Are Managers the Key to Unlocking AI’s True Potential?

BRYAN HANCOCK: Middle managers aren’t the ones that are causing the bureaucracy. They’re the ones that want to fix it. And so let’s give them the power and the tools to fix it. And generative AI is one of those tools because of what it can do. 

MOLLY WOOD: Research by the global management firm McKinsey and Company suggests that AI has the potential to automate the activities that make up up to 70 percent of a worker’s time, and also to add trillions of dollars in value to the global economy. However, as work becomes more efficient, Bryan Hancock, the global head of McKinsey’s talent management practice, says, the need for strong human leadership gets even more important. Last year, Bryan co-wrote the book Power to the Middle: Why Managers Hold the Keys to the Future of Work. Today, he’s here to tell us why middle managers are uniquely positioned to help leaders build AI-powered organizations, and how AI can make them better managers by giving them time to focus on what really matters, their people. Here’s my conversation with Bryan.

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MOLLY WOOD: Bryan Hancock, thanks so much for coming on WorkLab. 

BRYAN HANCOCK: Ah, thanks for having me. 

MOLLY WOOD: So you co-wrote a book with your colleagues called Power to the Middle: Why Managers Hold the Keys to the Future of Work. Who are these middle managers? Actually, at Microsoft, we like to refer to them as people managers to emphasize the importance of putting people first.

BRYAN HANCOCK: I actually love the term people managers. Because at the core, what a manager is is somebody that’s managing a team, managing an individual. And we see managers and middle managers being anywhere in the middle of the organization, going all the way up to the most senior levels. If you don’t have anybody above you but the board, you’re probably not a middle manager. [Laughter] But if you’re, if you’re somewhere else, you’ve got somebody above you and somebody below you, and the folks below you are a team where you’re trying to translate what that overall strategic direction of the company is to what it means for you and your work on a day-to-day basis. And one thing that we’ve seen in our research is that for many managers, they’re spending well less than a third of their time managing people. They’re spending half of their time on administrative work or individual contributor work, and they’re spending a lot of the rest of the time in meetings. What we know is that managers that actually spend time managing people and actually are in the top quartile of management practices—we have a way of measuring that—the performance of those companies are better. And, by the way, the way employees feel at those companies is better as well. And so we really see managers as being this key layer in the organization that drives both performance as well as employee satisfaction, employee wellbeing. 

MOLLY WOOD: How resonant is this message now at a time when it’s almost a little provocative in the era of AI, and even just tech disruptions and layoffs writ large. I sort of feel like there’s a bit of an argument or a sense that this layer is less important, and you are arguing the opposite, that it’s critical to an organization’s success. 

BRYAN HANCOCK: Well, what I think some of the organization changes and tech disruptions can do is take those parts of the job that are less focused on people management and imagine better ways of doing it. If we could reorganize to have fewer meetings, if we could leverage technology to make my administrative tasks, whether they be travel approvals or filling out forms on behalf of my employees, or if I could have large language models take and create first drafts of the individual contributor work I need to do as an expert, all of the sudden what we’ve done is we’ve created more manager capacity to lead. But we’ve also significantly changed the role. The way we think about it is, manager roles are going to change and evolve. What we’re saying is, let’s reimagine the layer. And as part of that re-imagination of what we’re doing, let’s double down on what we know is some of the most important things that managers do, and that’s manage people.

MOLLY WOOD: That human connection, interestingly, is not just something that’s a big part of the book, but also just a theme that keeps coming up in this season of the podcast and the conversations we’re having, is this importance of fostering human connection. I would love for you to talk a little bit more about the importance of that and how you define human connection in the workplace.

BRYAN HANCOCK: We know empathy matters a lot. Managers who are empathetic, who create genuine connections with their team, they build trust, they build sense of belonging, they build a sense of safety. So we know empathy matters. We also know that the context in which you operate changes the amount of empathy you have. There’s a famous experiment about the Good Samaritan. And basically what they do is they take a bunch of seminary students and they tell them that they have to give a speech, across campus, on the story of the Good Samaritan, who stopped to render aid. For half of the group, they say, Wander over, they’ll be ready for you, you know, go over. And for the other part, they said, Oh my gosh, I’m so sorry, we messed up the timing, you’re late. And they have an actor standing at the doorway of the building that they’re going into in distress. Of the folks that had plenty of time, seven out of 10 stopped to help. Of those that thought they were late and had an audience waiting for them, one out of 10 stopped. They’re going to give a sermon on the Good Samaritan, the person who stopped to render aid. And they were in such a hurry to give that talk, they went right by somebody that needed aid. 

MOLLY WOOD: And they were seminary students too?

BRYAN HANCOCK: And they were seminary students! So think about that, right? 

MOLLY WOOD: Yeah. 

BRYAN HANCOCK: In the context of a manager, you could be predisposed to be empathetic, to render help. But if you don’t feel like you have the capacity, if you’re yourself burned out—43 percent of managers are burned out—it’s going to be that much harder. The nature of the role, how we set up the manager role, is linked to whether managers actually have the space to lead. Then, of course, there is skill building and development to be great people leaders—that’s also something that is taught, but that goes alongside creating the job structure that they feel like they have the time and space to actually be there for their teams.

MOLLY WOOD: So, really you’re saying that when people are less stressed and they have adequate mental capacity, they can be more empathetic and therefore better leaders? 

BRYAN HANCOCK: Absolutely. And one of the things I’m most excited about for generative AI is its ability to make managers’ jobs better. So generative AI does play on that, you know, can help on the administrative tasks, can help on creating the first drafts for the expert, can even help in some of the people leadership. It can understand sentiment from employee surveys or from other areas that can help managers figure out, Okay, what’s going on? And it can help in some of the coaching conversations. My first job was as a cart pusher at Kroger in high school. And I had a career conversation with my front-end supervisor. The career advice I got was, Well, I know you want to go to college, but the thing you’ve got here is you can become a cashier, or you can go in the butcher shop—you can work in meat, which I think is, like, the best path we have. The idea that now we can equip every front-end manager in a store with the ability to say, Hey, Bryan wants to go to college. What are the options available? Oh, there’s an internship program for former employees. You can do this. You can earn and learn in college. You can add these certificates alongside your workload, so you can have an entry-level job in IT. All of those things now, which I may not have been able to find, which my manager or anybody in the store wouldn’t know, is now at the fingertips of my manager. And so my manager now has a coaching superpower. I think some of these generative AI technologies can help managers better help their people and teams.

MOLLY WOOD: I think you would have done great at the meat counter, for what it’s worth. 

BRYAN HANCOCK: I would have loved it.

MOLLY WOOD: One of the challenges, I think, with empowering middle managers is training, and now there’s this additional layer of AI IQ, right, that’s going to be required for any manager, so that they can then go on and say, Well, what are the options for Bryan if he wants to go to college? How prepared are we to do this training? 

BRYAN HANCOCK: With regards to AI overall, I think we are seeing organizations start to roll out the first level of company-wide training of, this is what it is, this is what it isn’t, these are what the risks are, these are the core types of use cases. You know, that level of engagement of both managers and the broader organization is, I think, a basic level of literacy we’re seeing many organizations do. What I think the next level that we’re seeing is organizations start to think through—department by department, area by area—what are we going to ask our managers to do differently because of the change in technology, and how do we equip them? And so one example worked with a law firm. The way work flows in a law firm is first- and second-year associates draft initial versions of whatever document they’re working on for fifth- and sixth-year associates to review before going on to the partner and the client. And the law firms have recognized that, you know what, a really good first draft can often be created by gen AI. And that’s what we need to provide for the fifth- and sixth-year associates. So if gen AI can do that, why do we need first- and second-year associates? Well, they very quickly have the following question, but how do we create new sixth-year associates if we don’t have any first or second years? And as soon as they ask that question, it says, okay, well, the sixth-year associate does need to now have a coaching part of their job and does need to carve out—but what they’re coaching on is actually now different than the format of, this memo or brief needs to look like X. You’re now coaching on some of the higher-level legal theory, the nature of your coaching may be different, and you may have to be upskilled in that. And it may need to be a deliberate coaching, because it’s not just coaching in the way of, Hey, I need to coach you this so I can get a good first draft so I can move on, and the coaching is a byproduct. The coaching now, in many ways, is like the core of what you’re doing. And so organizations are thinking through, Hey, if that’s how we’re deliberately apprenticing the next level of experts, gosh, that requires managers to play a huge role.

MOLLY WOOD: I also really want to double click on the point you just made about that, you know, there’s a sense that entry-level jobs may not need to exist. And you make this great point that if they don’t exist, there are no future managers, no future executives. We’ve just got to change our thinking about that and be a little more creative. 

BRYAN HANCOCK: Absolutely. I mean, one of the things that we see generative AI doing a really good job is getting entry-level employees up to a basic level of proficiency. So Professor Erik Brynjolfsson at Stanford has done research that shows that in a contact center context, you’re able to dramatically get a new employee up to productivity, call it in two or three months. Because, through the generative AI technologies, they’re looking at the chat streams coming through and they’re getting suggestions of, I think the customer or client is looking for X. Here’s what it is. So now we’ve made it easier for entry-level employees to get up to a level of proficiency. I think the next question is how do we really define what their unique role is at that level? And how do we create the next level of experts, because one of the risks is the risk of being average. Where’s the creativity? Where’s the spark? Where’s the empathy? You know, how does that filter in? And that’s something that is still the human element. So we’ve got to think through how to really make that shine where the human can make a difference.

MOLLY WOOD: Which gets us back to this, the fostering human connection. You write about the rituals that foster that human connection—happy hour, weekly coffee dates. It sounds like you’re saying those are going to be actually even more important. 

BRYAN HANCOCK: When you’re able to take more of the routine tasks, whether they’re routine, automatable tasks that were automatable through good old-fashioned predictive AI or good old-fashioned robotics, or whether it’s some of the new predictable tasks, like writing the first draft of a legal memo. Once you get those done, what’s increasingly left is the human element. Okay, let’s actually sit down and let’s talk about this problem. We’ve got more time now. Or let’s figure out, okay, how do we actually make this change happen in our organization. It then frees us up to have the human connection with our team, with other people, to be creative, to be empathetic, to understand more broadly what’s happening. And so I think folks that used to be really, really good at cranking out first drafts but really, really grouchy are going to have a problem going forward. And folks who maybe had a hard time getting pen to paper, but once they did had the brilliant insight and could really connect with others, they’re going to be differentially advantaged. And if you think about what types of skills we need going forward, it may be less. Can we crank out this model? Because automation is going to be able to do that. Or can we make this presentation? We’re going to have ways of doing that too. It’s going to be able to say, Hey, let me take your idea, and where you’re coming from in your experience, and let’s see how we can work with it in combination with all these other things, get to a better answer for our company, for our clients, for our team, for you, and help expand it. That to me is exciting, but that is a very different vision of a view of a manager. 

MOLLY WOOD: I’m going to steal your word grouchy, and I want to dig in a little more about why middle managers have this bad reputation, in some cases, for being grouchy paper pushers. You say in the book that middle managers spend less than 25 percent of their time managing people and nurturing talent. Forty-three percent are burned out and bogged down by administrative tasks. One, how did this happen? And how quickly can AI start helping? 

BRYAN HANCOCK: Well, I think part of it, you see this in the movies and the comic strips of the ’90s. Where you’ve got Dilbert or you’ve got Office Space—

MOLLY WOOD: I’m thinking Office Space. That’s exactly where my brain was.

BRYAN HANCOCK: Do you have the right cover sheet for your TPS report? [Laughter] That’s what we think of as, in some ways, middle managers. But I think what we want to do is we want to flip the script of middle managers being the enforcers of bureaucracy to middle managers being the victims of bureaucracy. No one woke up in their career and said, Hey, I want to make sure that you’ve got the four right forms and this filled out in the right way. No one said that’s what they wanted as their career aspiration. It’s the processes and controls and ways of working of organizations that put middle managers in that area. And when you actually talk to middle managers, what they say is, Hey, I don’t want to go into these meetings either. What I want is I want more time to actually take our great ideas and take them into the world. I want more time to coach. I want less time approving travel. And so I think part of the message that we have in the book is, let’s flip the script of what we think middle managers want. Middle managers aren’t the ones that are causing the bureaucracy. They’re the ones that want to fix it. And so let’s give them the power and the tools to fix it. And generative AI is one of those tools because of what it can do. 

MOLLY WOOD: Amen, man. Okay, but let’s also be real here because there are some less-than-ideal managers out there. They definitely exist. Tell us about the impact that the not-great managers can have. 

BRYAN HANCOCK: We know that toxic managers are one of the leading causes of mental stress that happens in the workplace. We also know that being checked in on matters. And so at one point in the pandemic, a mental health organization surveyed folks and said, How many of you have had someone check in on you—HR, your manager, anybody? Forty percent said no one. And of those, they were 40 percent more likely to show some sign of mental distress. So we know that managers caring matters. And we know that bad managers have devastating effects on their teams—toxic managers in particular. And so managers play this critical role. If we think about it, we spend most of our time at work, most of our waking hours at work. Managers influence so much of your world, and we need to invest in making sure that they have the skills and abilities to make that time at work a better time. And if we have really bad managers that are toxic, we need to have ways of systematically finding them and weeding them out, because we can’t have people in our organizations having that kind of impact on their employees, that then ripples through to their families and their communities. I mean, managers play such a critical role in our life. And that’s part of, for me, what really animates the manager’s side. It’s not just that it leads to better company outcomes or better team outcomes or reduced turnover—all of that’s important—but it is one very tangible way that if we improved management across cohorts in the US and globally, think about how we’re affecting global happiness. 

MOLLY WOOD: How do we start to change talent management and HR with some of that in mind, because we’ve kind of alluded to this idea that we’re going to have to recruit differently. We’re going to have to think about what we want in a manager. And it’s—I’m sure that there are some organizations now that are optimizing in certain roles for people who are really good at TPS reports, because that’s been the job for so long. And this is a big, this is a step change. 

BRYAN HANCOCK: Absolutely. I mean, I think it’s a tremendously exciting time to be in HR, because I think organizations are fundamentally thinking through how to reinvent work across the organization. And one of the things that generative AI has done is it’s made most roles in organizations exposed to some form of automation or change as fundamentally as how tasks are done. And HR is the partner to think through, okay, as work is changing, what do we need in the future? Department by department across organizations, being that thought partner of, what do we need? And then thinking through organization-wide, what does that mean on the skills we need? And then what does it mean we have to do differently in our training programs? And how do we reinvent how we think about training? 

MOLLY WOOD: I love it. 

BRYAN HANCOCK: The other thing I’m excited about with HR is what generative AI can ultimately do for the function. And what I mean by that is, if we think about all of the individual applications of gen AI across the talent life cycle—hey, we can help organizations and managers think through where future sources of talent might come from. We can help them write job descriptions. We can help them ask better questions in interviews. We can help on career guidance. All of those things are things that a manager used to call HR for: Hey, can you help me do the first draft of this job description? Hey, can you run the report to see what’s happening for engineers of this type or where they’re coming from or evolving skill profiles—now, all of those, hey, can you help with things that would be more of the transactional and more of the initial level piece, the manager has the ability to do that or will soon in their own hands. You’ve given superpowers, HR superpowers, to every manager. 

MOLLY WOOD: I love it. 

BRYAN HANCOCK: So what does HR do now? Now they get to do what they really want to do: coach. Now HR really is living into—and everyone across the organization is really living into being the coach and being the true business partner. And so I see the technologies here being awesome because it’s great for the managers, really provides superpowers to them. And it lets HR live into, I think the purpose that everyone in HR wants to be, which is to coach on the people side of the business. 

MOLLY WOOD: What is something that you would recommend that any executive or business leader listening to this say tomorrow to their middle managers?

BRYAN HANCOCK: I think what I would encourage them to say is, thank you. We recognize we’ve asked you guys to do a lot. And in a world of work that is changing, you’re at the time you need to spend with your people, whether it’s on hybrid work or whether it’s in emerging technologies or other things. We know that that amount of time is just going up. And at the same time, we haven’t taken a darn thing off your plate. And what we commit to you is making sure that you have enough time to make this place more sustainable for you, better for our people, and ultimately help us navigate the future world of work in the way that is best for us all.

MOLLY WOOD: Bryan Hancock, thank you so much for the time. We’re really grateful. This was just a masterclass.

BRYAN HANCOCK: Oh, thank you for having me. I enjoyed the conversation. 

MOLLY WOOD: Thank you again to Bryan Hancock, global leader of McKinsey’s talent management practice. And that’s it for this episode of WorkLab, the podcast from Microsoft. Please subscribe and check back for the next episode, where I’ll be speaking to Peter Lee, Corporate Vice President of Research and Incubations at Microsoft, about how AI is revolutionizing the medical industry. If you’ve got a question or a comment, drop us an email at worklab@microsoft.com, and check out Microsoft’s Work Trend Indexes and the WorkLab digital publication, where you’ll find all of our episodes along with thoughtful stories that explore how business leaders are thriving in our new world of work. You can find it all at microsoft.com/WorkLab. As for this podcast, please rate us, review us, and follow us wherever you listen. It helps us out a ton. The WorkLab podcast is a place for experts to share their insights and opinions. As students of the future of work, Microsoft values inputs from a diverse set of voices. That said, the opinions and findings of our guests are their own and they may not necessarily reflect Microsoft’s own research or positions. WorkLab is produced by Microsoft with Godfrey Dadich Partners and Reasonable Volume. I’m your host, Molly Wood. Sharon Kallander and Matthew Duncan produced this podcast. Jessica Voelker is the WorkLab editor.