What if the first level managers actually acted like an Extreme Team, instead of like courtiers cutting each others' throats for the attention of the SunKing? Together they would have stories, planning, pairing, refactoring (reorganization). If asked for help, they would have to say yes. They would set their own estimates. They would communicate directly with the customers' first level managers.
Might work, couldn't hurt, worth a try.
From Extreme Management:
In Tom De Marco's talk at Xp Immersion Three (Toms Talk At Xp Immersion Three), he spoke of Management Team's and the fact that there aren't many. Lowell Lindstrom suggested that such a thing might be just the way to scale XP up. I'll see about drawing a picture and posting it. --Ron Jeffries
LeadersAndTeamwork
Rob Harwood make the last update of this page in 2001. He might be interested in a 2005 book "The Driving Force.." (ISBN: 0975263803), seeking a solution to get teamwork out of Alpha Male/Females.
Some details at www.emediawire.com 
Any other resources on related/relevant material?
See original on c2.com