Middle management was already a tough gig. Then generative AI (gen AI) entered the fray. A year after the publication of their book Power to the Middle: Why Managers Hold the Keys to the Future of Work (Harvard Business Review Press, July 2023), McKinsey partners Bryan Hancock and Emily Field join global editorial director Lucia Rahilly to revisit whether and why middle managers matter, what leaders could do differently to make more of the managers on their team, and how gen AI could change middle managers’ jobs—for the better.
This episode of McKinsey Talks Talent has been edited for clarity and length.
Do managers still matter?
Lucia Rahilly: One year has passed since Power to the Middle: Why Managers Hold the Keys to the Future of Work was published. Remind us of the book’s premise.
Emily Field: In two words, managers matter. They hold the keys to the future of work.
Bryan Hancock: And yet we haven’t set them up for success. When you ask managers how they spend their time, over half is administrative or individual-contributor work, things that aren’t managerial. And when you look at who’s the most burned out, it’s managers.
Lucia Rahilly: Middle managers once had stature in an organization. They seemed to matter; they had purpose. What changed?
Emily Field: Being a manager has never been easy, and it’s more complex now than ever before. Part of that came from the rise of email and the ability for a CEO to rapidly communicate to all employees, and from managers asking, “What does that mean for me?”
In the ’90s, there was the question, “What do we need middle managers for?” What we know is that managers are absolutely critical. They are the translators. They are the connectors. They are the navigators and the coaches.
Their role has become more complicated. Managers were frustrated in the ’60s and ’70s. Managers are still frustrated now. Forty-four percent cite organizational bureaucracy as getting in the way of being able to do their work. And then you layer on the pandemic, the Great Resignation, quiet quitting, social injustice, well-being and burnout, generative AI and technology advancements, and financial and economic pressures.
Enter gen AI
Lucia Rahilly: In the time since you published this book, gen AI has really taken hold as a seismically disruptive force in the business world. And we have seen relentless cost pressure on organizations, and pressure on middle managers in particular.
Bryan Hancock: When it comes to generative AI, I think we’re still in the very early stages. We are starting to recognize the various use cases that gen AI enables.
I was recently in conversation with Stanford professor Erik Brynjolfsson. He thinks of generative AI as a general-purpose technology—like the internet, like electricity—and said, “If you think about the early use cases of electricity, people said, ‘Streetlights. We can have electric streetlights. And they’re really expensive streetlights.’”
Right now, with gen AI, there’s a lot of belief in the promise; some use cases are beginning to make an impact. But in most organizations, managers are not yet saying, “Hey, I freed up a full day a week.” What we’re seeing our managers think through is promise in the future. They’re watching things play out. As Emily can talk through, we are seeing our clients investing heavily in gen AI to help our managers.
Emily Field: The common frame that I hear from well-intended CEOs, business executives, CHROs [chief human resources officers] is, “My managers are the most burned out of everyone. And they matter so much. And, if we’re being honest, we canceled some of our manager development programs during the pandemic because it was all hands on deck. But now we are going to focus on managers: we’re bringing back our first manager program; and because they’re burned out, we’re going to send them on a retreat for a week.”
All that is well intended, but sending managers away for leadership development when they are burned out, when the work is not going to stop, when some are so stressed out that they are in the red zone, not the learning zone, and their cortisol is through the roof—that is, frankly, not the best use of resources. We need to think about developing managers not just as a learning program. Learning, training, and development have a role, but as part of a broader manager operating system.
First and foremost, when I’m talking to business leaders, my strong suggestion is, before you send your managers to a leadership development program or a retreat, first create space. Create time in their day. What are they doing that you can remove, automate, delegate, or streamline? Then ask how to build resiliency habits for your managers. How do you help them manage this inherent stress that is increasing for managers? How do we help them put on their own oxygen mask before helping their teams? When you’ve freed up time and space, and you’ve built resilient, adaptable leaders, then you can ask, “What’s our leadership development program?”
Perhaps the most important thing well-intended leaders often forget is to ask, “What does the leadership team need to do differently to support managers?” If we say we want to empower managers, are we setting them up for success? Or are we talking the talk but not walking the walk? Leaders also need to change.
Disruption and delayering
Lucia Rahilly: We see in the headlines again and again that middle managers are under pressure and getting cut, particularly in tech organizations. Are you finding that clients are receptive to making the time for middle managers?
Bryan Hancock: There are efficiencies that can be gained at every level of an organization. If we streamline decision making, if we make accountabilities clear, if we leverage technologies in new ways, it recreates the way work gets done at every level.
What we’re seeing our clients think through now, holistically, is how work needs to get done differently. What’s the role of the manager in the future? How do we craft that role in a way that provides time to do what managers do best?
In some organizations, that may be a reduction in the overall number of managers but in a way that frees up and creates more capacity for coaching, more capacity for the things that matter most; it’s not an either-or conversation. Instead, it’s a way of saying, “Hey, our organization isn’t working. It may not be the cost position we needed. We may not have the coaching and development we need.” Those things often go together.
So how do we comprehensively think about work? How do we think about management practices in the context of work? What do we change to get a more efficient and effective organization, particularly at the managerial layer?
Emily Field: A year ago, right before the book came out, there were some very prominent tech leaders questioning publicly, “Do we even need middle managers?” And that’s really great clickbait. But the reality is, yes, we absolutely do.
Managers are consistently on the top three list of many of the CEOs I speak with. What’s also really important, to Bryan’s point on business performance, is that we also haven’t set managers up for success. Also, too many managers—not all, but many—are not set up for their best purpose.
There are different types of managers. We often talk about managers as one common group. But there are managers who are player–coaches. They have smaller spans of control, three to five. And they have some individual-contributor work that they are uniquely suited to do. Then you’ve got facilitators and coordinators who lead more at scale.
In no situation is the right answer to have one manager with one direct report. We often call those microteams. Particularly in a cost-pressured environment, to Bryan’s point, we should ask, “How do we set the organization, and the multiple types of manager roles, up for success?” And recognize that microteams are not going to set up the organization to deliver.
Leaders taking notice
Bryan Hancock: One of the things that heartened me most after the release of the book was the number of CEOs who recognized that power to the middle applies to their plant managers and the managers at headquarters. They saw their store managers. They saw their facilities leaders. They saw people responsible for being leaders out in the field.
When you put all of this together, they were noticing, “Our managers are saying, ‘Stop the emails coming from corporate. Stop the low-value things we’re doing. Let me engage with our customers, our clients, our people. Let me figure out how to adapt our offerings, because I’m the one positioned to make that happen.’”
If you look at recent press about Walmart and its store managers, there were reports that in addition to having a dedicated manager academy to lean in and coach managers, a Walmart store manager can now make over $500,000 a year. They can make up to 200 percent of their base salary based on their performance. When other organizations see that, they’re thinking, “That is a real investment behind a broad cohort of managers. And if Walmart can do it, and do it at its scale, what does that mean for me?”
Lucia Rahilly: How do you think the rise of AI will affect those spans and layers you described in the knowledge worker setting?
Bryan Hancock: Managers will remain important. They’re managing a team of people whom they’re apprenticing, as well as managing the underlying tools that support the work. If you think also about robotic team members, managers will still be needed to integrate information, to coach, to make things happen.
There may be some efficiencies if you take away some of the administrative work of managers. But I think you’ll end up replacing that administrative work with coaching team members, with quality control, with integrating pieces.
Gen AI can be incredibly powerful if you can give managers insight across all areas of the organization. What we need to do is have more managers thinking holistically and thinking about integration.
AI and EQ
Lucia Rahilly: We recently published an interview as part of our At the Edge podcast series in which Reid Hoffman suggested that AI has the potential to develop soft skills, EQ [emotional intelligence], and empathy. If that bears out, how do you see the rise of an EQ-equipped gen AI affecting apprenticeship and coaching?
Emily Field: Managers don’t have time to do everything they need to do. And we need to free them up to spend more time coaching.
Bryan Hancock: I would separate two things on the empathy and soft-skill front. One is the ability to coach in these areas. We are seeing technologies that could potentially look at the transcript of a meeting and provide coaching on the tone of the meeting, on inclusiveness. These technologies would be able to look at the patterns of interactions on Slack or other collaboration tools and provide coaching and feedback. Generative AI could also help somebody coach through a mock feedback conversation.
On the other side, we all want to be heard and seen. A bot on the other end may be fine for voicing frustrations, but you need managers to make sure people know that they matter. Gen AI can help managers by prompting them to hear and see their people. It can remind somebody that a birthday or an anniversary is coming up. It can prompt even the hardest-edged managers with information that makes them likelier to help their team feel seen and heard.
Lucia Rahilly: Bryan, you invoked inclusiveness there. I’m just thinking about our signature report on Women in the Workplace, which we published in conjunction with LeanIn.Org and which is celebrating its tenth anniversary this fall. Last year, we saw again this phenomenon of the broken rung and the difficulty women have in getting that first managerial promotion. Emily, talk to us about how diversity intersects with this middle manager research.
Emily Field: The first promotion from entry level to manager is where we see fewer women getting promoted relative to men. Last year, for every 100 men who got promoted, 87 women got promoted.
The numbers are disheartening. We need to dig into why and what to do about it. On why, what we know is that women are more likely to be promoted based on past performance. Men are more likely to be promoted based on future potential. What we see is, “Bob is a great guy. Bob’s a rock star. I know he’s going to do great at this. I know he’s never managed before, but he’s awesome.” Versus Mary: “Well, I’m looking at Mary’s track record, and she’s never managed anybody, so I don’t know how she’s going to do.”
The reality is that when promotion and decisions are being made, inherent bias creeps in. And more men at leadership levels means more men are making promotion decisions. We need to debias the promotion process—to make sure we have a common framework, a common rubric for assessment so that we weed out bias and promote an equal process.
What leaders should do differently
Lucia Rahilly: What has surprised you most in the response to this book over the past year?
Bryan Hancock: What has surprised me is the degree to which it continues to resonate. People continue to say, “This book holds up what I believe is true: we need to spend less time on bureaucracy and more time on coaching. We need to select people who are great at managing.”
Emily Field: What’s been most surprising to me is how relevant this topic continues to be. When we were writing the book, I was writing in the margins, “Check for relevance for July 2023,” thinking to myself, “Some of the questions on flexible and remote work, on burnout and well-being, on the great resignation and quiet quitting, surely we’ll have figured those out. And by the time the book comes out, we’re actually going to have to update it, because it won’t be relevant anymore.” The reality is that the book still resonates.
Two other surprises have been the deep engagement of readers and also people telling us, “I see myself in those stories. I deeply empathize with those experiences. They are my own.” The book has been a point of validation and a place for managers to reflect. That’s why we dedicated the book to them. I am thrilled that it’s serving that purpose.
Lucia Rahilly: What’s your best advice to leaders as they continue to navigate various kinds of disruptions in thinking about the role of middle managers?
Bryan Hancock: I would have three pieces of advice. One, think about how to create more time for managers to spend on the most important activities: coaching, strategic activities.
Second, how do we value managers for what they bring to the table? That includes defining what makes a good manager, selecting managers accordingly, creating career paths for people who want to go into management. But if somebody is a really good individual contributor, don’t make them go into management.
And third, invest in managers. Invest in the things we know will be important for managers to do going forward. Invest in their development. Invest in the critical skills managers need to inspire and connect people to their organizations’ mission and purpose, to help them learn how to manage in a way that’s not micromanaging and empowers teams to do more than they had thought possible.
Emily Field: Let me add two more. One, as leaders, ask yourself, “What do I need to do differently to support my managers?” This is not just about managers showing up differently. This is about leaders enabling and being held accountable.
To the point of diversity, equity, and inclusion, ask yourself, “Have I debiased my promotion process? Have I rooted out the inherent, unconscious bias that exists? And have I created an environment in which people are being rewarded for and promoted because they are ready and great to be managers, and not because of some historical or outdated system?”
