Middle managers are a much-maligned presence in the workplace, with few people having much good to say about them. However, research from Wharton reminds us that this image is often unfair and that middle managers can play a crucial role in a functioning workplace.

The study suggests that middle managers may have more influence on your organization’s performance than any other group. The authors argue that middle managers are especially important in industries that require employees to be innovative such as biotech, computing, and media.

“It is in these knowledge-intensive industries where variation in the abilities of middle managers – the “suits” he refers to in his paper — has a “particularly large impact on firm performance, much larger than that of individuals who are assigned innovative roles,” they explain.

The value provided by middle managers in such an environment is in areas such as project management, the allocation of resources, and generally coordinating the talented individuals required in such industries.

A changing role

Given the perhaps unheralded role of middle managers, it’s important to understand how the digital transformation of the workplace might affect this vital group. Research from the University of Eastern Finland set out to find out. The researchers discovered that when artificial intelligence systems join service teams, it puts more pressure on middle managers in the financial services industry.

This unexpected result is because the introduction of AI meant that many of the routine tasks people used to do are now performed by technology. As a result, teams tend to be a hybrid of humans and AI, which brings new challenges for managers in terms of how people interact, handle relationships, and lead.

The study looked at how middle managers in financial services feel about the impact of AI on their jobs. They interviewed 25 experienced managers from a top Scandinavian financial services company where AI has become a big part of daily tasks. The results show that bringing AI into service teams is a tricky thing for middle managers. It adds new challenges to their work, making it a juggling act to navigate through these changes.

“The productivity of work grows when routine tasks can be passed on to artificial intelligence,” the researchers explain. “On the other hand, a fast pace of change makes work more demanding, and the integration of artificial intelligence makes it necessary to learn new things constantly. Variation in work assignments increases and managers can focus their time better on developing the work and on innovations. Surprisingly, new kinds of routine work also increase, because the operations of artificial intelligence need to be monitored and checked.”

Unsure status

Part of the problem seems to be that middle management is an inherently social function, but this fundamentally changed as a result of the introduction of AI into the workplace. It became difficult for middle managers to gauge whether the technology was a technical tool or a virtual colleague. Some technologies were better suited to one whereas others were better suited to the other.

“Artificial intelligence was sometimes given a name, and some teams even discussed who might be the mother or father of artificial intelligence. This led to different types of relationships between people and artificial intelligence, which should be considered when introducing or applying artificial intelligence systems in the future,” the researchers explain. 

“In addition, the employees were concerned about their continued employment, and did not always take an exclusively positive view of the introduction of new artificial intelligence solutions.”

Ethical concerns

The study also found that the introduction of AI into the workplace posed a range of ethical considerations for managers to grapple with. For instance, there were particular concerns about the fairness of any decisions made by the AI systems.

Navigating all of these things requires a fresh set of skills for middle managers to master. These not only involve an understanding of the technical aspect of AI-based systems but also the emotional intelligence and problem-solving skills to manage the new demands placed on people from the technology. Perhaps understandably, they also need to be adept at dealing with change.

“Artificial intelligence systems cannot yet take over all human management in areas such as the motivation and inspiration of team members,” the researchers conclude. “This is why skills in interaction and empathy should be emphasized when selecting new employees for managerial positions which emphasize the management of teams integrated with artificial intelligence.”