they're doing it fine. In fact, you know, corporate

profitability right now is sitting in record levels like companies are making an enormous amount

of money. We have companies who seriously overhired in 2022 and 23, which is why they're laying off

now and their profitability is still fantastic. Not oracles, of course, but, you know, it's still great.

I mean, if it's not kid ourselves, it's not like they were like, we have no money. They're seeing

that they could have some problems, but you know, you do have a lot of companies who are making

these things because they're like, well, we're comfortable. Our shareholders are comfortable with

us making this amount of money. And we have to make sure that we stay at that because anything less

than netting that amount of money is going to look like we're weak. And then, you know, we're going

to lose the about our shareholders. We'll get more upset and then we're going to have to do these

things. So let's get in front of that. Let's lay off all these people right now. It would be one

thing if people were punished for doing that. But only the very worst companies who already had lost

a market share, you know, a blackberry, something like that are truly in jeopardy. You know, if you still

have a dominant position, if you're in Amazon or or a Google and you lay off, I mean, you are who you

are. You're no one's coming in to take your spot. The barriers to entry are astronomical. I mean,

you're hundreds of billions of dollars to try to unseat them. So they can do these things. And I

think that is in an essence, a problem because in good times, you continue to, you set, you hire,

maybe you over hire, you promote and maybe you over promote. And then the second things get bad.

And they do because economies always go up and down. You can't stop that. You can delay it. But it's

always going to happen. You're going to have this whiplash effect for all of those sins that you

committed, right? Like you, you sat there for years, promoting all these people up because

you're really killing it. And then in this particular case, the cost of capital goes up because

interest rates go up. And now you have to reconcile everything that you, you did. And unfortunately,

this is, there's a human beings. So they're caught in the middle there. They're punishment. And

this is what happened. A friend of mine told me about this when Mendoza was doing their layoffs.

You have people who aspired to be leaders. And then so they get those leadership positions.

And then they were let go because they had this higher number. But these were people that were

killing it that were promoted because they were good. You know, and he goes, what happened was

they came in and took these people out. And what they were left with were the underperformers,

the overperformers that they had promoted were gone. And I looked at that and I'm like,

at the time we, we were being told, well, you know, we're measuring twice and cutting once. And

he was like, absolutely not. That is absolutely not what happened. He goes, they gave us a number

and they said, hit the number. And if you don't come up with it a week, we'll come in and just

erase that number. And I think so many companies, unless you just pointed that out in Oracle's case,

what is it? They needed eight to 10 billion dollars. They found a way to getting eight to 10 billion

dollars by adding different buckets together. And then they go, animal, you know, whatever happens

in the future is going to happen. We'll deal with that when we get there. But right now,

we got to make sure that we can overcome this particular deficit. So it's definitely nothing

strategic about the way people lay off. They're usually very quick decisions. It feels like they're

made within two weeks or a week or sometimes I feel like, you know, somebody woke up that morning

and said, uh-oh, we saw the numbers. You know, we got to get rid of this many people. The thing is,

the people that did the cutting aren't going to learn a lesson from that because they protected

themselves. They're just happy. They made it through another day. They don't really care. Like,

the things will get ugly again because eventually they're going to be told, hey, we may have

cut too many people start hiring and they're like, okay, and they start hiring again and they start

promoting. And then you go through the same thing again and they're each time they're going,

did I get cut? I didn't. Okay. I'm just going to go back and keep repeating those same bad happens.

Yeah. Well, I'll stand up for my people in sales and marketing too. We're always on the chopping

block. No matter good economy, bad economy, I've been the last one standing more times than I can count.

Simply because I just keep doing what I do, you know, and I watch everyone around me get the

halls get pretty quiet. But that is something that contributes to bottom line revenue. That drives

a company forward and still a company's mandate or the marching orders are cut something. Oh,

well, we better cut sales and marketing. And the most management positions are company bloat.

We better get rid of those. Those are my people. Yeah. Aaron, you bring up a really good point is

that when we think about like where we're cutting, and this is Chino where I love that I'm so glad

you're one of those people that is helping leaders to think about this. But it's amazing to me that

marketing is always the first team to go because how are you supposed to grow? How are you

supposed to have any more sales? You know, and I, yeah, you know, and the other thing is, you know,

I run operations. And so operations were an expense line. So they're always like, get more

productive, you know, AI this stuff. Well, you can AI everything, you know, and you still need

somebody to answer the phone, you know, and people are still going to call and complain about

really random things. And so I really think that that is part of it is like really having that

intention, you know, around how you make decisions that really can help you stabilize Ron like,

you know, like the markets up and down and up and down. And we all know that we, we make decisions

as humans and some are good, some are not. And how do you kind of go through that with, you know,

trying to drive this intention and understanding what are the consequences of these types of

actions that you're having? And, you know, I had a role, I was a consultant, and that was my role,

was, you know, Hatchet Queen. And I would go in there, and it was really interesting to me,

because when we did the first round of layoffs, we went floor by floor. It was, it was pretty

difficult. And I was with the COO of a hospital. And the first group freaked out, of course,

they did. And crying, yelling, a lot of screaming going on. And we were kind of sitting up there.

And we got an elevator to do the next round. She said, I don't want to do anymore. And I said,

look, I'm like lugging a suitcase with this is when you would give them the packages. As you said,

you know, and Kleenex and all this stuff, because I knew this was going to happen. And I'm like,

we've already presented it to the medical board. We've already presented it to the leadership team.

This is a $9 million initiative here. So if you don't want to do it, like where are we going to

get the $9 million? Right? So again, it's just like those decisions at such, you know, really

important levels are just, you know, I feel like it's really unfortunate for those middle

managers because they're doing everything they can to help this company, help their customers.

And yet they're not being valued for that. And a lot of times they're just getting shut out the

door. I have something I really want to say here real quick, real quick. You were talking, you

asked a question of how do you avoid this thing? And it's actually, if you got so much better at

forecasting, you would. So what happened is in 21 and 22, we had it pumped what $1.2 trillion

dollars into our economy, right? Through these, through COVID checks, through all this pandemic

assistance. And we had this explosion in demand. I was looking at real retail sales this morning.

And you have this massive spike. And then ever since then, it came down and now it's been flat

for several years. If you go to the long-term growth line, you put a trend line on it,

the line where we're at right now is actually getting about to equilibrium again.

The problem is you thought these explosive years were real, but they're not real. These were

never real. What caused you to have this bloated time of expenditures? Well, it was this event.

Is that event going to stay? No, that event is going away. In fact, there'll probably be a

whiplash event to correct for that. But no, you hired for that event. If you want to prevent

laying off in the future, understand what your actual potential really is. And be realistic and

stop sitting there trying to appease people above you by going, I think it's 20%. No, it's flat.

Maybe it's 2%. But we have this tendency, I call it recency bias. You sit there and you go,

what you just did and you go, we're going to keep doing that. And like, now maybe what you just

did was because of something very specific, but you're so poor at understanding those things,

or you want to do a piece of somebody. So you gave them these larger projections. That's how you

get yourself into trouble. If you want to get yourself out of trouble, look at yourselves a lot

more coldly. Be realistic about who you really are as a company. Are you really that great?

Or were you in the right place at the right time? Is that right time going to go away?

So I want to talk about kind of the layoffs, right? Like, we talk about the trend. We're talking

about what do middle managers do. So what I'm seeing now, speaking to a lot of these middle

managers who are saying, hey, Chino, help me. What should I do? There's a role here. What are you

seeing in the marketplace? You know what's happening? Middle managers are not taking those leadership

positions anymore. They're saying, I want to stay and I see because we know this not swoop

for the Googles of the world, right? For the big, the oracles of the world. You have that on your

resume. Unfortunately, although you'll be a part of it, it's almost like, what is your risk appetite?

Right? It's almost like stocks. Like, are you going to risk it knowing that? You know what? In a year,

maybe two years, you'll probably be laid off. But is this, you know, asterisk on your resume?

Is this having Googles? Is that going to get you to the next step, likely? So it's about kind of

your appetite for risk is what we're seeing. And for those that don't have that risk appetite,

they're saying, you know what? Don't want to be a manager. I want to stay and I see and it's a

trend that I keep seeing. You're hit the nail on the mark. That's what I do, Ron. It's the data.

I sit there with leaders and I say, listen, look at your team. What makes sense? Who's making

money? There's like a nine box of, you know, your core players, you know, high performing,

low performing, and looking at how to kind of look at your entire team. And I get a lot of

leaders to do this exercise to say, what's working? Managers, again, these middle managers,

sometimes you think, oh, no, as we discuss, they're often the most senior, tenured expertise

in whatever department that they're in. And so letting that core person go actually allows that

the rest of that team to kind of run wild and lose. And again, you're keeping as we discussed

earlier, not your high high performers. You're creating your keeping your Lord performers.

And that isn't good for business because as we said, sure, you might make a decision to kind of

correct the quarter, the year. But guess what happens in two or three quarters for now?

That actually rebounds and you actually lose money because who's the sales, who's the marketing,

who's hiring the people to get to fill the gaps. And a lot of leaders are very short-sighted.

And so what I come in to do is to look at that. So what I would say to middle managers who

have that risk appetite and say, hey, Google, let's go on a quick little date. I mean,

you can think about it like that. You're just dating. We're not going to get married here.

It's going to be a few, a few, a couple months, maybe a year, maybe a little longer. But that's it.

I'm using you to go out there so I can go and work for a smaller company and then I can be

and I see who actually have value and have enough, have less numbers to actually see my impact.

So people are choosing that. Other people are saying, I don't want anything to do with it. I only

want to work in a small setting. And that's okay, too. And others are saying, I don't want any

part of the rat race. Like you said, Melissa, some people are saying, I want to go into trades.

I don't want to be a part of this. It's so much back and forth and it's become such a trend

to course correct by layoffs and I don't have that appetite. So it's interesting. And as a

middle manager, you need to figure out very quickly what your appetite is and then move accordingly.

Yeah, one of the things that I've seen and this is kind of in

possibly a fix. I don't know. Look at me.

It is this idea around one of the companies I worked at. You know, there were career ladders and

you would have like, you know, the way you would go from, you know, as you start here and then

you move up and you move up the leadership ladder. There's a management family. There's, you know,

an IC family and a, we would call it professional family, which kind of was weird professional

meaning tech. So like software engineers and things like that that you brought up around.

And one of the things that we really spent a lot of time doing and a lot of research on,

which I was very impressed by is like pulling those families together and putting the different

leveling, the compensation leveling and the rewards leveling and balancing that so that you

could see that an IC level six, for example, which is pretty high if it's a one through eight level

for ICs, was really equal to a director level in terms of leadership based on what value they were

bringing to the table in terms of what they were doing and based on all of the competency,

you know, you know, all those competency matrices and all of the KPIs and the metrics that they

were going to be required on. And then it allowed them to have a path to grow that wasn't about

being in the management family, right, as well as the professional family. So the, you know,

when you think about tech and engineers and software developers and product folks, they may not

want to be managing leading a team, right, they may just want to stay in their space. If they're

software engineer four, that's equal to a pretty high level senior manager. So I think that if

companies can start to do that, it allows them to feel like they're not saying no to their ambition

and their ability to grow as an individual, but as an employee, but they have that opportunity to

know what path can I and do I know and is there transparency? I know that I am being compensated

for that, right? And I know that if I really wanted, you know, X amount and yeah, I'm going to

have to go into leadership at some point and be become a senior VP, right? Like that would be

clear, but, you know, they may be very happy being IC level seven, because, you know, what they're

being compensated well, they're very, they feel like they're contributing, their outcomes are great,

and they have, you know, a great work life balance, whatever it might be. So I do think that's

a path. I mean, I think when I talked about recalibration and the values that people that managers

are bringing, I also want to think about the values that all the other team members are bringing

and that why middle management isn't necessarily the answer to all answers. And Ron, you brought it up,

like, if I want to make money, you know, and leadership is the only path, then I guess I have to do

that. Why doctors don't have many managers? Because I can make money my entire life being a doctor

and I can retire at 80, still being a doctor. And I was sick, why did they do that? Why weren't they

aspiring for management? Because they were well-rewarded for the job that they were doing, right?

Yeah, Melissa, you started us on our fix. Let's roll with it. We could probably talk about this for

our very long time, but well, let's just fix it. Well, we're going to do this. So if companies,

here, I got four blocks for us. So companies recognized the value of independent contributors

and place at least a parity, if not a premium on that, along with management, that's a good starting

point. If companies think longer range, and like Ronnie said, not just look at anomaly events and

call that the future trajectory of the company, like, call it what it is and say, well, there's a blip.

Let's put that into perspective. That's interesting. We're having a moment. This moment's not going to

be around forever. Think longer range and plan accordingly. And there's going to be market cycles. You're

going to hire. You're going to over hire. You're going to trim down some of the levels. We know that,

but, you know, be responsible when things happen on either sides of those swings. Don't just assume

that middle management is the problem. So if you're going to do, you know, a lateral cuts across

the company or you're looking for problem centers, don't just start from the middle because you're

creating instability and things can really fall apart quickly from there. And then if we think

bigger, maybe rethink the value system of the company and the premium, not that we place on

on management and climbing the ranks in that, but in that being the sign of recognition of

contribution to the company, but also status within the company. And, you know, we've talked

institutionally, you know, how do we not only create that parity and flexibility for the

independent contributors, but make that more of, you know, what you strive for in a company is

to be a powerhouse of one and make that more of an institutional model of what makes us company

successful. So that's four four things. I put a recipe together for us. If we follow our own

advice and we start rolling this out to companies and that starts to impact our labor market and our

economy, Melissa, do we fix the situation? This is a huge problem to fix. I think we got,

we took a bite out of it. I don't know that we actually fixed it, but I love this idea about

rescoping the management roles, rebuilding IC career ladders. I think it's really important to

really think about, I'm going to reach into Chino's world, you know, the cultural backlash,

you know, retention risk and all those types of things. And I think that we really need to

start building teams and companies with intention and thinking about the purpose and what the

expertise needs to come in to play to really help a company grow and be successful. I love what

Ron brought up about data, using data to help you, but also being careful about metric myopia in

terms of overcorrecting, which you you mentioned by over tracking. And we do that with individuals

and teams where we say, oh, this team isn't doing well. Just looking at metrics that may not

actually tell the full story of what's really going on. So I do think there's a lot there.

And I think there's one thing that we didn't even touch on, which we've touched on on a lot of

other episodes, but is AI and what that's doing to the economy of the company and the workforce

today. And, you know, hopefully people leaders not using that as an excuse to get rid of middle

management because we still need decision makers. We still need expertise. All right. Thanks,

Melissa Chino. Did we fix it? I think we took a bite of it. I think there's a little bit more work

to do on the fix for middle managers and the trend right now. I think if I were to give you any

tips, it's look at how to be an IC. If you're okay to date Google for a second so you can get

Google on your resume. Awesome. If you're not moved to IC, that is the trend. And I see that's

going to continue to happen if our companies. I think companies, you should never be overhiring.

As Ron said, data, data, data, data, there's never a moment that you should let a blip control the

narrative in your story. You are a business. You need to make a profit. There's no way you should

be overhiring for the blip. Be smart and be strategic and intentional with who you bring on. And with

that, who you also make leaders, not everybody's a great leader. As we know, Hussein goes,

people don't leave bad jobs. They leave bad managers and I'll leave it there. But I think we

kind of fixed it. Thanks, Chino. Ron, little bite, big bite. How did we do? If you would address one

part of this, I think you could address it would be a pretty big bite. And this goes back to what I

was saying. A really good company that's really sharp understands those external data points that

got them to where they are. How did we get successful? Is that market protected? Is there a

moat? Are we going to sustain that? Was this a blip? What caused that blip? If we could do those

things, then we would go, hey, I know you all want to hire right now. I know we're all working really

hard. But we're looking at this and seeing that we're not going to get passes. But a lot of companies

will look at this and go, yeah, but I got to squeeze every dollar out of this opportunity right now.

So I'm going to hire up for that. Well, then there's a whiplash effect. You're going to have to

lay off. And if you're comfortable, if you're a company that's really comfortable with that,

then it's not a problem for us to solve because you're saying, look, I'm going to squeeze out every

piece of juice when this market's doing well. And if that means I over hire, then fine. And then

the second this thing goes down, I'm going to let all these people go. You know, there's a human

told of that. And none of us are comfortable with that. I'm very uncomfortable with it. I'm a

very empathetic person. And I hate when somebody loses the job. It hurts. I've been there. And it hurts.

And I don't like to see those things, but welcome to capitalist. You know, this is what we've

signed up for. Every time you take a job, it's your job as a person is getting ready to work in that

company to see the viability of that company. Do they have a long runway? Are you going to have a

great career there? Or is this a company that's capitalizing on a moment and you're going to be

subject to that moment ending? And I think that we all bear responsibility for that. And I love what's

what's said earlier. Turn down that promotion opportunity. If you think it's going to put you in a

riskier position, oh, what I've can make more money. Well, understand you may not be making

any money if you get cut. Everybody plays a part of this. It's a good point. Thank you, Ron.

Well, that's going to bring our episode to a close. We are clocking out once again. Thank you,

Melissa. Thank you, Chino. Big thanks to our special guest, Ron Hettrick. Ron, tell everyone how we

can track what you're up to and keep up with you. Yeah, the best way of doing it is you follow me on

LinkedIn. It's Ron L. Hettrick can get my name from this. But if you look me up on LinkedIn,

you'll see I have a reputation for poking the hornet's nest as everybody likes to say. I like to

touch subjects that I think a lot of people feel are a little risky because I feel like I have the

data to explain those. And I could do it in a very apolitical way. I can do it in a way that I think

you need to know. I've lead author of demographic drought. Who's going to do the work? The rising

storm. I was a co-author on fault lines, which just came out from lightcast.io. Lightcast1word.io.

All these articles are basically research papers are free. You can catch me speaking all over the

country. Sometimes you'll see me on the news. Who does? I'm all over the place. Thanks, Ron. Yeah,

and definitely definitely everyone check out Ron's LinkedIn. There's a lot to dig in there.

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