Digital Economy Dispatch #260 -- In Praise of Middle Management

I’m getting a little annoyed by the continual stream of reports about how AI is laying waste to today’s jobs. According to the common narrative, AI will destroy entry-level jobs and hollow out the corporate hierarchy, with middle managers (those much-maligned figures sandwiched between strategy and execution) being first against the wall. After all, if AI can summarise reports, track performance metrics, and coordinate workflows, what exactly is left for them to do?

This story is compelling. It's also wrong.

The reality emerging from organisations moving down the path of deploying AI at scale tells a different tale. Yes, there is a major shift in the skills required in organizations. Administrative tasks are being displaced. Yet, middle managers are becoming more essential than ever. They're not AI's victims. In fact, they may well be its primary beneficiaries and most effective champions. But only if we can enable them to focus on what really matters in an AI-augmented world: the people.

The Liberation Dividend

Let's be honest about what middle management has become in many organisations: a grinding cycle of administrative coordination, status updates, and information brokering. Talented people spend their days synthesising reports from below and translating directives from above, their strategic instincts dulled by the sheer volume of operational “busy-work”.

The data confirms this frustration. McKinsey research reveals that middle managers currently spend almost half their time on individual contributor and administrative tasks, with only about a quarter devoted to people-related activities. That's an extraordinary misallocation of experienced talent.

AI changes this equation fundamentally. When routine information synthesis, scheduling coordination, and progress tracking can be handled automatically, something remarkable happens: Middle managers get their cognitive bandwidth back. The administrative drudgery that consumed their weeks can increasingly be delegated to AI systems, freeing them to do what they were actually hired for -- leading people, solving complex problems, and driving organisational change.

This isn't speculative. A Harvard Business School study tracking over 50,000 software developers found that generative AI is already helping professionals take on tasks once reserved for managers, freeing those managers from project coordination burdens to focus on higher-value work. As Professor Frank Nagle observes from his research, "You get into a job because you love the core work. And then, as you become more senior, you start doing more management work. This is showing that AI helps people get that balance back closer to what they would prefer it to be."

Organisations experimenting with AI-augmented management are discovering that their middle managers, unburdened from administrative overhead, are generating insights and initiatives that previously never surfaced. Then, instead of spending many hours compiling status reports, auditing actions against incoherent company policies, or endlessly chasing project tracking information, they can now spend that time actually talking to their team, understanding blockers, and identifying opportunities to improve quality and increase performance.

The Translation Layer

At the root of the comments that "AI will replace middle managers" is a misunderstanding about the key role they play in driving (or obstructing) project delivery. They are the critical human layer responsible for synthesizing strategic goals with ground-level realities, managing exceptions, and ensuring cross-functional alignment. The essential tasks require judgment, context, and interpersonal skills beyond mere data processing.

The effectiveness and health of the middle management layer serve as a vital predictor of an organization's overall performance. When this crucial tier is healthy and functioning effectively (with managers engaged and strategically focused) the organization is well-positioned for success and strong project delivery. Conversely, when the middle management layer is functioning poorly due to bottlenecks, administrative overload, or a lack of clarity, the entire system struggles, and organizational coherence and performance quickly fall apart.

Senior leadership can set strategy. AI can process information and execute defined tasks. But neither can navigate the messy, contextual, deeply human work of translating strategic intent into operational reality. That translation requires understanding both the vision from above and the constraints from below. It requires reading the room, knowing which battles to fight, and adapting corporate mandates to local conditions.

This is precisely where middle managers excel, and it's work that becomes more valuable, not less, as AI capabilities expand. The gap between what AI can theoretically accomplish and what it actually delivers in complex organisational environments is substantial. Bridging that gap requires experienced practitioners who understand both the technology's potential and the organisation's realities.

Middle managers are uniquely positioned to identify where AI can add genuine value versus where it creates more problems than it solves. They know which processes are genuinely ripe for automation and which require human judgment that no current AI can replicate. They understand the informal networks and unwritten rules that determine whether any initiative succeeds or fails.

McKinsey's research points to this evolving reality. In a gen-AI-enabled world, middle managers could significantly reduce hours spent on non-people-related activities and reallocate that time toward supporting direct reports and engaging in broader strategy concerns. The middle manager's job will evolve to managing both people and the use of this technology to enhance their output. In other words, AI becomes another capability to be orchestrated, and orchestration is precisely what effective middle managers do.

As a result, the organisations seeing real returns from AI aren't those that deployed it to replace human judgment. They're those who deployed it to amplify human capability, and middle managers are where that amplification matters most.

The Path Forward

None of this happens automatically. The middle managers who thrive in an AI-enabled organisation won't be those who cling to information gatekeeping or administrative control as sources of authority. They will be those who embrace AI as a tool for enhanced effectiveness and use their liberated capacity to provide what no AI can: genuine leadership. Is that what we’ll see in practice?

Maybe. But only if there is investment in training, in tools, and in organisational redesign to allow middle managers to operate differently. It requires senior leaders to recognise that their middle management layer isn't overhead to be eliminated but capacity to be enabled.

The companies that understand this will build formidable competitive advantages. Those who mistake cost-cutting for transformation will discover they've eliminated the very people who could have made their AI investments pay off.

Middle managers have endured decades of derision. Perhaps it's time to recognise them for what they actually are: the leaders who translate intention into action, the bridge between strategy and execution, and increasingly, the key to unlocking AI's genuine potential across the enterprise.