Digitale Transformation: when KPIs & Reports Supercede Middle Management

In Startups, the goal has always been to keep the head count low. This is called a ‘Lean Startup’. This approach has long since found its way into larger companies. Those who want to remain competitive in the face their (more)digital competition have to make hard calculations between requirements and strong staff growth.

Thanks to digitalisation, many company areas can be supported with technology and so looked after by fewer staff members than would have been possible ten years ago.

It’s been a long time since this has only effected administrative positions. If you’re just thinking about the picker in a logistics centre being replaced by self-driving shelves, robot arms, and transport systems, you’re thinking too short.
Middle management is also affected: data is the new decision maker.

Here, it is also mostly startups which implement the new possibilities and largely do without middle management. So it would not be surprising if companies did not follow suite.

When information flows on its own, you don’t need the middle man anymore

Looking at the traditional role of middle management, it quickly becomes clear that there is a huge amount of potential for automation and keeping down staff numbers. At the end of the day, management is responsible for steering the flow of information.

In their function as purveyors of information they pass down the ideas, strategies, and plans of top management in the form of subtasks, reports, (partial)results, and pass up external projects. This is why they have to bring good data management and analysis skills to the job.

In human terms, they’re caught in the middle between the problems of the staff and the executive level.

But what happens when they’re already networked with the help of agile working methods and collaboration tool, working processes are digitalised, and progress can be measured (above all) with the help of KPIs?

You can get some idea from the by Windeln.de (held at the K5 2013):

BI tools are now cheaper than specialists

Hierarchies used to live off communication and information barriers. These are increasingly disappearing. These days, investing in a business intelligence solution is cheaper than investing in the corresponding number of personnel. There is no longer a need for managers dedicated to interpreting numbers in order to build a basis for top management decision making.

Analysis required for the early data scientists, partly even IT support and develop effort can now be performed directly from the cloud. Attractive graphic interfaces make it simpler than ever to draw conclusions from the numbers – for all staff members.

No wonder the market is growing for BI software. Apart from old hands like SAP and IBM, there are more and more startups like GoodData. Of course Amazon is also active in the market. According to its own numbers, the cloud-based data warehousing service “Redshift” is the fastest growing service they have ever launched.

Middle management soon only staff management?

Of course this isn’t the end of middle management. There is still a need for specialists, who can say what the data means for a company and support decision making. However, this is now only focused on highly complex questions and is not needed in daily business.

From a people perspective, management will still be required. Their function as team leader, knowing staff problems, supporting staff in their professional development, and motivation is still a core task.

Data can’t do this (yet).