Could machines replace middle management?

In 1964, Isaac Asimov, wrote about a visit to the World’s Fair of 2014:

“The world of A.D. 2014 will have few routine jobs that cannot be done better by some machine than by any human being. Mankind will therefore have become largely a race of machine tenders.”

According to Carl Benedict Frey and Michael A. Osborne, two researchers at Oxford who researched 702 current occupations, approximately half (47 percent) are at risk of going the way of the telephone operator within just a decade or two.

In their book, The Second Machine Age, authors Brynjolfsson and McAfee maintain that the combination of massive computing power, comprehensive networking, machine learning, digital mapping and the “internet of things” are bringing about a full-blown industrial revolution on the same scale as the transformations brought about by steam power and electricity. But whereas those earlier revolutions complemented human (and horse) muscle, the new one will replace human cognition, in that computers will ultimately do work that involved employing people to do information-processing tasks.

We’ve already seen many jobs automated or outsourced with widespread globalization and the evolution of technology. Therefore none of the above predictions should be shocking anyone. However, jobs that were traditionally automated or outsourced were usually of a manual and routine nature. When will we come to the point where we can automate jobs that are highly cognitive and non-routine, such as managers? Guess what: We already are.

I recently came across a provocative post by Peter Reinhardt where he illustrates numerous examples of companies that are creating software layers to manage people in industries that were traditionally purely based on human services. Reinhardt lists popular examples such as Uber and Lyft who created software layers in the taxi industry, 99designs in the visual design industry and Homejoy in the cleaning industry. These companies are now employing armies of human workers, optimizing their output, productivity and quality while driving prices down – all without managers to direct those who are performing the jobs. “Management” is almost completely done by machines and algorithms.

The software layer between the company and their armies of contractors dispatches a human to perform a particular job or task with a very prescriptive level of detail that ensures consistent and measurable execution while effectively eliminating middle management. Your Uber driver is working for a machine: A machine is dispatching them. A machine tells them the exact route they should take, a machine pays them; and apparently, the machine can even fire a driver if they break rules or let their ratings significantly slip.

As Reinhardt thoughtfully points out, humans are on the verge of becoming literal cogs in a machine, completely anonymized behind an API that controls and monitors their every activity. While there may be a great level of autonomy in the freelance economy that entices people to join these software layers, workers are entering a dichotomous workforce, which is effectively a dead-end with little opportunity to progress, learn, or develop skills that invest in their future.

Eliminating middle management certainly takes many variables (and of course, cost) out of the equation. However, it is merely an interim step in eradicating human labor from the value chain of some of these industries altogether.

With management being done by software, the door is now wide-open for complete automation once the respective technologies become available or go mainstream. Will Uber or Lyft keep any drivers once self-driving cars become mainstream? Likely not. Will Amazon continue to doll out its delivery business to FedEx and UPS once drones become a reality? Likely not. Companies like Lowes are investing in robots as store assistants – will they need middle-managers to manage those robots, or will they be managed by software layers in the cloud?

While this opens up a whole new world of possibilities and opportunities for new ways of doing business, it really begs the question for those of us who are in management roles.

Are we ready for this? Could machines and artificial intelligence eventually replace everything we do?

This article is published in collaboration with SAP Community Network. Publication does not imply endorsement of views by the World Economic Forum.

To keep up with the Agenda subscribe to our weekly newsletter.

Author: Reuven Gorsht is a contributing writer for SAP Community Network.

Image: The hand of humanoid robot AILA (artificial intelligence lightweight android) operates a switchboard. REUTERS/Fabrizio Bensch.