Is there still value in the role of managers?
For most organizations, the value isn’t found in eliminating the role—or ignoring the need for change. There’s a third path: reinvention. And AI can help.
Sue Cantrell
Lauren Kirby
Nic Scoble-Williams
Joan Goodwin
Andy Bayiates
Companies with strong management report up to 15% higher financial performance than those with weaker management,1 and evidence suggests managers may have more influence on an organization’s performance than any other group.2 So why are some organizations either eliminating the role completely or greatly reducing the number of middle manager roles?
This shift toward “bossless” organizations is likely being driven by a renewed focus on efficiency, agility, and worker empowerment with “zero distance” to the customer. Economic pressures have organizations looking to reduce costs, and artificial intelligence and other technologies are poised to take on many administrative tasks. According to one analysis, US employers were advertising 42% fewer middle management positions at the end of 2024 than they did in the spring of 2022.3 And research by Gartner predicts that through 2026, 20% of organizations will use AI to flatten their organizational structure, eliminating more than half of current middle management positions.4
These changes beg the question: Is there still value in the manager role?
Some key capabilities that managers often perform will always be needed—like coaching and development of their people. Today, the people being managed are in need of support more than ever due to the shrinking half-life of skills, the impact of AI, and the increasing pace of change.
And new capabilities will likely need to be developed in light of a changing landscape in the world of work. This suggests that managers may need to take on new roles as well. Managers, for example, are uniquely situated to redesign work to capitalize on the promise of AI, enable change and agility in the face of increasing volatility, and make judgment calls and decisions closer to the customer. It might not be the manager who performs these capabilities, but for most organizations, keeping these capabilities in the manager role makes the most sense.
For most organizations, eliminating managers altogether isn’t the solution. But neither is simply retaining or elevating the role of the manager as it has existed for over a century. Instead, organizations should seek a third path: reinvention of the role entirely. Because in an age in which work is increasingly complex and volatile, people-powered, and more AI-augmented, the traditional role of the manager may no longer be fit for purpose. We may indeed have fewer managers in the future, but what and how they do their work should evolve for the new world of work.
AI, along with new support structures, is a key enabler to this reinvention. Not only can AI automate much of the administrative work that takes the time of managers today, but it can also become a powerful ally in assisting them with focusing on and leading what matters most to organizational results:
The promise and perils of unbossing
As the role of the manager has come under increased scrutiny, the “unbossing” trend that involves thinning out middle management has emerged.5 Many organizations are now experimenting with eliminating middle manager positions, either as a bold new operating model based on self-organizing teams, or as an exercise focused on cost cutting and reducing bureaucracy.6 Others are significantly reducing layers of management and increasing the ratio of workers to supervisors.7 In an ideal world, this model gives employees more autonomy and control over their work while offering a positive narrative for shareholders that flattening management will lead to greater efficiencies and agility.
For some organizations this model works. But many organizations struggle with realizing the promise of it.
You can cut the roles, but humans will still lead and be led, even without the formal titles. This can create “shadow leaders” and unclear decision rights that slow the organization rather than create efficiencies. Organizations that have attempted new forms of unbossing—for example, holacracies and self-organizing teams—often found that a decentralized, bossless system ended up creating its own form of bureaucracy or other complications.8 One foundational study revealed that flattened firms with fewer middle managers typically exhibit more control and decision-making at the top—the opposite of what was intended to reduce costs and push decisions downward to improve agility.9
What is a manager, anyway?
In many organizations, leaders struggle to clearly define what a manager even is. Managers—those who oversee direct reports and act as a bridge between executive strategy and front-line execution—are all too often a catch-all role in the organization. They are constantly pressured to be project supervisors, change agents, coaches, administrators, problem solvers, and more. And all of this on top of doing the work itself.
Nearly 40% of their time is eaten up firefighting today’s problems or on administrative work (figure 1).
It’s no wonder that managers are often overwhelmed, frustrated, and burned out—one research study suggests that they’re the most depressed and stressed category of worker.10 Case in point: 40% of managers said their mental health declined when they took on a managerial or leadership role. And 72% of workers in Japan don’t even want a management position,11 what was once the highly sought-after path toward upward mobility has lost its appeal for many around the world.
Yet most managers feel their organizations are doing very little to support them. Our research shows that organizations recognize the importance of better supporting managers and reinventing their role but are struggling to make progress (figure 2). According to our 2025 Global Human Capital Trends survey (see “Methodology”), 36% of managers felt they were not sufficiently prepared for the people-manager parts of their role and 36% do not believe their organization has implemented technology solutions to help them perform these roles.
Managers need support and development—especially younger managers who earned promotions based on their achievements as individual contributors, but who haven’t yet developed the most important skill needed to meet all three new capabilities for the reinvented role of the manager: judgment.
The key capability needed for tomorrow’s middle managers: Judgment
In an era in which the technical and functional work can increasingly be performed by AI, and in which work is increasingly fluid and complex, the most important skill managers will likely need is the art of judgment—or the ability to make difficult decisions where there are no cut-and-dry answers or when the information available is insufficient. Judgment is the ability to understand organizational history, culture, and context and use human capabilities like empathy and imagination to guide discretion and to improvise rather than simply apply rules.
Judgment isn’t something that can be learned from a textbook—it requires experience and practice. Yet increasingly, organizations are finding it difficult to supply that experience to workers so they can develop into strong managers.
Judgment is the foundation for all three new capabilities for the reinvented role of the manager (figure 3)—the ability to have the empathy to make the right calls needed to coach an increasingly diverse workforce; the creativity and wisdom to redesign work and unlock human performance in the unchartered territory of an AI-augmented world; and the ability to exercise strategic problem-solving in the face of uncertainty.
What’s the role of the manager?
Traditionally, the role of the manager was to tell workers what needed to be done, observe their output, and reward or sanction workers accordingly—often doing the work alongside their teams.
But the role is shifting. Managers are increasingly becoming leaders of people who use judgment to:
- Develop, coach, motivate, and nurture people.
- Redesign work, reallocate resources, and optimize human and machine interactions to drive human performance in the age of AI.
- Enable agility, strategic problem-solving, and innovation.
This redefinition includes both “player-coaches”—those who do the work alongside their people—and “orchestra conductors” who lead from the front.
Judgment, in fact, is the key skill needed by managers to resolve tensions (figure 3). They will need to continually balance the necessity for organizational stability and control, while also enabling and driving organizational agility and empowerment. Likewise, managers are in a unique position to spot and realize the potential of their people, while also working to achieve predictable outcomes and minimize risk.
The three critical capabilities managers need and how organizations can support and build them
What are the new capabilities of the reinvented role of the manager, and why are they important in today’s world of work? And how do we use AI and other organizational support structures to build them?
1. Develop, coach, motivate, and nurture people
Coaching and development are some of the most important roles a manager can play. Our 2025 research suggests that a manager’s ability to lead, inspire, and engage the workforce is one of the largest influencers in maintaining a productive workforce. The most effective development and motivation happen at a one-on-one level between managers and their people.12 Other Deloitte research shows that effectively developing your direct reports can boost their performance by as much as 27% and make them 1.5 times more likely to exceed their goals.13 Further, 67% of employees in our 2025 survey say that their manager knows best what motivates them.
Consider one life sciences organization, which conducted an experiment to understand the impacts of increasing the span of control for managers supervising field representatives. Specifically, this organization conducted a small project in which it nearly tripled the number of field representatives for which a manager was responsible. The findings of this experiment uncovered that while managers were able to absorb the increase in the number of employees from a day-to-day operations perspective, this came at the cost of the human elements required (e.g., coaching, people development), resulting in lower employee engagement and increased turnover. As a result of this experiment, the organization was able to find the optimal span of control that did not jeopardize the critical role that managers play as people leaders and coaches.14
In consulting organizations, employees have long had “coaches,” who help workers grow and develop, and separate project leaders. In a similar vein, Telstra, an Australian telecommunications and technology company, split the role of the manager into two distinct roles: leader of people and leader of work. Leaders of people focus on ensuring their workers have the skills and capabilities needed for the business and help them chart paths to other parts of the business to avoid silos and further integration. Leaders of work, on the other hand, don’t directly manage people or control budgets; they’re responsible for leading project teams to ensure deliverables are on time and on budget.15
How organizations can support managers in building this capability
Organizations can use AI to help managers in this role. AI can offer managers real-time performance insights, for example, to help them become better coaches. Insights can include data on worker sentiment; how, when, and with whom workers work; how effectively employees are collaborating, and the outcomes of workers’ work—to name just a few.
At Intel, for example, managers use AI to help guide them in providing development opportunities and feedback to their workers. Christy Pambianchi, Intel’s chief people officer, says, “Having a built-in [AI] coach for the manager can help give them insights about the team that they’re managing and the activities that they’ve taken on.” Although AI can help, Pambianchi suggests that AI isn’t a replacement for the manager role. She explains, “Empathy, support, connectivity, psychological safety, commitment to the enterprise—those are all things that I think only a manager and leader can help create, and co-workers can create for each other.”16
As workplaces combine human and robotic workers, AI tools can also enable managers to better measure individual performance of both robots and humans, analyze their errors, and improve performance.17 Managers in a repair facility at one electronics company found that many employees followed a regular pattern of higher productivity in the morning, with substantial variance in afternoon productivity and increased error rates as they rushed to meet their daily quotas. Managers could newly see this due to the precise data provided by the robots. As a result, managers were able to better coach their workers, reduce errors, and improve their performance.18
Other technologies can help too. At one telecommunications company, managers can develop better people development skills by practicing difficult conversations with an avatar in virtual reality, with AI analyzing their data to act as a coach to refine their skills.19
In addition to using AI and other technologies, organizations can also support managers in being better people coaches and developers by:
- Requiring training, development, and accreditation of managerial coaching and development skills.
- Creating opportunities to practice and learn how to have difficult conversations and make challenging people decisions.
- Assessing manager performance on coaching and development, and tying monetary rewards to the assessment.
- Acknowledging great coaching and development through recognition programs (e.g., granting more time off, public recognition, badges, etc.).
- Building a culture of growth and development from the top.
- Helping managers learn how to customize the way they develop people by tapping into individuals’ unique motivations, skills, and passions.
2. Redesign work, reallocate resources, and optimize human and machine interactions to drive human performance in the age of AI
AI is transforming work, with more workers working with AI than ever before. Studies suggest that global use of generative AI has jumped from 55% in 2023 to 75% in 2024,20 and Deloitte research reveals that more than eight in 10 workers now interact with AI at work.21 As workers become increasingly intertwined with AI, managers will need to take on a new role of redesigning work and roles, helping their people better collaborate with smart machines, and reallocating resources to perform work—whether that be human or machine.
Managers are well positioned—being close to the work but not too close—to help redesign work and jobs. For example, one mining company introduced fully automated, remotely operated trains to transport minerals, retaining drivers to assist if the automation technology failed and redesigning their roles. Although their knowledge was critical to the automation process, managers realized that drivers suffered from lack of role clarity, autonomy, and stimulating work, often performing low-skill work like polishing trains and feeling less confident in recovering broken-down trains since they no longer had opportunities to drive. Drivers’ roles were expanded to include more meaningful tasks—such as training recruits—and they were allowed to rotate to different ports to keep the work varied.22
Also, consider the role managers played for one retail fashion organization in helping workers collaborate better with AI to create better outcomes. When AI was introduced to help fashion buyers select which styles customers would want to wear next season, managers noticed the buyers often didn’t adopt AI’s strategic recommendations. The fashion buyers felt that the AI recommendations took away the creative work of selecting new styles—the favorite part of their roles. Instead, they became profit optimizers, required to test various collections with AI to identify which collections would likely make the most profit. Managers helped the fashion buyers more effectively collaborate with AI by redefining the buyers’ identity as “visionaries” who strategize about new collections. As a result, the buyers’ resistance faded and trust in their AI counterparts increased.23
Managers also have an important role to play in helping others develop human capabilities like judgment, empathy, and imagination to work effectively with AI, as well as mitigating the risks of AI. They will also need to increasingly oversee AI, in addition to people. In the future, managers may need to manage multiple AI agents working together in an agent ecosystem. At organizations like JPMorgan Chase, the company is already developing autonomous agents that perform complex multistep tasks.24 George C. Lee, co-head of the office of applied innovation at Goldman Sachs and the firm’s former chief information officer, argues in his Fast Company article that managers need to develop “machine capital management.”25
How organizations can support managers in building this capability
Ironically, organizations can use AI itself to help support managers in their new role of optimizing work for AI and human collaboration.
Organizations can use AI to democratize process redesign, empowering managers and employees to use AI to foster continuous improvement and large and small process or work redesign.26 One manager of research engineering at NASA, for example, used commercially available AI software to reinvent the design process for specialized one-off parts, with workers collaborating with AI to produce complex structure designs in just hours rather than months.27
AI can also help managers make decisions about which resources should perform which work. Organizations like Nestlé and MetLife, for example, use an AI-powered technology that democratizes workforce planning—giving managers access to the data and insights regarding workforce implications of AI or digital transformation, for example, to help them make better resourcing decisions.28
In addition, organizations can support managers in this role by:
- Helping managers redesign their own role in light of AI by shifting the weight of “doing” off of managers so they can focus on how the work is done.
- Supporting risk-taking by creating a safe environment for AI and other work redesign experimentation.
- Giving managers open information about the organization’s financial and strategic goals as well as customer data to provide the right context for work redesign.
- Providing education, training, and development on AI—including what it can and cannot do, responsible use of AI, and how workers can best engage with AI as a teammate and collaborator.
- Developing managers’ ability to make the important judgment calls needed to make trade-off decisions regarding who performs the work and how.
3. Enable agility, strategic problem-solving, and innovation
In the past, managers would take the directives and strategy set by senior leaders at the top and translate it into actionable plans for their direct reports. But in today’s world in which speed and responsiveness rule the day, managers will need to continuously strategically pivot in response to rapidly changing conditions.
Research by INSEAD, for example, found that 80% of transformation programs led by middle managers succeed, compared to only 20% of those led by senior management.29
Managers, in fact, are a key to enabling a more decentralized, responsive organization—one of the key goals that “bossless organizations” aim to pursue. Managers can empower and unblock their people, instead of directing them in a bureaucratic traditional command-and-control organization. This enables the kind of decision-making at the edges of the organization that lets organizations shape-shift at will.
At the Chinese e-commerce company Handu Group, for example, the role of the manager has been radically reinvented in its core brand HStyle to reflect how work is done through networks to achieve greater agility and market responsiveness. In an internal entrepreneurship model, team leaders guide small, agile teams with decision-making power to develop and sell products. The organization incentivizes team formation and mobility, rewarding original teams for training departing members and providing residual bonus payments to former team leaders, fostering adaptability and innovation.30
And at French tire producer Michelin, the role of the plant manager was redefined from being a boss to being a mentor, shifting their role from “deciding” to “enabling” through a focus on activities like building team skills and resource planning. The “responsabilisation” (French for empowerment) increased the authority and accountability of workers on the front lines—letting them play bigger roles in areas such as safety, quality, staffing levels, scheduling, and even participating in high-level planning meetings on topics like plant design and yearly targets. Managers were taught to “lead from behind” and develop judgment skills like emotional intelligence to support their teams, leading to half a billion dollars in manufacturing improvements.31
Managers can also play an important role in connecting workers to others across other functions or workforces, something that can drive greater agility and empowerment. According to Gartner research, the manager coaching style with the highest impact on employee performance is the “connector” who connects workers to experts in the organization based on the manager’s deep network and understanding of workplace culture and dynamics.32
How organizations can support managers in building this capability
AI-driven language models can empower managers to grant more decision-making authority to workers by observing workers’ decision-making effectiveness and making recommendations. Klick Health’s machine-learning technology called Genome, for example, analyzes every project at every stage in the firm, suggesting rewarding more responsibility to people who have demonstrated consistent competency and success. The AI tracks every decision made in the firm and the context in which it was made.33
AI can also help managers make better strategic decisions. Sanofi uses an AI application called Plai to synthesize companywide data across key metrics of integrated business plans to help managers of teams in finance, manufacturing and supply, and quality make better decisions—allowing managers to have better discussions about performance and make decisions based on data like trends and potential root causes.34
AI can even suggest key performance indicators to inform strategy, enabling smart KPIs powered by AI to become sources—not merely measures—of strategic differentiation and value creation.35 At shipping and logistics company Maersk, for example, front-line managers were conflicted: Should they define performance based more on speed of transportation or schedule reliability? Although managers assumed prioritizing speed was most important, AI helped them make the counterintuitive decision that going more slowly would reduce costs and result in more on-time arrivals.36
In addition, organizations can support managers in this role by:
- Connecting your best connectors. Focus on drawing better connections among managers within your organization, so they might better solve strategic problems and reinvent together.
- Empowering decision-making. If you want your managers to be the catalysts for your agile response to problems, then those managers need to be empowered to make decisions. Consider how you can push decision rights down in your organization.
- Developing managers’ judgment skills in strategic decision-making and problem-solving by giving them opportunities to practice with feedback.
- Helping managers learn how to develop microcultures and micro strategies to drive performance within their sphere of influence.
The role of the manager is inevitably changing. The decision before us is: How do we best reinvent the role to help organizations and workers embrace the pace and change and thrive? It starts with recognizing the importance of the three fundamental capabilities discussed above. The term “manager” isn’t what’s important here—what’s important is ensuring that these core capabilities are embedded in the organization’s DNA and that the organization is helping people excel at them.
Regardless of which path works best for your company’s culture, embrace the opportunity to reinvent the role of the manager. Chances are, they’re a vital and valuable key to your organization’s future growth and profitability.
Research methodology
Deloitte’s 2025 Global Human Capital Trends survey polled nearly 10,000 business and human resources leaders across many industries and sectors in 93 countries. In addition to the broad, global survey that provides the foundational data for the Global Human Capital Trends report, Deloitte supplemented its research this year with worker, manager, and executive-specific surveys to uncover where there may be gaps between leader and manager perception and worker realities. The survey data is complemented by more than 25 interviews with executives from some of today’s leading organizations. These insights helped shape the trends in this report.
