One of our current obsessions is how the introduction of generative artificial intelligence alters the nature of jobs, organizational structure, and management, sometimes in ways most people haven’t anticipated.

Microsoft’s Jared Spataro has an interesting perspective on this, as his role heading the tech company’s Modern Work & Business Applications team affords him advance access to many of the AI tools that businesses will roll out to employees in the months and years ahead. When we spoke with him earlier this year, he predicted that as a result of AI and other factors, “the manager of the next even two or three years is going to look very different.”

Spataro will be a keynote speaker at the Charter Workplace Summit on Oct. 26—you can see more details and sign up to attend for free here. We caught up with him at Microsoft’s recent unveiling of new AI features in products including Windows and Microsoft 365, and are sharing excerpts of that discussion here, edited for space and clarity, as a preview of what we’ll cover live in a few weeks at the Summit.

When we spoke earlier this year, you mentioned two ways in which the introduction of AI impacts management and leadership: One is managing across time and space, including flexible, hybrid working. The second is managing teams for machine-human augmentation as an additional skill required of managers. Building on that, are there other things that come to mind?

What people are starting to understand is that what we have is a general-purpose reasoning engine. We’ve never had anything like that except for the human brain up to this point. The underlying assumption of firm design and team design has said, anytime you need a thinker, stick a person there. What I see as a fundamental new skill is thinking, no, you don’t have to stick people there. You can sometimes stick machines there. That’s causing a rethink of everything from the structural design of teams and organizations to process redesign to even what that culture looks like.

You just mentioned three things: organizational structure, process, and culture. Let’s start with structure. There’s research suggesting that the introduction of AI flattens organizations, so there are fewer middle managers. And we know that some of the tools are able to upskill less experienced workers

It’s a trend. I don’t know if we’ve seen enough for any of us to say that’s it definitively, but if you think about what middle managers do structurally, their job is essentially to be a buffer, a mediator between the people below them that are meant to do the work and the people above them that are setting expectations and trying to give direction. Certainly AI is not at the point where it can do all that work. There’s a lot of mediation to be done.

But the flow of information up and down, that type of work can be done even much more effectively by machines. Some of the synthesis work that happens, summarizing what’s happening, reasoning across and looking at options—that can be done.

What I see happening is people reevaluating, is the way we’ve organized ourselves ideal or is it based on previous assumptions? And can we experiment?

How do you think about skills in this context? How can organizations prepare workers for what you’re saying could happen?

Economically what gets valued tends to be the scarce resources. When expertise was a scarce resource, when thinking was a scarce resource, when solid reasoning was a scarce resource, then we tended to create a worldview that was all about getting those really scarce resources and monetizing them.

I think we’re going to be seeing a different world. There still will be scarce resources for sure, but will reasoning over complex data sets be one of them? It’s not clear to me that that will be a scarce resource going forward. We’ll economically get to the point where that is cheaper and cheaper and cheaper.

What skills are valuable? What I’m seeing is some very interesting combination of generalized management skills where everyone becomes a generalized manager, meaning these generative AI tools essentially put an entire staff at the beck and call of anyone. That’s a new skillset. How you generally manage, how you delegate, how you pass judgment on what is brought back to you, how you synthesize across things. That’s a skillset for sure.

How you prioritize….

How you prioritize, all that type of stuff. Then there are some domain specific—I don’t know if I’d call them skills—but knowledge and understanding enough to use the tools to get real results.

What I’ve found is that the more I know about a particular issue, topic, problem set, the better the results are from generative AI. I can ask very sophisticated questions. I can direct it in different ways, for example, ‘We’ve gone down this path, don’t do that. I want you to go deep here. I want you to make sure that you bring these things to the forefront.’ That requires domain knowledge. But that combination—: a generalized skillset, but the ability to have depth in key areas where you have to make decisions—is almost at odds, and that’s really interesting.

You talked about two other areas where management is changing as a result of AI. One is process and one is culture. How is process changing?

Right now, the cutting-edge business leaders out there are picking core workflows, core processes, and they’re asking themselves, what portions do humans do? What portions do machines do? Where do I want my humans spending their time? Where do I want machines spending the time?

In some ways it feels like 1980s, 1990s process reengineering. But this time you have a really new tool set.

What about culture? How is leading an organization’s culture different with AI?

The speed of AI is having a major impact. One example comes from our own company, where we just announced Nov. 1 is the date that we will make this latest version of Microsoft 365 generally available. That’s less than a year from the release of ChatGPT. We used to develop products on five- and seven-year cycles.

You’ve got to think about how you move quickly without all the information, but knowing that you have resources that can help you along the way in ways that you haven’t been helped before. That’s a change for many industries to think about what that culturally means.

Companies are looking to get their leaders up to speed on generative AI and business strategy—how would you recommend they do that?

Number one on my list is that people just need to use the thing. Your personal experience is going to be more valuable than anything anybody has to tell you.

Maybe number two that is on our collective list as a team—going back to your questions about leadership and management—we have been recently digging into some good work that’s been done over the last 10 years out of Harvard on adaptive leadership.

Basically the framework is this: there are technical problems and there are adaptive problems. Technical problems are those that have been solved before and it’s a matter of applying technique. Adaptive problems are you’re walking into the dark, you don’t really know what’s next, and you’ve got to be able to experiment quickly and move into these areas. For me, it seems like a great framework for the management and leadership questions you were asking me earlier, when also fused with your own experience.

Sign up to see Spataro live at the Oct. 26 Charter Workplace Summit here, with both virtual and in-person options. Read a full transcript of our conversation here, including more on the next chapter of artificial intelligence and the impact on higher-level workers.

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