McKinsey have been poking around on cost for years why has the T5 layer of managers not been removed. In my experience they largely work from home, demand lots of travel and are blockers to true change viewi g everything through their personal lens.
At many large enterprises like SAP, having a highly concentrated, top-heavy layer of senior executives (like the T5 band) can become a major drag on agility. While senior leadership is necessary for governance, an over-reliance on a massive executive tier often does more harm than good.
Here are some other reasons why a heavy executive management layer can be a bad idea, a waste of resources, and a massive blocker to organizational change:
- The "Telephone Game" of Communication
When strategic goals have to travel down from the board through T5 executives, T4 directors, and T3 managers before reaching the people doing the actual work, the original message gets distorted. Key details are lost in translation, and the boots on the ground often end up executing something entirely different from what was intended. - Decision Paralysis and Over-Analysis
With too many high-level leaders wanting to leave their mark, decisions require endless rounds of reviews, steering committees, and alignments. Simple choices that should take days get dragged out for months because too many executives need to "sign off" or feel included. - High Compensation, Low Direct Output
Executive-level talent commands premium salaries, stock options, and bonuses. When a company carries a bloated executive tier, a massive portion of the budget is spent on individuals who manage and coordinate, rather than those who build, sell, or support the actual product. This is a highly inefficient allocation of capital. - Preservation of the Status Quo
Executives at this level have often spent decades navigating the corporate political landscape to achieve their status. Because their success is tied to the existing system, they are naturally incentivized to protect it. Truly disruptive change threatens their established domains, making them quiet saboteurs of radical innovation. - Silo Creation and Empire Building
To justify their premium titles and budgets, senior managers often focus on expanding their "empires"—hiring more people under them and fiercely guarding their departmental boundaries. This breeds internal competition and political infighting rather than cross-functional collaboration. - Detachment from the Customer and Technology
The higher up a leader goes, the further they get from the actual product and the day-to-day frustrations of the customer. Decisions are often made based on polished PowerPoint decks and sanitized reports rather than the raw, messy reality of the market. - Death by PowerPoint (The "Tax" on Middle Management)
To keep senior executives informed, middle managers and individual contributors must spend countless hours preparing status updates, dashboards, and presentations. This "reporting tax" drains valuable time and energy that should be spent on actual execution. - Dilution of Accountability
When a project involves multiple senior stakeholders, responsibility becomes diffused. If a major initiative fails, the layered structure makes it incredibly easy to point fingers, meaning no single executive is held accountable, and the organization fails to learn from its mistakes. - Suffocation of Grassroots Innovation
Great ideas in tech usually bubble up from the engineers, designers, and customer-facing staff. When there is a thick layer of top-down management, these ideas struggle to get noticed. If an idea doesn't align with an executive's personal roadmap, it is often ki-led before it can even be trialed. - Heavy Friction for Agile Pivots
In a fast-moving market, companies need to pivot quickly. A massive executive layer acts like a heavy anchor. Reorganizing, shifting budgets, or changing product direction requires untangling a complex web of executive egos, personal OKRs, and political alliances, making rapid adaptation nearly impossible.