Access the printable exclusive and our full White Paper below.

Printable version of exclusive here

IADS White Paper - Middle Managers

Since its inception in 1928, the IADS’ purpose has been to coordinate information between department stores worldwide and research their activities to help them address the many challenges they must face. This translates into many responsibilities carried out by the IADS, all solely intended to provide insights to its members and help them have a broader understanding of the shifting business environment.

Every year since 2020, the IADS has produced a White Paper on a specific topic perceived as important for its members. In 2020, the purpose was to collect the learnings from the pandemic and how to make sure department stores would be prepared for the next crisis. The 2021 White Paper was dedicated to digital transformation and its impact on the organisation. In 2022, it was all about the development of sustainability, CSR and ESG in retail businesses. The 2023 edition was dedicated to retail media.

In 2024, the White Paper was dedicated to middle management. The IADS believes that middle managers’ distinct blend of operational knowledge, leadership, and adaptability enables them to deal with retail challenges, but also address transformation and foster innovation. In an era of automation and AI, middle managers have strategic importance as they are pivotal in integrating new technologies, redesigning roles, and ensuring that human judgment and creativity complement technological advancements.

Introduction: middle managers, the overlooked pillars of retail

Middle managers in retail are often seen as cogs in a machine, tasked with implementing corporate directives while ensuring day-to-day operations run smoothly. As “managers of managers”, they have served as connectors between the C-suite and frontline teams, ensuring operational efficiency. Yet this perception fails to capture the depth of their responsibilities. They are not merely intermediaries but strategists, problem-solvers, and motivators who directly influence employee engagement, customer satisfaction, and financial performance.

However, decades of centralisation, cost-cutting, and technological advances have diminished their roles. Once seen as essential to a company’s heartbeat, middle managers were sidelined and perceived as bureaucratic overhead. In reality, middle managers are expected to juggle competing priorities from facilitating operations to managing teams and monitoring performance, productivity and financial effectiveness. They have dual accountability to both corporate leadership and frontline teams, making their role uniquely challenging and impactful.

As retail evolves into an omnichannel ecosystem where agility and innovation are paramount, the role of middle management continues to be questioned. The IADS believes their role will be increasingly critical in driving innovation, including AI, and organisations should equip them with the tools and authority they need to succeed. Finally, in the wake of the AI revolution, middle managers are best positioned to re-bundle roles, theirs and their teams.

The multifaceted role of middle managers in retail

Middle management scope is a mix of strategic and tactical responsibilities. As explained in the IADS white paper, middle managers wear many hats, making their role one of the most dynamic and demanding in the retail industry. Also, their duties are sometimes unclear: while they have clear objectives, it is up to them to decide the best way to achieve them. Their responsibilities can be broadly categorised into four key areas:

• Facilitating operations: at its core, middle management is about turning strategy into action. They facilitate any needed changes in an organisation and create an effective working environment for day-to-day operations.
• Monitoring performance, productivity and financial effectiveness: they monitor their department's performance and are responsible for reporting to the management above them. They build action plans to improve results or fix issues.
• Communicating: perhaps the most overlooked aspect of middle management is its role as a communication bridge. Middle managers translate high-level corporate strategies into actionable plans for frontline staff while simultaneously relaying feedback from the ground up. This two-way communication ensures alignment between strategic goals and operational realities.
• Managing teams: one of the most essential functions of a middle manager is recruiting, motivating, leading and inspiring their team. These tasks require emotional intelligence as much as technical skills. A McKinsey survey cited in the white paper found that 75% of respondents identified their boss as the most stressful aspect of their job. After all, employees leave managers, not companies. Conversely, supportive middle managers foster trust, psychological safety, and motivation among their teams. As a result, middle managers significantly influence employee satisfaction, directly impacting performance and productivity.

Another key aspect of the middle manager's role is that they rely on the contributions of their line managers and collaborate with other departments to achieve results, which means they depend on the results of others and not only on their direct contribution. Even if they tend to have a team of support personnel and a network of HQ contacts to help them do the job, they must be extremely good at relationships, communication and interaction with others. Middle managers must identify, understand, and harness their networks to drive performance and achieve goals. They become influencers.

Middle management empowerment and appreciation work hand in hand

Middle management is 80% leadership, and 20% is management. As leadership is crucial, organisations must empower middle management to unlock their full potential. To that end, companies should invest in leadership development by providing targeted training programmes to build skills such as conflict resolution, data-driven decision-making and change management. Organisations can also empower middle managers’ decision-making by granting them greater autonomy that can foster a higher sense of ownership.

Empowering middle managers means providing them with resources and granting them the authority and means to implement significant changes. The IADS believes empowering middle managers in retail can deliver tangible benefits for organisations, from better management capabilities to enhanced decision-making skills and higher staff engagement. Also, empowerment can lead to a culture of continuous improvement, as autonomy helps middle managers make decisions, implement changes and develop a unique sense of identity and belonging.

Retaining good middle managers is more difficult than for senior managers. As a result, the achievements of middle managers should be recognised to boost morale and retention. In that perspective, promotion is not always an adequate solution, and it does not mean taking a step higher on the company ladder. There are other options to recognise middle managers' performance:

• Compensation remains a way to acknowledge performance and promote middle managers. C-suite executives traditionally have a higher salary than middle managers. Sometimes, giving a middle manager the same compensation as a C-suite member can show how much the company cares.
• Giving stock and stock options is an interesting option for listed companies.
• A bigger sphere: rather than promoting middle managers to a higher position or the C-suite, they can expand their scope without changing the essentials of their jobs.
• Title changes can acknowledge a new level of seniority mirrored with increased responsibility and rewards.
• Challenging assignments to test new ideas about how to make things better.
• Autonomy and flexible work arrangements.
• Involve middle managers in the company strategy, and important decisions can help them feel valued, trusted and empowered, which can, in turn, improve the quality of the decisions made.
• Include them in a project outside their daily routine: a top head buyer could be involved and valuable in a warehousing project, for example.

Finally, mentoring middle managers is often an untapped practice for empowerment. As businesses navigate complexities, the IADS white paper explains how mentoring fosters a culture of continuous improvement by allowing discussion of challenges, sharing successes, and seeking guidance. It is also a way for middle managers to refine their communication skills, ensuring clear directives, constructive feedback, and optimised team collaboration. Also, mentoring provides insights into the company’s vision, mission, and strategies, empowering and guiding middle managers to make decisions that contribute to overall success.

There are many forms of mentoring, from traditional one-on-one to reverse or group mentoring. However, peer mentoring is a powerful and effective support system that truly harnesses the power of relationships. By building valuable relationships among peers, managers can share real-time challenges with colleagues in a safe space, allowing for mutual advice and feedback. Peer mentoring provides honest coaching on improving systems, processes, and people management.

Re-bundling roles: middle managers' impact on innovation and transformation

The rebundling of middle management roles through AI integration represents a paradigm shift for retail. This transformation is not about replacing their roles but amplifying their potential. The IADS believes middle managers’ roles can be redefined to ensure they can focus on their core responsibilities by reducing the amount of administrative work and low-added-value tasks and transitioning from task executioners to strategic leaders who drive innovation. By automating routine tasks and providing actionable insights, AI not only improves operational efficiency but also elevates the role of middle management into a pivotal force for business success.

With the AI revolution, middle managers should be seen as innovators. As automation and AI redefine the workplace, middle managers bridge technology and human employees by facilitating technology adoption. While AI can handle administrative tasks, the human judgment, empathy, and creativity that middle managers bring remain irreplaceable. This re-bundling of tasks will allow middle managers to focus on what they do best: connecting people, solving problems, and driving innovation. The very nature of their dual tactic and strategic role will allow them to understand the areas where AI will make a difference and how to reshape their team's role. Their experience in change management will make them perfect guides for teams to accept and use AI tools.

Generative AI can improve middle managers' managing capabilities. Emerging tools show a promising future, be it personalised training and capability-building programmes, recommendations based on individual needs and preferences or creating immersive role-playing scenarios. Generative AI could also boost a manager’s capabilities as a career counsellor, as AI-powered talent platforms could provide a broader range of potential career paths and the specific job experience and training needed to achieve them. Also, AI can optimise team performance by identifying team strengths and areas for development. Generative AI will also help middle managers better monitor performance as AI tools can automate the creation of reports and dashboards, freeing middle and frontline managers alike from data compilation and giving them the necessary time for analysis, more meaningful reports and relevant action plans allowed by refined data.

Conclusion: a call to action for retail leaders

Middle managers occupy a critical yet often underappreciated role. They are the glue that binds corporate strategy to frontline execution, ensuring that ambitious visions translate into tangible results. Middle managers are no longer just implementors or "managers of managers." They are connectors, innovators and change agents, essential for navigating the complexities of today’s retail. Their in-house relationship networks and ability to adapt to changing circumstances and drive operational efficiency will be critical to ensuring the organisation’s sustainability and growth.

While it is financially unrealistic to expect CEOs to grow the middle managers’ layer, they can recognise their importance. This can be done through various benefits and perks and even by offering the best middle managers a seat at the strategy table. It is also a matter of simple recognition: exchanging with them, walking around, asking questions, and having lunch with them are all measures to show gratitude and how they care.

Also, by investing in this pivotal layer of leadership, department stores can unlock new performance levels, agility, and innovation. Good middle managers are retail’s “unicorns”, rare, valuable, and vital to the industry’s future. It’s time to recognise their potential and empower them to lead the way.

The IADS believes retailers can transform middle management from a bottleneck into a competitive advantage by investing in leadership development, fostering open communication, granting autonomy, and leveraging technology to help redefine roles. In doing so, they enhance organisational agility and create a more engaged workforce. Middle managers may not always be in the spotlight, but they are undoubtedly the unsung heroes shaping innovation and excellence. For retail executives, the challenge is clear: rethink how middle management is perceived, supported and empowered.

Credits: IADS (Christine Montard)