Aretail manager responsible for more than $80 million in annual revenue, an airline manager who oversees a yearly passenger volume worth more than $160 million, a banking manager who deals with upward of seven million questions from customers a year. These aren’t executives at a corporate headquarters; they are the hidden—yet crucial—managers of frontline employees.

Found in almost any company, such managers are particularly important in industries with distributed networks of sites and employees. These industries—for instance, infrastructure, travel and logistics, manufacturing, health care, and retailing (including food service and retail banking)—make up more than half of the global economy. Their district or area managers, store managers, site or plant managers, and line supervisors direct as much as two-thirds of the workforce and are responsible for the part of the company that typically defines the customer experience. Yet most of the time, these managers operate as cogs in a system, with limited flexibility in decision making and little room for creativity.

In a majority of the companies we’ve encountered, the frontline managers’ role is merely to oversee a limited number of direct reports, often in a “span breaking” capacity, relaying information from executives to workers.¹ Such managers keep an eye on things, enforce plans and policies, report operational results, and quickly escalate issues or problems. In other words, a frontline manager is meant to communicate decisions, not to make them; to ensure compliance with policies, not to use judgment or discretion (and certainly not to develop policies); and to oversee the implementation of improvements, not to contribute ideas or even implement improvements (workers do that).

This system makes companies less productive, less agile, and less profitable, our experience shows. Change is possible, however. At companies that have successfully empowered their frontline managers, the resulting flexibility and productivity generate strong financial returns. One convenience store retailer, for example, reduced hours worked by 19 to 25 percent while increasing sales by almost 10 percent. It achieved this result by halving the time store managers spent on administration; restructuring their work (and that of their employees) to focus on the areas most relevant to customers, such as the cleanliness of stores and upselling efforts at the cash register; and creating easy-to-understand performance metrics that managers now had enough time to coach employees on daily.

The key is a shift to frontline managers who have the time—and the ability—to address the unique circumstances of their specific stores, plants, or mines; to foresee trouble and stem it before it begins; and to encourage workers to seek out opportunities for self-improvement. In difficult economic times, making employees more productive is even more crucial than it is ordinarily.

The reality of the front line

To unlock a team’s abilities, a manager at any level must spend a significant amount of time on two activities: helping the team understand the company’s direction and its implications for team members and coaching for performance. Little of either occurs on the front line today. Across industries, frontline managers spend 30 to 60 percent of their time on administrative work and meetings, and 10 to 50 percent on nonmanagerial tasks (traveling, participating in training, taking breaks, conducting special projects, or undertaking direct customer service or sales themselves). They spend only 10 to 40 percent actually managing frontline employees by, for example, coaching them directly (Exhibit 1)

Even then, managers often aren’t truly coaching the front line. Our survey of retail district managers, for example, showed that much of the time they spend on frontline employees actually involved auditing for compliance with standards or solving immediate problems (Exhibit 2). At some companies we surveyed, district managers devote just 4 to 10 percent of their time—as little as 10 minutes a day—to coaching teams. To put the point another way, a district manager in retailing may spend as little as one hour a month developing people in the more junior but critical role of store manager.

In our experience, neither companies nor their frontline managers typically expect more. One area manager at a specialty retailer with thousands of outlets said, “Coaching? A good store manager should just know what to do—that’s what we hire them for.” A store manager in a global convenience retailer told us, “There are just good stores and bad stores—there’s very little we can do to change that.” Another store manager, in a North American electronics retailer, said, “They told me, ‘We don’t pay you to think; we pay you to execute.’”

These shortcomings are rooted in the early days of the industrial revolution, when manufacturing work was broken down into highly specialized, repetitive, and easily observed tasks. No one worker created a whole shoe, for example; each hammered his nail in the same spot and the same way every time, maximizing effectiveness and efficiency. Employees didn’t necessarily know anything about the overall job in which they participated, so supervisors (usually people good at the work itself) were employed to enforce detailed standards and policies—essentially, serving as span breakers between workers and policy makers. Many manufacturing companies still use this approach, because it can deliver high-quality results on the front line, at least in the short term. In many service industries, the same approach has taken hold in order to provide all customers in all locations with a consistent experience.

Although attention to execution is important, an exclusive focus on it can have insidious long-term effects. Such a preoccupation leaves no time for efforts to deal with new demands (say, higher production or quality), let alone for looking at the big picture. The result is a working environment with little flexibility, little encouragement to make improvements, and an increased risk of low morale among both workers and their managers—all at high cost to companies.

The effects of poor frontline management may be particularly damaging at service companies, where researchers have consistently detected a causal relationship between the attitudes and behavior of customer-facing employees, on the one hand, and the customers’ perceptions of service quality, on the other. In service industries, research has found that three factors drive performance: the work climate; the ways teams act together and things are done; and the engagement, commitment, and satisfaction of employees. Leadership—in particular, the quality of supervision and the nature of the relationships between supervisors and their teams—is crucial to performance in each of these areas.² Clearly, the typical work patterns and attitudes of frontline managers are not conducive to good results.

At a North American medical-products distributor, for example, one supervisor reflected that the company “is like California—forest fires breaking out everywhere and no plan to stop them. A lot of crisis-to-crisis situations with no plan. We’ve been in this mode for so long, we don’t know how to stop and plan, although that’s what we desperately need to do. I wish I knew how to intervene.” Because frontline managers were so busy jumping in to solve problems, they had no time to step back and look at longer-term performance trends or to identify—and try to head off—emerging performance issues. It’s therefore no wonder that the company’s performance had begun to decline: inventories were increasing and errors in shipments became more frequent. Companies can also get into frontline trouble if they fail to maintain well-managed operations (see sidebar, “The danger of complacency”).