Middle managers are the last mile of innovation. They serve as the glue of the organization and take care of translating "strategic vision" of the top management to operation and execution. Middle managers calm down the front line employees who find HQ mandates out of touch as not many C-suite managers descend from the MBA Strategy case situation to being the undercover boss. Thus, middle managers help adjust either strategy or operations to actually get things done.
The recession has done away with whole swathes of middle managers and the glue is weakened. Junior managers are in awe of top management while top management thinks that the organization is "flat" simply assuming that junior managers have now become middle managers- since the middle managers got fired anyway. This assumption does not work if the culture of the organization has not become "flat." What is happening today , as numerous executives tell me, everyone wants to merely save their jobs and no no one wants to call out reality checks.Adjusting either strategy or executions seems like a lot of work- anyway.
The upshot of all this is that the last mile of innovation is missing. Middle managers are gone- fortunately there are consultants who can come in briefly and help sort out the last mile of innovation to actually get it done!