At the beginning of this article we noted that middle managers in hierarchical organizations have been seen as the implementers of top management strategies. Thus, as organizations have been reengineered around horizontal processes, it is not surprising that the perceived need for middle managers has diminished. Unfortunately, the dominant, operational stereotype of middle managers has led to the diminution of their strategic contributions. Conversations with top and middle level managers reveal that the strategic roles we describe are misunderstood, considered secondary, almost always non-sanctioned, and often discouraged. Yet, reengineering’s emphasis on responsiveness, flexibility, and speed puts a premium on the middle manager behavior associated with development of new capabilities. In this section we first illustrate how organizations unwittingly discourage strategic behaviors. The paper closes, then, with a set of guidelines for senior managers who want to encourage effective behaviors in the reengineered organization.

Nurturing Core Capabilities. The behavior associated with facilitating adaptability is often seen as risky and somewhat subversive. In his study of resource allocation, Joseph Bower describes how middle managers diverted resources and hid experimental programs from top management scrutiny in order to gain experience and acquire new capabilities. Not surprisingly, our interviews suggest that some top managers often view this role cynically. One CEO commented, "Oh, they've all got their own pet projects, I guess that's part of the price you pay." In part, this view results from the fact that the learning gained from experimentation usually manifests itself much later, and it may be difficult for managers to justify expending today’s resources on unknown, future benefits.