How middle managers help companies to change strategy

Organisational change is often vital to ensure a company remains relevant and resilient in an evolving market.

However, it can be challenging to accept, causing anguish for leaders and employees alike.

Understanding what happens when a change strategy creates conflict among leaders in the workplace can help inspire confidence that the company will reach a resolution.

Together with my colleagues Masahiro Kotasaka, of the University of Oxford, and Alfredo De Massis, of International Institute for Management Development (IMD), I explored the case of a long-lived Japanese family firm Funabashiya and the conflicting visions of tradition and change that arose when the CEO’s son took leadership responsibilities.

The firm previously used traditional craft production methods, but the son pushed for change to diversify and standardise its production methods through new processes, technology, and products. His father resisted.

We discovered that middle managers could play a pivotal role in resolving the conflict.

Over time, they adopted different sets of temporal strategies  – allowing both those with strong attachments to tradition as well as those who were more future-oriented to change their minds.

As a consequence, the company was able to make the best use of the past while adopting new innovations, pushing it into a more sustainable position.

Funabashiya is a traditional family firm with a 200-year history. Its main product is arrowroot cake, which has not changed in production since the firm was founded.

As one employee said: "We did not know exactly how we mixed the three types of starch". The employees saw what they were doing as a craft.

Why staff and leaders resist change

The company's strong attachment to tradition prevented it from adapting to new technologies and processes.

When the eighth generation successor joined the firm as a leader alongside his father, he started streamlining some processes, leading to cost savings.

Following these successes, he wanted to standardise production and create new product lines. He believed those who tried to hang on to the past should leave.

His strong stance towards the loyal employees who could not agree with the changes he introduced upset his father. There was a rift between father and son, with the father more inclined towards defending tradition and the son, pressing for innovation.

However, over time, initiatives from middle management dissipated these tensions, allowing for respect for the past and its 'custodians' while embracing new techniques, innovations, and product lines.

What happened among middle managers that enabled them to negotiate this transition without consensus among the leadership?

Middle managers initially resisted the modernisation plans. However, they gradually embraced the new strategy, seeing it as preserving the best of the past through new production methods.

Manager roles: custodians vs prospectors

Initially, there was a conflict between ‘custodians’ – managers who wanted to hang onto traditional ways of doing things – and ‘prospectors’ – managers who embraced change.

It appeared that there was no way of resolving this conflict. However, perspectives shifted over time. We observed three stages through which the company gradually orientated to change while holding onto its heart.  

Firstly, while many custodians left the firm, others gradually changed their minds and became prospectors. They realised that to protect the past, they needed to adapt to the future to make the business more resilient.

We called this ‘temporal mobility’, meaning that staff could adopt a more fluid idea of tradition and change.

Secondly, the newly converted prospectors decided to create a more cheerful atmosphere in the firm, using their ability to shift positions and understand the new strategy to persuade others.

They became, in the words of one, a "middleman trying to bridge the gap" between the polarising view of the two generations of family leaders. We saw this as 'temporal socialisation' – in other words, change that occurred through relationships.

Thirdly, there was a gradual understanding that the new strategy was about protecting the past, leading to a more universal acceptance of the changes.

The custodians saw that the new standardisation could better protect quality and tradition than relying on intuition to get the right mix for the sweets.

We referred to this as 'coalescing the past'. This process of change continued over a 20-year period.

How new recruits energise organisational change

In later years, a new group arrived, which we called ‘energisers’. These were new recruits who created further reconciliation between the custodians and prospectors and between the past and future.

They joined the firm because they were drawn by “the long history and tradition” (store employee) and also “the atmosphere that resembles an IT start-up” (store manager).

They voluntarily joined projects with custodians alongside their on-the-job training with prospectors.

In this way, they showed respect towards custodians, which reassured them while helping them see the future through the new generation. The energisers also brought in new ideas, reinvigorating prospectors.

The father and son leadership team gradually reconciled because of these middle-manager behaviours.

What lessons can leaders learn from our case study?

1 Organisational change takes time

Time, or more specifically temporal orientations, is intrinsic to human experience and, therefore, to organisations. Some individuals favour tradition, while others are geared towards innovation. Each has a role to play in an organisation.

Understanding orientations towards time can help leaders navigate organisational transformation by classifying employee responses as less about resistance and more about their well-intentioned attachment to the past or the future.

2 Harness the past to embrace the future

Our case concerned a firm in Japan, where business is culturally embedded in history and communities, and heritage is more existential than simply branding.

However, this concept can be applied to other contexts, such as the French and Italian fashion industry, heritage tourism, pubs in the UK, and farming in different countries.

Our research has broader applications outside the heritage industries. Consider, for example, a long-standing leader who feels the way they’ve always done things is the right way but is then confronted with a new strategy.

Companies and organisations should see socially constructed reality from a temporal lens and consider how they strategically use the past and know what is good about it as they march to the future.

3 Middle managers can become mediators

Middle management can play a pivotal role in mediating change as they move between temporal attachments, particularly when there is conflict at the top.

However, our case study showed the importance of a new generation in helping to reconcile tradition with change.

It shows that organisational transformation is managed across the organisation, not just within the leadership. Our case illustrates what happens when the space for that renegotiation is made because of the conflict among executives.

Organisational transformation can be difficult when there is disagreement at the top. However, by understanding how middle managers reframe orientations to time, we hope to show that the strategy can ultimately succeed.

Further reading:

Back to the future: Strategy lessons from the 1990s

Three steps for firms to achieve strategic agility

Why imitating innovation can be a successful strategy

Middle managers and strategic use of the past

Innan Sasaki is Professor of Organisation Studies at Warwick Business School. She teaches Leading and Harnessing Diversity on the Full-Time MBA, Executive MBA, and Global Online MBA (London). She also lectures on Organisational Behaviour on the Global Online MBA and Executive MBA (London).

Learn more about Leading People Through Change and Disruption with a four-day Executive Education programme at WBS London at The Shard.

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