The future of…

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The future of managers

Ian Pearson, July 2001

When I joined BT 15 years ago, we had lots of clerical and secretarial support, but now we have very little. We can all type quickly for ourselves, and tools such as email and the intranet save us a great deal of time, so we don't need as many clerks or secretaries now. We can administrate faster and more effectively using electronic tools than we ever could using clerical intermediaries. Therein lies a clue to the future of administrative management. Most managers will ultimately be unnecessary too.

The internet notionally allows us to fragment an institution into its component parts and reassemble them using the newest tools, without any regard to the geography of these parts. Of course, physical components are not as geographically independent as information ones so we have to use some common sense, but when we are done, the new institutional structure will often bear little resemblance to the original. The tools available now and in the near future will allow us to automate a good proportion of the tasks, streamline authorisation lines and generally disintermediate the entire management infrastructure of a company. Some companies won't be needed at all, since this fragmentation and re-assembly will occur at an industry-wide level, not just within a company.

If we look at a large manufacturing company such as a car manufacturer, the manufacturing takes place in large factories. Matter can't be sent across the net, so the physical manufacturing is not directly affected by the net - cars will still be assembled in factories in decades time. What is affected is the whole of the design process, the means to supervise the manufacturing, the logistics associated with manufacturing, the control and supervision of the tools, and all the other management processes in the company, from personnel to the board. These are the information processes and departments, and are where the bulk of the value lies today, even in a manufacturing company. They can be implemented anywhere, or distributed around he world, wherever the most appropriate staff can be found at the most attractive price. Restructuring could be profound. For companies that aren't making physical objects, the changes will be even larger. Virtual companies will comprise a very small core of key staff with top level skills. Other staff can be bought in on a project by project basis. So we need a few ideas creators, a few assimilators to package their ideas into useful and desirable products. When people still don't buy them, we need expert marketers. Various new roles will spring into existence in this restructured economy - guides, guilds and so on. The elite will thrive in such an environment, often working for several companies at a time with high rewards. Everyone wants to employ them to gain a market edge. But the bulk of people are effectively commodity items, with a global supplier base. There will be enough work to ensure that most people will still be employed, but the work will be volatile.

BT has recently outsourced most of its routine personnel functions to e-PeopleServe in the same routine way as companies outsource call management to call centres. Running a personnel department is not a core business for a telecomms operator. If we take this to the ultimate conclusion, we could concentrate all our efforts on our telecomms services provision, with almost all the administrative functions outsourced to specialist companies who provide this role to many other companies as well as BT. This is a very likely future. Companies that specialise in personnel management can develop efficient tools that automate most of the routine tasks, and employ as few people as are necessary to deal with those tasks that are still beyond the scope of artificial intelligence or simple transaction processing. When this has run its course, there will be far fewer personnel managers in our world than there are today, and those that remain will generally be concentrated in a few personnel management companies. An entrepreneur can set up a new company without worrying about all the administrative functions surrounding managing staff. He or she might just discuss the required personnel policy with a dedicated company who would then implement it. In a short while, we will see a similar trend with other administration departments such as accounts management, and even in professional services such as marketing, research, and design.

All this implies a huge overhaul of administrative management. Much of it won't be needed, and the rest will be restructured. We will be competing for our share of the global pie with many other countries. For individuals, it will mean constant re-skilling and lifelong learning as they try to keep up with the next generation of electronic tools. Provision of advanced artificial intelligence tools will mean that an individual will be able to do work that may have been to difficult previously. While companies may look at this as de-skilling jobs, it is equally validly up-skilling the person. A junior clerk may now be capable of a middle management role, and many middle managers might make use of the extra skills from AI to become an entrepreneur.

Certainly, the e-business environment will include a great deal of AI in a few years time. Data mining software will automatically discover market niches that need to be filled. With automated personnel management, and databases full of people with the right skills, and physical resources in the right places, putting together an automated virtual co-operative will soon be possible. A group of freelancers will be brought together by this software to fill the market niche. Instead of a company with its departments full of managers, we will have freelancers and software. Virtual companies won't usually be able to compete with such efficient structures, and of course the freelancers will keep the gains for themselves, with few overheads and no shareholders to pay. But the freelancers won't be administering anything any more, they'll be using whatever other skills they might have, amplified by artificial intelligence.

So the future for administrative management seems quite simple. The most elite will be retained as a core of efficient virtual companies. Some more will be up-skilled and see their market value increase. They will be pulled lucratively together by software administrators into virtual co-operatives, or become fully fledged entrepreneurs. The rest - probably the bulk -will either take early retirement or be absorbed into commodity administration farms. Remaining an administrator in a conventional company won't be an option for any but the elite. The companies of this future world will have to be lean and mean with the smallest core staff possible, farming out administrative tasks as far as possible to software based specialist companies. Most administrative management will be seen as an overhead that should best be replaced by software.