If AI replaces your manager, maybe they weren’t really managing – hrleader.com.au

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The irony is that, after all the predictions about AI replacing managers, we may discover its greatest contribution is reminding us why good ones matter, writes Rebecca Houghton.
I recently came back from a few weeks in France with my family, much of it spent on a boat with no reception. It’s a brilliant way to spend a holiday, but a terrible way to keep pace with artificial intelligence.
When I left, we were still arguing over whether AI would replace managers. By the time I came back, the conversation had become much more interesting.
Increasingly, the question isn’t whether organisations can remove managers. It’s whether they can afford to. So, what’s changed?
Boss GPT might be an illusion
While AI has the potential to reduce managers’ administrative burden, the evidence suggests it hasn’t done so yet. Research cited by The Wall Street Journal from Harvard Business Review found that many managers are spending just as much time coordinating work, even as AI tools become more sophisticated.
The loudest calls for eliminating people managers continue to come from parts of the tech sector. Airbnb CEO Brian Chesky, for example, recently argued that “people managers will have no value in the future”, reflecting a view that AI will replace much of what managers do.
The problem is that this assumes management is primarily an administrative function, defined by tasks. What about the people piece?
Many organisations have created a catch-22
In an effort to fund AI investment, some organisations are cutting management layers. But in doing so, they’re removing the very people responsible for making AI adoption successful.
The result is an execution gap. Strategy is moving faster than implementation, AI initiatives are stalling, and new risks are emerging.
The data bears this out. While 96 per cent of C-suite leaders expect AI to increase productivity, almost half (47 per cent) of employees using AI say they don’t know how to achieve the productivity gains expected of them.
It’s one reason so few AI initiatives deliver meaningful value.
Despite significant investment, only around 30 per cent of AI pilots progress to enterprise-wide impact and measurable return on investment.
At the same time, organisations are grappling with a sharp rise in “shadow AI”, as employees adopt AI tools without oversight or governance. In some sectors, usage has increased by as much as 250 per cent, creating significant data security and compliance risks.
So, what are organisations that are succeeding doing differently?
Reimagine the manager as a player-coach
One idea gaining traction is the shift towards the “player-coach” model. Particularly in the tech sector, managers are spending more time doing the work alongside their teams, and less time managing from a distance.
Our own B-Suite Benchmarks research suggests this isn’t confined to the tech sector. Middle managers across multiple industries are increasingly operating on the pitch rather than from the sidelines.
There are clear advantages to this model. But in asking managers to contribute more individually, we are unintentionally sacrificing the enterprise leadership that organisations need to make transformation stick. By dropping managers into player-coach roles, we lose the team manager role, or we expect the C-Suite to drop down into it. But then, who’s the club president? I should probably retire the sporting analogy there.
Or, simply slash the layers
Some organisations have taken a more direct approach: remove management layers altogether.
Forrester Research reports that 55 per cent of employers that reduced headcount because of AI already regret those decisions. Not every management cut has been driven by AI, of course. Some are simply long-overdue cost reduction, repackaged as an AI strategy.
Either way, if Gartner is right that by 2029, fifty-six per cent of CEOs intend to eliminate most middle management roles, organisations may be creating a leadership problem that takes years to undo.
Gallup predicts we’ll face a shortage of effective leaders by 2028. I think they’re right.
If today’s managers are spending more time as player-coaches, where exactly are tomorrow’s executives supposed to come from?
So, what would I do?
I wouldn’t risk the leadership pipeline.
Leaders who can think strategically, influence people, and lead across an organisation remain a critical competitive advantage. Boards should be careful not to sacrifice succession planning in pursuit of short-term productivity gains.
I also wouldn’t buy into the hype that suggests “people therapy” isn’t part of a manager’s job. It absolutely is. Development, coaching, motivation, and psychological safety aren’t peripheral to the role. That is the role. The people are the work. Designing them out is designing for a disengaged (or non-existent) workforce.
Instead, I’d do two things:
Without that shift in the middle, AI adoption will continue to stall, shadow AI will continue to grow, management capability will erode, silos will deepen, and the next generation of enterprise leaders simply won’t emerge.
The irony is that, after all the predictions about AI replacing managers, we may discover its greatest contribution is reminding us why good ones matter.
Rebecca Houghton is a middle management expert, founder of BoldHR, and author.
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