Researchers and practitioners have mixed opinions to what extent middle managers (MMs) can help or hinder the implementation of their top management’s agenda. Could it be that MMs in Small and Medium Enterprises (SMEs) can play a significant role when it comes to the strategy implementation? Especially if the strategy is product ambidexterity, i.e., the ability to combine explorative and exploitative capabilities? That is the question we took upon ourselves to answer in our new research paper published in the Journal of Management Studies.

To answer this question, we collected survey data of German manufacturing SMEs in two waves with a three-year time lag. Our results clearly highlight the crucial role of MMs’ dynamic managerial capabilities when it comes to success through ambidexterity.

The issue: Product ambidexterity is a particular challenge for SMEs

Exploration and exploitation are, due to their paradoxical nature, best structurally separated. However, SMEs are often not large enough for such structural separation, which is why ambidexterity is typically – if it exists – practiced within one single function. This bears a special challenge that renders the MMs’ role more important than one might think. What can help to promote product ambidexterity in this specific set-up?

Taking a closer look: Middle managers can exhibit three types of dynamic managerial capabilities

Dynamic managerial capabilities (DMCs) reflect managers’ ability to sense and seize opportunities, and to reconfigure assets accordingly. We know that top managers’ DMCs are crucial for the strategic renewal of firms. However, it is less clear which role middle managers’ DMCs play. Especially since MMs are supposed to apply the strategic agenda to daily operations, understanding their role and inner workings can be key to the implementation of a company’s strategy. Their DMCs are underpinned by (1) managerial human capital – which entails education and firm tenure, (2) managerial social capital – which entails managerial ties, trust, and solidarity, and (3) managerial cognition – which entails alertness. But are the middle manager’s DMCs really related to product ambidexterity?

Tying the knot: Yes, MMs’ dynamic capabilities play a crucial role in product ambidexterity

We found that MMs’ general human capital (education), structural social capital (managerial ties) and relational social capital (trust) are all positively associated with product ambidexterity. But we also find, against expectations, that cognitive social capital (solidarity) is negatively related with product ambidexterity.

And what does this mean? Our key take-aways on how to leverage the MMs’ power

These findings result in at least three key takeaways useful for managers and of all kinds.

First, see the MMs’ role for what it really is: Our results demonstrate that middle management has a significant impact on their functions’ success in product ambidexterity. Consequently, MMs should not be perceived as reluctant sources of inertia but as active implementers of the strategic agenda.

Second, hire for the right type if product ambidexterity is what you are striving for: Our study suggests that MMs with specialized education and strong structural and relational social capital stimulate their functions in such a way as to enhance product ambidexterity. Hiring such MMs for output-oriented functions seems desirable when a firm needs to foster product ambidexterity.

Third, if you are a MM, ask yourself if you act freely or if you are somewhat limited by your solidarity: The cognitive social capital of MMs should be carefully considered. Since solidarity was negatively related to product ambidexterity, practicing MMs should critically reflect whether their solidarity within their business network may diminish their sensing, seizing, and reconfiguring capabilities.

Ultimately, this research shows that the concept of dynamic managerial capabilities just as well applies to middle management and that we should not underestimate them when it comes to functional product ambidexterity.