This article originally appeared on Forbes.com.
For almost a century, professional managers have been viewed as central to a company’s performance. The organizational goal was to advance the best performers into management—to take expert bricklayers, so to speak, and make them managers of other bricklayers. Rewards and recognition flowed accordingly.
This prevailing paradigm is changing. CEOs of larger companies consistently tell me how difficult it is to free up employees and other resources to mobilize for important opportunities, despite the obvious need for speed. That’s why more emerging leaders focus on creating communities of expertise within the firm or among its external partners—think guilds of bricklayers.
These firms have identified their mission-critical roles. They reorient investment around critical roles that deliver the best customer experience, and place their best talent in the roles. The payoff can be significant, as top talent dramatically outperforms average talent in mission-critical roles.
In Silicon Valley, successful start-ups often put software engineers in mission-critical roles. A music-streaming company organizes its engineers into self-managing squads of no more than eight members, each with end-to-end responsibility for a cluster of product features. Squad members decide what to build, how to build it, and whom they need to work with to ensure interoperability. A game-design firm uses an even more radical model, one without supervisors, where the team chooses what it wants to work on and gets publicly rated by other team members.
A mission-critical orientation has spread outside Silicon Valley-type environments as well. At a white goods manufacturer with more than 70,000 employees, the core units are self-organizing teams built around the mission-critical roles in marketing, design and manufacturing. Teams focus on specific projects and get staffed through an internal market for talent. Recently, the manufacturer has moved to eliminate most support teams, which historically played a coordination role, and opened up its teams to external partners.
With more self-organizing teams, firms need fewer professional managers. The span of remaining managers will widen considerably as more communication becomes peer-to-peer rather than hub-and-spoke. Already, many multinationals have dropped their formal performance-ranking systems; instead, some companies are trying continuous and public peer feedback and reviews.
The definition of leadership also changes. Some tracks will still recognize and reward the efficient management of routine processes, because the product still needs to be shipped and the books balanced. But now other tracks, just as highly prized, value the coaching and development of apprentices as they migrate from one role to another.
As more activities become automated or outsourced, almost all remaining roles will be mission-critical. Most work will be project-based, with small, self-managed teams being the dominant organizational unit. That shift will vastly reduce the number of permanent supervisors and bosses, replaced by mentors who coach and help guide employees’ careers from project to project.
The challenge for senior executives will be to simultaneously manage two systems: one built of self-managed-teams, innovating on a specific project; and another that still uses hierarchical routines and processes, glued together in a matrix. Leaders will have to define different career paths and rewards for the expert team members and for the professional managers who do remain.
Every company has mission-critical roles, whether or not it explicitly organizes around them. To get the most from these roles, at the very least senior leaders must identify them and develop a plan to fill them with the best talent. Leaders increasingly add value by enabling the critical roles rather than controlling information flows. And at traditional firms, they will also need to guide people through the mother of all change-management journeys.
James Allen coleads Bain & Company’s Strategy practice. James Root leads Bain’s Organization practice for Asia-Pacific. Andrew Schwedel leads the firm’s Macro Trends Group.