Smaller orgs should be mostly flat. When I see 20 person companies with too many "directors" and "managers", it's a bad sign. Too many bosses, not enough workers.
The smaller the org, the more you want someone that actually understands the work being managed. Maybe your team is getting work done fast, but it's not done right: no documentation, few tests, architectural flaws, performance issues, security problems... Someone should be able to understand the trade off made, and be able to explain them. When one of your engineers gives you an estimate, you need to understand if it's reasonable. Is it too optimistic? Is he blowing smoke up your ass and spending 2 months on a 2 week job? Poor management sets arbitrary deadlines and wonders why they aren't met.
The smaller the org, the more you want someone that actually understands the work being managed. Maybe your team is getting work done fast, but it's not done right: no documentation, few tests, architectural flaws, performance issues, security problems... Someone should be able to understand the trade off made, and be able to explain them. When one of your engineers gives you an estimate, you need to understand if it's reasonable. Is it too optimistic? Is he blowing smoke up your ass and spending 2 months on a 2 week job? Poor management sets arbitrary deadlines and wonders why they aren't met.