Effective and efficient middle management is one of the biggest challenges facing manufacturing and other organisations today.
Driven by the explosion of data and increasing demands for faster decision-making cycles, the need for middle managers is a critical concern for senior management.
International Data Corporation (IDC) has published a new report, Middle Management and the Future of Operations, that examines the impact of artificial intelligence (AI) on decision-making and why organisations must embrace digital engineering and encourage resilient operations.
“Every company wants to make better decisions in a faster time frame. Middle management is the link that connects executives to individual workers,” says Kevin Prouty, group vice-president of IDC Manufacturing and Energy Insights. “However, this group can make only a limited number of effective decisions at the same time. To keep up with the rapid pace of change organizations need to rethink this approach. AI-based automation and digital engineering will be key pieces to transform the operational decision-making process.”
IDC has identified five key reasons organizations should consider evolving their traditional operations and management structure:
* Slow and incomplete information flow to decision-makers – It can take days, weeks, and even months for the information needed for senior decision makers to make its way up through layers of staff who each must collate, analyse, and interpret the data.
* Slow response once decisions are made – Once the data is collated into actionable information, orders or tasks must then make their way down to that same middle management layer.
* Biased and misinterpreted information – Information on the way up has to pass through several organisational layers with biases shaped by personal goals, KPIs, and incentives.
* Timeliness of decisions – All that up and down activity means that by the time the decision reaches the point of activity, there is a good chance the decision is obsolete.
* Creating silos of information – Middle managers tend to create or reinforce siloes in the organization and unintentionally limit free collaboration.
By 2030, IDC believes that the middle management layer of large organisations will begin to compress as the pool of suitable candidates declines. Effective middle managers must have a unique combination of detailed domain expertise, creativity, charisma, and ambition.
These traits are difficult to find in combination, especially for operational organizations, which struggle with skill gaps and declining interest among younger workers. With fewer qualified workers available, the middle management layer will eventually thin to just a few people managing a highly structured decision-support system.
New Digital Engineering functions will be integral to successful digital transformation within organizations. IDC describes Digital Engineering as an operation based on resilient decision making that is driven by customer and market activity. The core of the new organisation is senior decision-makers sitting within an AI-driven decision-making framework fed by business and market information from IT and operational information from Digital Engineering.