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It’s time to reinvent the role of managers in the changing world of work. The traditional role of a manager is starting to look outdated. In this article, it is argued that the role needs to be redefined and even split. But first, let’s look at the waves of innovation that have brought us this far.
The first wave, a re-Hinduization of processes, began around 1990 and lasted until the early 2000s. It focused on reducing bureaucracy and increasing operational efficiency. Companies have globalized their work processes and outsourced them, flattened the hierarchy and in many cases put their remaining managers in the coaching roles required to oversee employee tasks.
The next wave of innovation, digitization, came in 2010 or so. It led to the democratization of access to information and people, but undermined the traditional sources of power of managers. CEOs and other executives can now communicate directly with all of their employees. When they are no longer an essential part of the information chain, managers have begun to feel a loss of power, control and status.
Then came the Agile movement and its processes of change, which companies had begun to adopt in the previous decade. Its goal was to shorten schedules and drive innovation through cross-organizational “trading arenas” that connect skills to work and allow for the rapid assembly of project teams on demand. As a result, managers began to lose touch with the employees reporting to them.
A fourth wave came in 2020, with the plague, when companies and employees had to adapt to the possibilities of flexible work. Once employees were no longer tied to a physical workplace, managers lost the control they had over employee performance and behavior.
These waves of innovation changed the role of the manager in three dimensions: power, skills and structure. In terms of power, managers need to think about how to make teams successful, not how the teams will serve them. In terms of skills, managers are expected to coach for good performance, not oversee tasks. And structurally, they should lead in more fluid environments.
The bank that turned 14,000 middle managers into people leaders
Some organizations have taken deliberate steps to re-imagine the role of the manager. Let’s take a look at transformative changes made in three different companies.
Most companies think of their senior executives as the people who make the change happen. According to this theory, the management layers below the senior layer will resist change. The executives at Standard Chartered – a bank with more than 750 branches in more than 50 countries – have chosen to think differently: their 14,000 middle managers will play a key role in the bank’s growth.
The management team started with basic steps: renaming the position, creating an accreditation process and strengthening the sense of the executive community. Managers have become “people leaders,” recognizing the importance of the human connection in their work. At the same time, the new accreditation process has tested the capabilities of driving growth, building trust, connecting teams and making brave decisions.
The bank has been working for decades to turn its senior executives into coaches, but now the challenge has led to the expansion of the effort to 14,000 leaders. The bank has done this through various initiatives – an artificial intelligence platform for training, for example, and training in training teams and individuals in the markets of Africa, the Middle East and Asia. The bank also launched a pilot project in which it offered people leaders to pay for formal training and accreditation as coaches. Those accepted coached other employees. So many participants reported an improvement in skills and confidence that the bank organized additional rounds of training and accreditation.
Rewiring of processes and systems
In 2013, then-IBM CEO Ginny Rometti announced that all employees would be required not only to develop new skills but also to learn to work differently. Changing their management styles to agile work practices will get all employees involved in the journey.This meant doing three things: turning managers into additional responsibilities with the digital transformation of their work, training them in new skills and creating a performance-based reporting system.
The human resources function has implemented an artificial intelligence system aimed at eliminating administrative work. A customized learning system has also been launched so that principals will have access to support for their mobile phones. AI-based programs have also helped managers make better decisions about people and spot issues like inefficiency.
IBM also introduced an accreditation process for executives, based on a new training program. Managers who received the accreditation today achieve five points more than those who did not receive it for employee involvement.
Splitting the role of manager
Telstra, a large Australian telecommunications company employing more than 32,000 people, has taken perhaps the bravest step. When CEO Andy Penn decided to make the company more consumer-focused, fast-paced and agile, he and his human resources manager, Alex Bednock, dramatically flattened the hierarchy. They reduced the number of organizational layers to three. “That change was so necessary. A lot of the time, “Danuk told us.” We realized we needed to separate work from management and create two different roles: leading people and leading work.
Leaders are responsible for groups of employees with similar skills, known as “chapters”. Most of the “episodes” consist of several hundred people. People leaders are responsible for making sure that the employees on their teams have the skills and abilities that are appropriate for the present and future needs of the business. Their performance is judged according to the degree of their involvement in the situation of their people and the degree to which they meet the requirements.
Foremen, on the other hand, focus on the workflow and the commercial aspects of the business. They create and execute work plans and decide which teams to hire for this purpose. The performance of these executives is measured by the clarity of their plans, the quality of their assessments and meeting deadlines and budgets.
This split model of management is not new. What is new is the context. Telestra has proven that the model can work efficiently and profitably across all functions in large companies that have adopted agile practices and flexible work arrangements.
Telstra’s experience shows us the benefits of new radical organizational design, and the experience of Standard Chartered and IBM shows us that at least companies can take deliberate steps to change the mindset, energy and focus of executives. With such actions we can ensure that people get the hygiene they need in the new world of work.