The leadership layer we designed out

Flatter structures were meant to make organisations faster, sharper and more responsive. Instead, many have created a quieter form of complexity. Layers have been removed, but the work they carried has not disappeared. It has shifted, stretched and, in many cases, intensified for those left in the middle.

That pressure point is now where strategy meets reality.

Nithya Ramaswamy, solutions director, ANZ at LHH (pictured), argues that organisations have overlooked a critical consequence of flattening. “We are now seeing the flattening paradox,” she said. “We have flattened organisations, but not redesigned or redistributed the work, and it is the middle that is carrying the weight.”

At the centre of the issue is what Ramaswamy describes as the “translation layer”. This is where strategy is turned into action, where priorities are clarified, and where people are guided through change. The fewer layers an organisation has, the more critical this work becomes. Yet it is often the least defined, least supported and least deliberately built capability. Removing mid-level roles does not remove the work itself. It simply redistributes it. As organisations have stripped back management layers, the translation function has fragmented, widening the capability gap in the process.

“What frustrates me,” said Ramaswamy, “is that organisations continue to invest heavily in change plans, but far less in the leaders expected to make them work. Those leaders are left to navigate ambiguity and translate strategy for their teams, often without the support or processes to do it well.”

When the middle carries the weight

In practical terms, that fragmentation creates daily tension for mid-level leaders. They are expected to influence upward while creating clarity downward. They must balance empathy with accountability, protect their teams while maintaining standards, and challenge decisions while committing fully once direction is set.

“The role is no longer about choosing one side,” Ramaswamy explained. “It is about holding competing demands at the same time and doing it consistently. That requires a level of judgement and capability that most organisations have not explicitly built.”

At the same time, the scope of the role has expanded. Mid-level leaders are no longer only responsible for performance. They are now managing change, absorbing emotional load, and navigating workforce disruption, often without the systems or support to do it effectively.

The data reinforces the scale of the challenge. Across organisations, only 29% track time to fill roles, 25% track time to deploy talent and just 24% track internal fill rates. Meanwhile, 61% say they struggle to transition workers into new roles, and only around a third invest in the data needed for workforce skills planning.

“These are not marginal gaps,” said Ramaswamy. “They are fundamental enablers of how work gets done. When those basics are missing, the burden shifts directly onto leaders to figure it out in real time.”

That burden is compounded by behavioural barriers. Talent hoarding remains a persistent issue, with 28% of organisations citing leaders’ reluctance to let go of talent as a constraint on internal mobility. A further 27% point to weak career conversations between managers and employees.

“In many cases, leaders are being asked to move talent without visibility of skills, without clear pathways, and without the right incentives,” Ramaswamy says. “It creates friction at exactly the point where agility is supposed to exist.”

The human side of structural change

The impact is not just structural. It is deeply human.

Most organisations focus on managing change as an event, such as a restructure or system rollout. Far fewer invest in the process of transition, which is how people adapt to that change.

“Change is what happens to the organisation. Transition is what happens to the person,” Ramaswamy explained. “We consistently underestimate the second part.”

When transitions are poorly managed and organisations don’t have the data, systems or leadership alignment to redeploy talent effectively, the consequences are measurable. In our recent survey LHH HR leaders reported team instability (24%), reduced morale (22%) and loss of critical skills (21%). At the same time, 73% say rehiring is more expensive than redeploying existing talent, yet many still default to external hiring due to internal friction.

“This is why leadership capability is not a soft issue,” said Ramaswamy. “It has a direct impact on cost, performance and retention.”

The disconnect is also evident from the employee perspective. 78% of workers say they do not know what skills they need for future career growth, and 65% want to build new capabilities but lack direction.

“That uncertainty does not sit in isolation,” Ramaswamy noted. “It reflects a broader leadership gap in direction and priorities. If leaders cannot articulate where the organisation is going or what skills matter, employees cannot align to it.”

At the executive level, the same themes are emerging. A lack of clarity around strategic objectives and ineffective decision making are now cited as the biggest constraints on leadership effectiveness. One in four senior leaders say their own decision-making processes no longer support what the organisation needs.

Ramaswamy believes this is often misunderstood. “We tend to think about mid-level leadership in terms of roles,” she said. “But the real challenge sits in the tensions those leaders are required to hold. Competing priorities, incomplete information and constant trade-offs are the norm. Clarity does not disappear by accident. It breaks down when those tensions are not actively worked through.”

“If clarity is an issue at the top, it becomes even more pronounced in the middle,” she added. “That is where these competing demands converge, and where decisions have to be translated into action, often without the same level of context or support.”

Capability as the focus

Despite this, many organisations continue to treat the middle as a cost to be reduced rather than a capability to build.

Ramaswamy believes that needs to change. “The organisations that are getting this right are not trying to remove the complexity. They are investing in the leaders who have to navigate it.”

She points to three shifts that make a difference, starting with a clearer definition of what transition leadership actually involves. “At its core, this is both a head and heart capability,” Ramaswamy explained. “It is about creating clarity on direction and priorities, while also showing care and having the courage to lead people through uncertainty. Ultimately, it comes down to taking ownership and leading through, rather than stepping back.”

From there, she highlights three practical shifts. First, recognising transition leadership as a distinct capability rather than a subset of change management. It is about focusing on the human in transition, not the change process itself. Second, moving away from generic leadership programs towards more situational, role-specific support that equips leaders to handle real tensions in context. And third, improving visibility of skills, opportunities and career pathways so that talent can move more effectively in line with organisational needs.

“These are not large, abstract shifts,” she said. “They are practical changes that enable leaders to do their jobs properly. For example, instead of checking project timelines and milestones, check-in with the team member in transition through a micro conversation. This might mean asking, ‘How are you feeling about this? What does this mean for you?’,” she said.

Ultimately, the question is not whether organisations should be flat or hierarchical. It is whether they are building the capability required to operate in the structure they have created.

Flattening promised agility, but without the right leadership capability, it often delivers the opposite. Complexity becomes distributed, risk becomes concentrated, and the point where strategy meets execution becomes a bottleneck rather than a strength.

“The middle has not disappeared,” Ramaswamy said. “It has become more important than ever. They are not simply communicating change. They are responsible for making sense of the impact.”

Organisations that recognise that, and invest accordingly, will be better placed to turn strategy into results. Those that do not, risk leaving their most critical work under-supported, underdeveloped and ultimately unsustainable.

This article was produced in partnership with LHH