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2025/3/2416:48what'sthefutureofmanagement?DeloitteInsights

Istherestillvalueintheroleof

managers?

Formostorganizations,tevalueisn'tfoundin

eliminatingtberoleorignoringtheneedforchange.There'sathirdpath:reinvention.AndAICanbelp.

ARTICLE.17-MINREAD24MARCH2025

companieswithstrongmanagementreportupto15%higherfnancialperformancethanthosewithweakermanagement,'andevidencesuggestsmanagersmayhave

2

moreinuenceonanorganization'sperformancethananyothergroup.Sowhyaresomeorganizationseithereliminatingtherolecompletelyorgreatlyreducingthe

numberofmiddlemanagerroles?

Thisshifttoward"bossless"organizationsislikelybeingdrivenbyarenewedfocus

oneffciency,agility,andworkerempowermentwith"zerodistance"tothe

customer.Economicpressureshaveorganizationslookingtoreducecosts,andarticialintelligenceandothertechnologiesarepoisedtotakeonmany

administrativetasks.Accordingtooneanalysis,Usemployerswereadvertising42%fewermiddlemanagementpositionsattheendof2024thantheydidinthespringof

3

2022.AndresearchbyGartnerpredictsthatthrough2026,20%oforganizationswilluseAItoflattentheirorganizationalstructure,eliminatingmorethanhalfof

4

currentmiddlemanagementpositions.

READMOREFROMTHEREPORT

2025GlobalHumancapitalTrends

https://www2.deloitte.com/us/en/insights/focus/human-capital-trends/2025/future-of-the-middle-manager.html1/20

2025/3/2416:48416:48What'sthefutureofmanagement?IDeloiteInsightsmanagement?DeloitteInsights

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/us/en/insights/focus/human-capitel-trends/2025/future-of-the-middle-manager.html2/20

Thesechangesbegthequestion:Istherestillvalueinthemanagerrole?

somekeycapabilitiesthatmanagersoftenperformwillalwaysbeneededlike

coachinganddevelopmentoftheirpeople.Today,thepeoplebeingmanagedareinneedofsupportmorethaneverduetotheshrinkinghalf-lifeofskills,theimpactofAI,andtheincreasingpaceofchange.

Andnewcapabilitieswilllikelyneedtobedevelopedinlightofachanginglandscapeintheworldofwork.ThisSugeststhatmanagersmayneedtotakeonnewrolesaswell·Managers,forexample,areuniquelysituatedtoredesignworktocapitalizeonthepromiseofAI,enablechangeandagilityinthefaceofincreasingvolatility,and

makejudgmentcallsanddecisionsclosertothecustomer.Itmightnotbethe

managerwhoperformsthesecapabilities,butformostorganizations,keepingthesecapabilitiesinthemanagerrolemakesthemostsense.

Formostorganizations,eliminatingmanagersaltogetherisn'tthesolution.But

neitherissimplyretainingorelevatingtheroleofthemanagerasithasexistedfor

overacentury.Instead,organizationsshouldseekathirdpath:reinventionoftheroleentirely.Becauseinanageinwhichworkisincreasinglycomplexandvolatile,

people-powered,andmoreAI-augmented,thetraditionalroleofthemanagermaynolongerbeftforpurpose.wemayindeedhavefewermanagersinthefuture,but

whatandhowtheydotheirworkshouldevolveforthenewworldofwork.

AI,alongwithnewsupportstructures,isakeyenablertothisreinvention.NotonlycanAIautomatemuchoftheadministrativeworkthattakesthetimeofmanagerstoday,butitcanalsobecomeapowerfulallyinassistingthemwithfocusingonandleadingwhatmattersmosttoorganizationalresults:

.Developing,coaching,motivating,andnurturingpeople

.Redesigningwork,reallocatingresources,andoptimizinghumanandmachineinteractionstodrivehumanperformanceintheageofAI

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2025/3/2416:48what'sthefutureofmanagement?DeloitteInsights

.Enablingagility,strategicproblem-solving,andinnovation

Thepromiseandperilsofunbossing

Astheroleofthemanagerhascomeunderincreasedscrutinythe"unbossing"trendthat5

involvesthinningoutmiddlemanagementhasemerged.Manyorganizationsarenow

experimentingwitheliminatingmiddlemanagerpositions,eitherasaboldnewoperating

modelbasedonself-organizingteams,orasanexercisefocusedoncostcuttingandreducing

bureaucracy.othersaresignificantlyreducinglayersofmanagementandincreasingtheratio7

ofworkerstosupervisors.Inanidealworld,thismodelgivesemployeesmoreautonomyandcontrolovertheirworkwhileofferingapositivenarrativeforshareholdersthatattening

managementwillleadtogreatereffcienciesandagility.

Forsomeorganizationsthismodelworks.Butmanyorganizationsstrugglewithrealizingthepromiseofit.

Youcancuttheroles,buthumanswillstillleadandbeled,evenwithouttheformaltitles.Thiscancreate"shadowleaders"anduncleardecisionrightsthatslowtheorganizationratherthancreateefficiencies.organizationsthathaveattemptednewformsofunbossingforexample,

holacraciesandselforganizingteams—oftenfoundthatadecentralized,bosslesssystem8

endedupcreatingitsownformofbureaucracyorothercomplications.onefoundational

studyrevealedthatattenedfirmswithfewermiddlemanagerstypicallyexhibitmorecontrolanddecision-makingatthetop—theoppositeofwhatwasintendedtoreducecostsandpushdecisionsdownwardtoimproveagility.

whatisamanager,anyway?

Inmanyorganizations,leadersstruggletoclearlydefnewhatamanagerevenis.

Managersthosewhooverseedirectreportsandactasabridgebetweenexecutivestrategyandfront-lineexecution—arealltoooftenacatch-allroleinthe

organization.Theyareconstantlypressuredtobeprojectsupervisors,changeagents,coaches,administrators,problemsolvers,andmore.Andallofthisontopofdoingtheworkitself.

Nearly40%oftheirtimeiseatenupfrefghtingtoday'sproblemsoronadministrativework(fgure1).

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2025/3/2416:48416:48What'sthefutureofmanagement?|DeloiteInsightsmanagement?DeloitteInsights

It'snowonderthatmanagersareoftenoverwhelmed,frustrated,andburnedout—

workerIocaseinpoint:40%ofmanagerssaidtheirmentalhealthdeclinedwhen

neresearchstudysuggeststhattheyrethem.stdepressedandstressedcateg

theytookonamanagerialorleadershiprole.And72%ofworkersinJapandon'tevenwantamanagementposition,whatwasoncethehighlysought-afterpathtowardupwardmobilityhaslostitsappealformanyaroundtheworld.

yetmostmanagersfeeltheirorganizationsaredoingverylittletosupportthem.ourresearchshowsthatorganizationsrecognizetheimportanceofbettersupporting

managersandreinventingtheirrolebutarestrugglingtomakeprogress(figure2).Accordingtoour2025GlobalHumancapitalTrendssurvey(see"Methodology"),36%ofmanagersfelttheywerenotsuffcientlypreparedforthepeople-manager

partsoftheirroleand36%donotbelievetheirorganizationhasimplemented

technologysolutionstohelpthemperformtheseroles.

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Managersneedsupportanddevelopmentespeciallyyoungermanagerswhoearnedpromotionsbasedontheirachievementsasindividualcontributors,butwhohaven'tyetdevelopedthemostimportantskillneededtomeetallthreenewcapabilitiesforthereinventedroleofthemanager:judgment.

Thekeycapabilityneededfortomorrow'smiddlemanagers:Judgment

InanerainwhichthetechnicalandfunctionalworkcanincreasinglybeperformedbyAI,andinwhichworkisincreasinglyfuidandcomplex,themostimportantskillmanagerswilllikelyneedistheartofjudgment—ortheabilitytomakediffcult

decisionswheretherearenocut-and-dryanswersorwhentheinformationavailableisinsuffcient.Judgmentistheabilitytounderstandorganizationalhistory,culture,

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What'sthefutureofmanagement?IDelotteInsights

2025/3/2416:482416:48what'sthefutureofmanagement?DeloitteInsights

uide

andcontextandusehumancapabilitieslikeempathyandimaginationtoguidepabilitieslikeempathyandimaginationtog

discretionandtoimproviseratherthansimplyapplyrules.

Judgmentisn'tsomethingthatcanbelearnedfromatextbookitrequires

experienceandpractice.yetincreasingly,organizationsarefndingitdifficulttosupplythatexperiencetoworkersSotheycandevelopintostrongmanagers.

Judgmentisthefoundationforallthreenewcapabilitiesforthereinventedroleofthemanager(figure3)theabilitytohavetheempathytomaketherightcalls

neededtocoachanincreasinglydiverseworkforce;thecreativityandwisdomto

redesignworkandunlockhumanperformanceintheuncharteredterritoryofanAI-augmentedworld;andtheabilitytoexercisestrategicproblem-solvinginthefaceofuncertainty.

what'stheroleofthemanager?

Traditionally,theroleofthemanagerwastotellworkerswhatneededtobedone,observetheiroutput,andrewardorsanctionworkersaccordingly oftendoingtheworkalongsidetheirteams.

Buttheroleisshifting.Managersareincreasinglybecomingleadersofpeoplewhousejudgmentto:

.Develop,coach,motivate,andnurturepeople.

•Redesignwork,reallocateresources,andoptimizehumanand

machineinteractionstodrivehumanperformanceintheageofAI.

.Enableagility,strategicproblem-solving,andinnovation.

Thisredefnitionincludesboth"player-coaches"thosewhodotheworkalongsidetheirpeopleand"orchestraconductors"wholeadfromthe

front.

Judgment,infact,isthekeyskillneededbymanagerstoresolvetensions(fgure3).Theywillneedtocontinuallybalancethenecessityfororganizationalstabilityandcontrol,whilealsoenablinganddrivingorganizationalagilityandempowerment.

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ir

Likewise,managersareinauniquepositiontospotandrealizethepotentialoftheiruepositiontospotandrealizethepotentialofthe

people,whilealsoworkingtoachievepredictableoutcomesandminimizerisk.

Thethreecriticalcapabilitiesmanagers

needandhoworganizationscansupportandbuildthem

whatarethenewcapabilitiesofthereinventedroleofthemanager,andwhyaretheyimportantintoday'sworldofwork?AndhowdoweuseAIandother

organizationalsupportstructurestobuildthem?

1.Develop,coach,motivate,andnurturepeople

coachinganddevelopmentaresomeofthemostimportantrolesamanagercanplay·our2025researchsuggeststhatamanager'sabilitytolead,inspire,andengagethe

workforceisoneofthelargestinfluencersinmaintainingaproductiveworkforce.

Themosteffectivedevelopmentandmotivationhappenataone-on-onelevel

12

betweenmanagersandtheirpeople.otherDeloitteresearchshowsthateffectivelydevelopingyourdirectreportscanboosttheirperformancebyasmuchas27%and

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makethem1.5timesmorelikelytoexceedtheirgoals.Further;,67%ofemployeesinour2025surveysaythattheirmanagerknowsbestwhatmotivatesthem.

consideronelifesciencesorganization,whichconductedanexperimentto

understandtheimpactsofincreasingthespanofcontrolformanagerssupervisingfeldrepresentatives.specically,thisorganizationconductedasmallprojectin

whichitnearlytripledthenumberoffeldrepresentativesforwhichamanagerwasresponsible.Thefndingsofthisexperimentuncoveredthatwhilemanagerswere

abletoabsorbtheincreaseinthenumberofemployeesfromaday-to-dayoperationsperspective,thiscameatthecostofthehumanelementsrequired(e-g.,coaching,

peopledevelopment),resultinginloweremployeeengagementandincreased

turnover.Asaresultofthisexperiment,theorganizationwasabletofndtheoptimalspanofcontrolthatdidnotjeopardizethecriticalrolethatmanagersplayaspeople

14

leadersandcoaches.

Inconsultingorganizations,employeeshavelonghad"coaches,"whohelpworkers

growanddevelop,andseparateprojectleaders.Inasimilarvein,Telstra,an

Australiantelecommunicationsandtechnologycompany,splittheroleofthe

managerintotwodistinctroles:leaderofpepleandleaderofwork.Leadersof

peoplefocusonensuringtheirworkershavetheskillsandcapabilitiesneededforthe

businessandhelpthemchartpathstootherpartsofthebusinesstoavoidsilosand

furtherintegration.Leadersofwork,ontheotherhand,don'tdirectlymanagepeopleorcontrolbudgets;they'reresponsibleforleadingprojectteamstoensure

15

deliverablesareontimeandonbudget.

Howorganizationscansupportmanagersinbuildingthiscapability

organizationscanuseAItohelpmanagersinthisrole.AICanoffermanagersreal-

timeperformanceinsights,forexample,tohelpthembecomebettercoaches.Insightscanincludedataonworkersentiment;how,when,andwithwhomworkerswork;

howeffectivelyemployeesarecollaborating,andtheoutcomesofworkers'workotnamejustafew.

AtIntel,forexample,managersuseAItohelpguidetheminprovidingdevelopmentopportunitiesandfeedbacktotheirworkers.christypambianchi,Intel'schiefpeopleoffcer,says,"Havingabuilt-in[AI]coachforthemanagercanhelpgivethem

insightsabouttheteamthatthey'remanagingandtheactivitiesthatthey'vetaken

2025/3/2416:482416:48What'sthefutureofmanagement?|DeloiteInsightsmanagement?DeloitteInsights

on."AlthoughAICanhelp,pambianchisuggeststhatAIisn'tareplacementforthe

on."AlthoughAIcanhelp,PambianchisuggeststhatAIisn'tareplacementforthe

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managerrole.sheexplains,"Empathy,support,connectivity,psychologicalsafety,commitmenttotheenterprisethoseareallthinSthatIthinkonlyamanagerandleadercanhelpcreate,andCo-workerscancreateforeachother·

Asworkplacescombinehumanandroboticworkers,AItoolscanalsoenable

managerstobettermeasureindividualperformanceofbothrobotsandhumans,

17

analyzetheirerrors,andimproveperformance.Managersinarepairfacilityatoneelectronicscompanyfoundthatmanyemployeesfollowedaregularpatternofhigherproductivityinthemorning,withsubstantialvarianceinafternoonproductivityandincreasederrorratesastheyrushedtomeettheirdailyquotas.Managerscouldnewlyseethisduetotheprecisedataprovidedbytherobots.Asaresult,managerswere

18

abletobettercoachtheirworkers,reduceerrors,andimprovetheirperformance.

othertechnologiescanhelptoo.Atonetelecommunicationscompany,managerscandevelopbetterpeopledevelopmentskillsbypracticingdifficultconversationswithanavatarinvirtualreality,withAIanalyzingtheirdatatoactasacoachtorefnetheirskills.'

InadditiontousingAIandothertechnologies,organizationscanalsosupportmanagersinbeingbetterpeoplecoachesanddevelopersby:

·Requiringtraining·deve.pment.andaccreditatinfmanaerialC·achindevelopmentskills.

.creatingopportunitiestopracticeandlearnhowtohavediffcultconversationsandmakechallengingpeopledecisions.

.Assessingmanagerperformanceoncoachinganddevelopment,andtyingmonetaryrewardstotheassessment.

.Acknowledginggreatcoachinganddevelopmentthroughrecognitionprograms(e·g,grantingmoretimeoff,publicrecognition,badges,etc.).

.Buildingacultureofgrowthanddevelopmentfromthetop.

.Helpingmanagerslearnhowtocustomizethewaytheydeveloppeoplebytappingintoindividuals'uniquemotivations,skills,andpassions.

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2.Redesignwork,reallocateresources,andoptimizehumanandmachineinteractionstodrivehuman

performanceintheageofAl

AIistransformingwork,withmoreworkersworkingwithAIthaneverbefore.

studiessuggestthatglobaluseofgenerativeAIhasjumpedfrom55%in2023to

20

75%in2024,andDeloitteresearchrevealsthatmorethaneightin10workers

21

nowinteractwithAIatwork.AsworkersbecomeincreasinglyintertwinedwithAI,managerswillneedtotakeonanewroleofredesigningworkandroles,helpingtheirpeoplebettercollaboratewithsmartmachines,andreallocatingresourcestoperformworkwhetherthatbehumanormachine.

Managersarewellpositionedbeingclosetotheworkbutnottooclosetohelpredesignworkandjobs.Forexample,oneminingcompanyintroducedfully

automated,remotelyoperatedtrainstotransportminerals,retainingdriverstoassistiftheautomationtechnologyfailedandredesigningtheirroles.Althoughtheir

knowledgewascriticaltotheautomationprocess,managersrealizedthatdrivers

sufferedfromlackofroleclarity,autonomy,andstimulatingwork,oftenperforminglow-skillworklikepolishingtrainsandfeelinglessconfdentinrecoveringbroken-

downtrainssincetheynolongerhadopportunitiestodrive.Drivers'roleswere

expandedtoincludemoremeaningfultasks—suchastrainingrecruits—andthey

22

wereallowedtorotatetodifferentportstokeeptheworkvaried.

Als0,considertherolemanagersplayedforoneretailfashionorganizationinhelpingworkerscollaboratebetterwithAItocreatebetteroutcomes.whenAIWas

introducedtohelpfashionbuyersselectwhichstylescustomerswouldwanttowearnextseason,managersnoticedthebuyersoftendidn'tadoptAI'sstrategic

recommendations.ThefashionbuyersfeltthattheAIrecommendationstookawaythecreativeworkofselectingnewstylesthefavoritepartoftheirroles.Instead,

theybecameproftoptimizers,requiredtotestvariouscollectionswithAItoidentifywhichcollectionswouldlikelymakethemostproft.Managershelpedthefashion

buyersmoreeffectivelycollaboratewithAIbyredefningthebuyers'identityas

"visionaries"whostrategizeaboutnewcollections.Asaresult,thebuyers'resistance

23

fadedandtrustintheirAICounterpartsincreased.

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Managersalsohaveanimportantroletoplayinhelpingothersdevelophuman

capabilitieslikejudgment,empathy,andimaginationtoworkeffectivelywithAI,aswellasmitigatingtherisksofAI.TheywillalsoneedtoincreasinglyoverseeAI,inadditiontopeople.Inthefuture,managersmayneedtomanagemultipleAIagentsworkingtogetherinanagentecosystem.AtorganizationslikeJPMorganchase,thecompanyisalreadydevelopingautonomousagentsthatperformcomplexmultistep

24

tasks.GeorgeC.Lee,Co-headoftheofficeofappliedinnovationatGoldmansachsandthefrm'sformerchiefinformationoffcer,arguesinhisFastcompanyarticle

cc,,25

thatmanagersneedtodevelopmachinecapitalmanagement.

Howorganizationscansupportmanagersinbuildingthiscapability

Ironically,organizationscanuseAIitselftohelpsupportmanagersintheirnewroleofoptimizingworkforAIandhuma

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