Managerial capability: Its future in a world of constant change

Death and taxes. According to Benjamin Franklin, these are the only things we can truly rely on to remain constant. Change of course, was added to that list late last century and now, we face another surety – uncertainty. Terri Simpkin reports.

managerial capability management business plan strategy - image courtesy of Depositphotos.
While today’s business demands and those of the last century differ, the need for robust, responsive and human-focused managerial capabilities remain the same – image courtesy of Depositphotos.

The rapid emergence and implementation of technologies such as artificial intelligence, machine learning and automation, coupled with new trading facilitation methods such as blockchain, are making headlines almost daily.

Commentators question to what extent robots will displace jobs, and business leaders grapple with implementing technologies designed to streamline activities and improve productivity.

Industries such as retail lament the demise of traditional trading structures, and governance mechanisms are being questioned across sectors as diverse as entertainment (see the Weinstein revelations) and charities (Save the Children, for example).

Even stalwart government institutions are being questioned about their capacity to keep pace with concepts such as transparency and integrity.

Managerial capability

In the context of powerful but disruptive technologies grabbing headlines and increasing demands for more robust governance standards in corporate and governmental institutions, the single unifying factor is managerial capability.

Traversing all arguments with regard to uncertainty, disruption and change are questions about the fitness of managerial capability to address current and emerging demands on business.

And while present-day issues appear to be new, the question of whether managers are meeting the demands of organisations and the people who work in them is not.

This article first appeared in the July/August issue of The Manufacturer magazine. To subscribe, please click here.

It could be said that the critique of management capability has been a constant since the emergence of management science in the early part of the last century.

Indeed, investigations into the efficacy of management training, education and applied skills have routinely found gaps between what is needed and how it all comes together in practice.

A recent study conducted by The Centre for Economic Performance suggests (like innumerable others) that ‘accidental managers’ who have fallen into management with little or no effective managerial capability are a key factor in poor organisational effectiveness.

The human factor in an age of automation

Manufacturing Technology Automation Robot Worker - Dollarphotoclub_30421887
The elements in play for managers working alongside robotic ‘employees’ are the human ones; emotional, inspirational, motivational and compassionate.

However, while the specifics of today’s business demands and those of the last century differ, the need for robust, responsive and human-focused managerial capabilities remain the same.

Indeed, as we see more automation of decision-making and routine management tasks, what’s left is the managerial capacity to manage complexity and disruption in creative and innovative ways.

It stands to reason then that the elements that remain in play for managers working alongside robotic ‘employees’ are the human ones; emotional, inspirational, motivational and compassionate.

Work by McKinsey suggests that around 50% of work activities across economies globally could be automated with currently available technologies, and up to 375 million people may need to move to alternative occupations by 2030.

The demand on leaders and managers to orchestrate not only the human resources implications of such a transition, but also the integration of automated elements of work and human elements of work is staggering.

The complexity of retraining, managing the fluidity of a global labour market and adopting strategies that create a compelling value proposition to maintain talented people to meet such demands will place an even greater burden on leaders and managers.

Today, not tomorrow

But it’s already started. We tend to talk as if these challenges are on the horizon, matters to be dealt with at some point in the future. But these challenges are here and have been with us for some time.

Across most sectors, skills gaps and labour shortages have been consistently identified since late last century. Manufacturing, construction and almost all industries under the STEM umbrella lament a recurring inability to find and keep the people they need to effectively staff organisations.

The demands of maintaining growth, generating capability to manage rapid transitions to the digital age, and ‘second machine age’ challenges such as new business models and changing employee value propositions must be met with a totally different managerial mindset.

Servitization White Paper - People Culture Meeting - Stock Image
Behaviours, skills and attitudes associated with management and leadership practice must change.

Behaviours, skills and attitudes associated with management and leadership practice must change. Traditional, generally accepted and embedded practices are now openly critiqued, and even demonised in the news and business media.

What do we need?

Organisations are struggling with a perfect storm of rapid and discontinuous change, labour market disparities, aging workforces and poor managerial capabilities.

The capacity to innovate in terms of technology and people-related matters is diminished in such an environment.

Moreover, the capacity to establish more responsive business models that encourage talent pipelines and improve the capabilities of people to do the work in front of them now, and as their job differs over time, is key.

Managing people as individuals rather than as generational groups or ‘diverse’ sets (returning parents, semi-retired, new graduates) is the only way to establish an effective managerial approach.

Lumping people together in order to determine their work preferences is ineffectual. To attract, retain and advance today’s workforce, managers must develop and enact skills to interact effectively with individuals.

New structures, processes and procedures (such as recruitment and selection, advancement and promotion, as well as work practices) must be creatively disrupted by managers to deliver on organisational demands in an age where the new normal is underpinned by uncertainty, labour mobility and a different view of the importance of work in people’s lives.

Emerging managerial paradigms demand that leaders and managers divest themselves of traditional views of organisational structure, business models, labour process and control.

Indeed, in ‘the second machine age’ the demands facing managers are difficult to replicate by machines and big data. Creativity, innovation, acceptance of disruption and empathy are the new skill set.

It is these capabilities that will endow managers with the ability to diminish anxiety associated with disruption and encourage the emergence of workforce resilience in the face of unprecedented workplace transformation.

The Prince's Trust has partnered with Innovate UK, to find the next generation of UK innovators - image courtesy of Depositphotos.
Creativity, innovation, acceptance of disruption and empathy are the new skill set – image courtesy of Depositphotos.

Technical skills have an ever-decreasing shelf life, but the capacity to interact with and lead people remains constant and important.

When do we want it?

Now! The demands on managers have irreversibly changed, but the ways in which we come to the practice of management (and how it is taught and developed) have, in the main, remained the same since last century.

Indeed, in a submission to an inquiry into small business productivity, the CIPD (Chartered Institute of Personnel and Development) identified that managing people was one of the most important, but one of the least-recognised aspects of managing a business.

Overall, while emerging challenges associated with the forth industrial revolution are set to be more disruptive and with a shorter lead time, than in the past, the implications for managers and leaders are yet to be fully addressed in organisations and institutions globally.

If disruption and the consequences of it are to be beneficial rather than debilitating for individuals and economies alike, managerial capability, particularly in regard in regard to managing people, has to be reimagined.


Dr Terri Simpkin is a consultant with the business leadership consultancy Rialto. She is a chartered member of the CIPD and AHRI (Australian Human Resources Institute), a fellow of the HEA and a Churchill Fellow.

She is a trustee of the Baker Dearing Educational Trust and an avid supporter of inclusive STEM technical education, especially for girls and women.