Managerial capability: How managers can add value in an increasingly tech-driven world

In the last decade-and-a-half, Indian businesses have mostly seen a boom, interspersed with some brief punctuated moments of a downturn. The buoyant nature can be understood when we look at the GDP growth percentages from 2003 till 2019. There have been periods of straight five years where the growth has been more than 7.5 percent, and except in 2008, the growth has always been upwards of 5 percent.

The growth story has impacted the nation, society and businesses in a lot of ways. What I would like to focus in this article is the area of managerial capability.

Looking back at the era of high growth

In this era of high growth where domestic companies wanted to adopt international standards, methods of working and expanding their business, global MNCs wanted to set up their presence in India which led to a sudden demand of leaders and managers across levels. As the growth continued over the years, the managers got promoted quickly, and if a company couldn’t offer that, the employees had the opportunity to join another organisation that was either setting its base or expanding its operations. This also led to significant year-on-year overall salary increments – from 2007 to 2016 (with a few exceptions), the raise has been straddling between a high to low double-digit growth. Even at the beginning of 2020, some consulting firms expected that India Inc will witness a 10 percent salary increase.

The role of managers

When we study the managerial world of last 15-17 years in India, we see a lot of aggregator roles being created, mostly to break the span of control. The core capability of managers in a lot of businesses was to manage small to big teams using some lag indicators with the help of different types of dashboards to drive results. Also, they replicated some tried and tested methods and best practices in their own departments or functions, e.g. someone who was six-sigma trained, would invariably start few six sigma projects.

The imbalance on the demand and supply side of the available pool of managers also led to the phenomenon of creation of pseudo job titles where one role was broken into three to four job titles, to give a feel of career progression so that the organisations could hold on to their managerial talent. Overall, we had a group of managers, who in some cases, had an exaggerated sense of contribution and capabilities. In the name of specialisation, they worked in an extremely narrow area of professional contribution (in due course of time, some of these areas lost the tag of specialisation or relevance as technology, supply and business models evolved).

There was a certain percentage of managers who leveraged this high pace growth scenario, questioned their real contribution and constantly upgraded themselves as they climbed the rungs of the corporate ladder.

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The downturn

All of this worked well in a certain kind of economic, business, and technological context. However, as the technologies evolved, business models changed, and even the idea of India as a huge consumer market got refined. A sense of realism dawned and some MNCs, after trying their level best to leverage India as a market, realised that it has its own unique set of challenges and therefore, either pulled out or reduced their operations. The changing situations led to difficult questions being asked, that resulted in tough choices. The managerial capability was no exception; it was under tight scrutiny and the gaping gaps were evident.

Some industries started feeling the heat, they started assessing the cost and contributions with a fine toothcomb, case in point is the automobile sector last year. And then the entire globe was hit by the pandemic. While a huge number of businesses struggled, the pandemic in one go pulled the carpet and revealed all the chinks in the managerial armour.

For a lot of managers, it was a whole new set of demands that they now had to fulfil. They now had to get the job done virtually, be a coach, advisor and morale-booster, make sense out of uncertainty, define reality and give hope, adapt to frequent changes, help teams renavigate new and upcoming challenges, take proactive measures by sensing the environment, and also display confidence to take a few bold timely steps and at times, clarify and even oppose the HQ driven policies and suggestions. The aggregators and number pushers were almost clueless in such a situation.

Adapting to tech

While a lot of aggregators were struggling to remain afloat, a new wave was building up over the years, and occupying the space of business and corporates. This was about technology in its various sophisticated avatars – AI (Artificial Intelligence), ML (Machine Learning), Digitisation, IoT (Internet of things) etc. With its phenomenal benefits, it became the necessity in almost all the organisations. A lot of these technologies require huge amounts of data and it fosters as well as bolsters the culture of data-based decision-making. So, now we have tools that tell us a lot about our customers, vendors, employees, suppliers etc, enabling organisations to operate at leaner levels and build transparency.

However, it also creates the possibility of reducing the opportunities for managerial judgment, and if not checked, can create possibilities of converting managers into data aggregators by handling situations using mathematical calculations, and with loads of data and tools – all the while presenting option(s) that have a greater/better probability of success. In such situations, managers will resort to relying on data and processed outcome, and since a huge portion of managerial work is in the domain of efficiency, this may serve them well in the short term.

The consequence of managerial judgment on a decline and getting atrophied can be huge, especially as we expect today’s managers who occupy higher-level roles and positions to deal with uncertainty and ambiguity. The context of work at higher levels is largely in the domain of effectiveness. It requires timely application of judgment, which is all about making sense and taking a decision where past knowledge and experience is of no/little value and there is no/little data available (or perhaps in some way, the available data is contradictory).

In a business world which is prone to much larger and frequent disruptions, this is and will be a real strategic differentiator, and one must acknowledge that even the best of Artificial Intelligence (AI) driven workflows work extremely well within structured data, however, the aspects beyond that need to be understood, assessed, and incorporated. Example, data about vision statements, company strategies, corporate values etc requires human judgement.

The one thing that the evolution of technology tells is that with time, it becomes economical and therefore available to larger masses. This also means that the value of professionals in a world of high-end technology, and prediction-based and AI-driven data processing would be to contribute in complementary ways that add value by enriching or questioning the output or possibilities generated by the tech/data tools and platforms. This is possible only when professionals are encouraged and trained to exercise judgment, otherwise, we may create a generation of managers who are dependent and relies on sophisticated tools and reams of processed data, but aren’t adding differentiated value.

This developmental need should be acknowledged and addressed by design and not left to chance, else it may just turn out to be another version of history repeating itself, often in the managerial capability world!