Mike Straw discusses the threat that Big Data poses to middle management.

A recent Gartner survey reported that 73% of organisations have invested or plan to invest in Big Data in the next two years. This news coincides with a recent Wall Street Journal article which has suggested that businesses are opting to use data to make decisions, eliminating the need for middle managers. Training budgets have also shrunk during the most severe global recession in history, and are only just starting to show signs of recovery, albeit from a much lower base. These factors are combining to leave middle managers even more threatened. 

But the fact is that middle managers need to see these developments not as a threat, but as an opportunity to develop their skills and make themselves indispensable. 

Developing commercial acumen around the data

Data is just 0s and 1s. It doesn’t mean anything unless it is being interpreted. Middle managers now need to take this chance and develop their strategic and commercial acumen around what Big Data is telling them. A key part will involve uncovering the trends that data is showing them and breaking their own assumptions. This is what fuels innovation. 

The big threat to middle managers is not adapting to these changes. The old role of just managing and coordinating may well be dead. But if they focus on driving innovation by interpreting the data then this could be a fantastic opportunity. 

These changes will not just impact on middle managers. Any function whose main role is the provision of data will need to adapt to halt their decline. Technology is developing to provide data of its own accord. Now the game changes too: What does the data mean? What does it tell the business? How will it direct the organisation's future path? 

This will impact a variety of functions of a business. The training, HR, marketing, finance, planning and statistics departments all need to step up. For training teams, there are obvious implications: do they understand Big Data themselves, and how can they use it to model and adapt programs that help staff tackle the real issues that the data is revealing?

The board’s role

The board also has an important role to play as they need to consider whether they can retrain or reshape their workforce to adjust to the changes. They can’t just cut people as a machine is now producing the data. Ensuring your organisation interprets the data ahead of the competition is now key to success. 

Converting data to rapid decisions

Zara are a fantastic example of how to do this well. The brand is renowned for its ability to deliver new clothes to stores quickly and in small batches. Twice a week, at precise times, store managers order clothes, and on schedule, new garments arrive. The company produces about 450m items a year for its 1,770 stores in 86 countries. 

They take photos of what’s on the catwalk, analyse trends and themes and produce new clothing lines based on this within ten weeks – way ahead of the competition. Zara call it the ‘front-to-back supply chain’. It means they’re faster and more responsive, they need to hold less stock than competitors, it lowers their cost base and gets the latest fashion into their stores first. 

So where does all of this leave middle management? In summary, there are five key ways in which they need to react:

• Use the data to uncover and challenge assumptions. As touched on above, analysing the data can help reveal the barriers that are being erected against change. Use the data to see if the old ways can be challenged and new ways of working introduced. Think back to Egg who analysed data to realise that 0% balance transfers could work and be profitable – changing the face of the credit card market at a stroke.
• Interpret the data. Linked to the above, data is useless unless you can interpret or translate it. This is where machines will never really replace humans. Middle management – and trainers – can bring real value into play here. I remember once being given a password for access to a company system: L3tM3!n. What a ridiculous password I thought – impossible to remember. Then someone interpreted it for me: Let Me In. Suddenly it all made sense.
• Act on data to work differently. Having interpreted it, don’t just sit on it and carry on the same. Have the strength and courage of convictions to go about looking for real changes that can be made; change the way of working.
• Don’t get defensive. It’s easy to feel threatened by data and technology. Don’t. Let it be a mirror that shows you how things really are. It’s an aid, a facilitator towards new and better ways of working.

If anyone is in doubt – just look at a company like Apple that is using data all the time to change the market through innovation and collaboration. We would all love a bite of that.

Mike Straw is CEO of Achieve Breakthrough, an award-winning consultancy that provides organisations with new ways of thinking and acting to deliver better business and people performance