These days, middle managers are often considered...

These days, middle managers are often considered corporate bureaucrats who fill wasteful positions that pull a company down and add red ink to a bottom line. Yet these employees don’t need to see their jobs lost during a restructuring. With foresight, managers caught in the middle can take steps to save their jobs, or even improve their lot. Lou Adler, a Tustin-based management consultant, spoke recently to Times correspondent Ted Johnson, about what the savvy corporate managers of the future should know.

Many companies have been eliminating levels of middle management. What will happen to these workers?

I think there is a role for middle managers. . . . (based on their) ability to adapt and implement change. It’s going to be how you take the scarce resources you have and apply them in an optimum manner. Most middle managers today are reluctant to change the way things are going. The middle manager who handled 50 people to do accounts payable, (the number of those types of managers) has shrunk dramatically. They automated the process, digitized the job. But the manager is still a key component. He’s the guy that says “Hey, redo this process.”

If you are a middle manager, what should you do?

I would ask them, “How have you changed the function of your job in the last year?” I would then say, “Multiply that by five, because that’s the way it’s going to change in the next five years.” It’s got to be something that will reduce costs, not 2% or 3% a year, but more like 15% a year, or it’s got to be complete upheaval.

Why is it so hard for aerospace companies to change?

At an aerospace company, the primary emphasis is on technology-based products. You have to be technically competent, and you have to invest a lot of capital. Once you got your business, it’s done. You’ve already made the money. The aerospace companies, with existing management, are going to have a difficult time, because they grew up with the mentality where they knew their customers--the government.

What are aerospace companies evolving into?

I have one client that had always been aerospace and had also been making high-technology computer cases for advanced supercomputers. They recognized their emphasis had to be in the industrial products arena. But it’s still a difficult situation. They are not geared to business development, how to really structure business externally. It’s not going to be an easy transition. Rockwell has done a pretty decent job of restructuring its organization. But you take Rockwell in 1971. It made the first anti-skid brake device for trucks. They didn’t know how to market it, and they got out of the business. They missed the market opportunity. That’s not to say they are missing other opportunities, because now they are more creative.

What expertise will managers need to have?

I’ve got a client right now who is manufacturing medical furniture. They really should get someone who is willing and capable of manufacturing it. But the president wants control of manufacturing. The truth is (the company) should let it be done elsewhere. The virtual manager has the ability to recognize, ‘Where can I get the resources, where can I get this job done, through the best talent available?’ The manager has to be geared to think not in terms of, ‘This is my box, this is my pyramid,’ but to be real fluid. Virtual means you create it in your mind with networks of people, systems and communication devices.

Why is this the trend now?

We’re so much more competitive in the world environment. Everything has to be done faster. If you think you have to do it with your own resources, you are eliminating so many tremendously talented organizations and people. That’s why the trend is, ‘Hey, we can get there a lot faster, but we don’t always have to do it by ourselves.’ You don’t always have to build a plant. Let them do it.

In the 1980s, companies considered incorporating Japanese-style management. Now that thinking has died off. What happened?

The Japanese, when all is said and done, really brought a level of quality and commitment. Their advantage is quality and low cost, but the country is a bureaucracy. Nothing gets done very quickly. We have very quickly reached the levels of quality the Japanese have. Why have there been so many top-level shake ups at America’s biggest companies?

You have all these old bureaucracies formed after World War II and now the world has kind of changed. We’re pre-programmed. It used to be that if you started out as a systems engineer at IBM, got promoted, you get this, you get this, then you run the company. You only see this one world. Now they brought in Louis Gerstner from American Express, and Nabisco. He doesn’t know anything about (IBM). But his fundamental (strength) is he is going to bring a new management perspective into a technology arena. What companies in Orange County are in the process of turning things around?

You must have a quick connection to the marketplace. Look at a company like Taco Bell. They hit some real pitfalls in the mid-80s and managed to come out of it. Allergan was going through lethargy about two or three years ago. Now they are starting to come up with new products and new capabilities. But look at FileNet. It had a tremendous technology for the ‘paperless office,’ but they used the big mainframe platform to deliver it. The platform moved to PCs, and what was a $200,000 system became a $10,000 system, and they’ve invested millions of dollars. I don’t think anyone recognized the PC trend 10 years ago. But the rate of technology is changing so fast, that if you invest a lot of capital in something that could change five years from now, you’re going to be in trouble.