Middle Management Vanishing? Tuck Professor vs. Simon Dean

Dartmouth College Tuck School of Business professor Sydney Finkelstein

Dartmouth College Tuck School of Business professor Sydney Finkelstein

Much has been made of the vanishing American middle class, but there’s another disappearance underway that will have a profound effect on certain MBAs’ career opportunities, claims Dartmouth College Tuck School of Business professor Sydney Finkelstein. Last week, Finkelstein argued in an op-ed on the BBC international website that middle-management is on the way to near extinction.

“Technological advances have already taken their toll on lower-level jobs. Office software, including email, enables executive assistants to take on more work. ATMs replace tellers; Amazon eliminates store clerks; automated toll-free numbers have reduced the need for customer service reps. What do you think these changes have done to the people who supervised all these front-line workers? That’s right, there’s just not the same need for them.

“Human-resource managers, for instance, can’t keep up with the latest computer algorithms that do a better job identifying what job skills are needed for a particular position, and how to get talent, than they do. So companies begin to wonder: why do we need all of those HR managers? Bosses who used to make choices over the type of music we listen to, or TV shows we watch, can’t keep up with data-driven analyses from Apple, Netflix, and Amazon that can much more accurately assess what content we want,” writes Finkelstein, a Tuck management professor and faculty director of the Tuck Center for Leadership.

SOFTWARE SAYS: YOU’RE OUT OF A JOB

Indeed, technology’s effects on the overall U.S. jobs picture don’t appear to bode well for a lot of workers, including middle managers, whose numbers can be expected to shrink both because there will be fewer employees to manage, and because technological advances will cut the number of management tasks needing to be done by humans. The Associated Press, in an 2013 investigation, concluded that while rapidly evolving technology is replacing repetitive-task workers with software, “as software becomes even more sophisticated, victims are expected to include those who juggle tasks, such as supervisors and managers . . . technology is eliminating far more jobs than it is creating.”

Finkelstein goes on to point at the rise of entrepreneurship as another major factor driving middle management in the direction of oblivion. “Start-up cultures have had just as big an impact. Start-ups hate middle management!,” he writes in the BBC op-ed. “Within start-ups, there are people who generate business ideas, people who write code, and people who sell what comes together from those ideas and that code. None of these essential jobs in the start-up world is dependent on middle managers making sure people do what they’re supposed to do. Instead, start-ups embody the notion that you can do more with fewer, pushing each individual contributor to take on greater job responsibility.”

Lean startup guru Steve Blank sees middle management in the startup ecosystem evolving, rather than disappearing, with people in those positions handed increasing independence to accomplish the missions. “We’re going to give them a little more freedom, but also make them more responsive and agile. That’s a very different way to manage organizations, even for what I’ll call the pencil pushers,” Blank says. “I don’t think we’re going to replace middle management – I think we’re going to redefine their roles.”

INCREASING SPAN OF CONTROL SHOWS FEWER MANAGERS NEEDED, PROF SAYS

Finkelstein tells Poets&Quants that his basis for asserting that middle-management jobs are going away is mostly anecdotal, and in fact he admits his BBC piece was meant to provoke. But he says research into span of control – the number of people a manager manages – supports his contention. While managers in years past supervised an average of about six people, now, thanks to such advances as email, remote work, and collaborative software, they’re managing about 15, Finkelstein says. “You need way fewer middle managers,” he says. “It’s not that middle management is going to disappear, but the number of middle managers absolutely is going down.”

Naturally, major changes in management structures would profoundly affect graduates of management programs, such as MBAs. But Finkelstein asserts that the effects will depend on the school. “The MBA degree is not a one-size-fits-all around the country, around the world. There are really different levels and different gradations,” Finkelstein says. “If you’re in an MBA program that’s really focused on preparing people for middle-management jobs, you’re going to be in trouble.”

  • Richord1

    Much of the work being done by middle management involves dealing with data. Performance monitoring, reporting and hypothesizing using data mining and analytics. Much of this work can be automated.
    With the increased availability of sensor data (Internet of Things) to closed loop robotics, feeding data back algorithms can do the work of many middle managers. Like manufacturing jobs, those middle manager jobs primarily involved with pushing data will be replaced by algorithms. The pencil pusher has become a data pusher.
    It will take another 10-15 years but the trend is already evident. In spite of the hype about big data and how many jobs it will create, the fact remains algorithms are the solution to big data. There are limited opportunities for those with skills to write the algorithms, but once developed the algorithms don’t require middle managers to “manage” them.

  • Diane Kamer

    With a son just entering Wake Forest’s MA in Management program, I’m of two minds about this.

    On the one hand, I personally think a lot of companies could easily dispense with middle management altogether. I’m an eCommerce copywriter in an in-house creative department, and it really does seem to me that my colleagues and I can easily manage our own deadlines. Moreover, we could benefit from more direct access to upper management’s strategic directives. Why filter that stuff through layers of middle management? It’s demeaning to seasoned professionals to be treated like children.

    I suppose middle management can be a buffer between the head honchos who drive the strategy and the worker bees who execute it. But too often, I think, it seems that the real purpose of middle management is just to kiss upper management’s collective tush. (OK, I’ll say no more about that!)

    To be fair, I wouldn’t want a middle manager’s job — too much pressure from above, too many headaches from below, too little freedom for decision making. Ugh!

    So, anyway, on the one hand, I say yes, let’s reduce the number of middle managers. On the other hand, I want my son to have a good job when he gets out of business school. I think he’s more of the hands-on analytical type who could end up doing something like marketing research, but who knows? Maybe he’ll end up in middle management. And, in that case, I’ll have to revise my opinion and hope that middle managers remain in high demand. 😀

    By the way, I remember reading recently that Zappo’s is eliminating the middle-management function and reassigning its middle managers to other specialties. It will be interesting to see how that works out.