Friday 15 Podcast

Does AI Success in B2B Depend on Middle Management?

McKinsey says 88 percent of companies use AI and only 7 percent have scaled it. A Harvard Business Review article points to middle managers, and Andy argues the work itself needs to be rethought.

Friday 15 Podcast

Key takeaways

  • McKinsey reports 88 percent of companies use AI in at least one function, but only 7 percent have scaled it across the organization.
  • Boston Consulting Group found that 60 percent of companies report little or no material financial value from AI investments.
  • A Harvard Business Review article names middle managers as the most common failure point in generative AI adoption.
  • The article points to three causes: treating AI as only technology, uniform mandates, and no performance measurement tied to AI use. Its fixes are manager playbooks, aligned incentives, and coaching by manager profile.
  • Andy argues companies also need to rethink the work itself, starting from how the business wins and working backwards.

The gap between using AI and getting value from it

Brian opened the topic with two numbers. McKinsey reports that 88 percent of companies use AI in at least one business function, yet only 7 percent say they have scaled it across the organization. Boston Consulting Group found that 60 percent of companies report little or no material financial value from their AI investments. Adoption is widespread, and results are not.

The usual explanations are technology, funding, strategy, and fear of job loss. Brian pointed to a new Harvard Business Review article, “Middle Managers Will Make or Break AI Adoption,” that names a different cause.

Middle managers decide what happens to AI

The article calls the layer of managers who turn executive ambition into daily behavior the most common failure point in generative AI. Even when senior leaders have approved the budget, picked the platform, and announced the mandate, middle managers decide whether AI becomes a workflow, a side experiment, a compliance headache, or what the article calls a quiet casualty of organizational avoidance.

Andy agreed with the finding as it applies to companies as they are structured today. The C-suite issues directives and frontline employees follow direction, so the people deciding what gets prioritized are the middle managers. Many companies are removing that layer at the same time. Andy noted that the number of people each manager supports has roughly doubled over the last five to six years, which leaves frontline staff trying to make AI fit their workflows without a boss to help.

Where adoption breaks down

Brian summarized three problems the article identifies. First, treating AI as only a technology project. Handing out licenses is not business transformation. Second, uniform mandates. Middle managers have different profiles, risk tolerances, and support needs, and a single rollout plan ignores that. Third, nobody measures adoption. Very few managers tie AI use to formal performance evaluations or KPIs.

The recommended fixes are practical. Shift the focus from vendor features to manager enablement, give managers structured playbooks, align incentives so corporate AI mandates translate into team behavior, and coach managers according to their specific profiles.

Is the structure the real problem?

Andy raised a different question: whether working within the existing structure is the right approach at all. Managers manage the work, so removing them and expecting AI to take hold is not realistic. He added that the underlying issue is that companies have not rethought the work.

Too many large organizations in particular have not rethought the work. That’s what needs to happen.

Andy

He pointed to the Microsoft study the hosts discussed a few weeks earlier. When Microsoft rolled out AI internally, very little changed until the company rethought its workflows, focused on the end goal, and structured the work around it.

Brian pointed to Amazon, which has been flattening its organization and cutting middle managers while investing heavily in AI and implementing it across the company. He also played devil’s advocate: if every manager ends up with 50 direct reports, who manages the work, and does the CEO become accountable for everyone? He said he would like to hear from someone at Amazon about what the impact has been. Andy agreed that balance matters.

The West Coast offense and AI

Andy used a football analogy from a conversation with producer Jared. Before Bill Walsh, teams either ran the ball or threw long to a wide receiver, and when the passing game failed they went back to running. Walsh, working with a weak Cincinnati Bengals roster, built the West Coast offense around short passes to players in the slot. The players, strategy, and results all changed.

Andy’s view is that AI is the West Coast offense of corporate America. Companies swap in new technology, keep the same structure and roles, get the same outcome, and conclude the technology is at fault. The problem may be how they are thinking about it.

Who are the slot receivers in B2B?

Brian asked Andy to finish the analogy. Andy’s answer: people who are comfortable with technology, make decisions quickly, and show good judgment, but do not necessarily have deep domain knowledge. AI shortens the learning curve, so a determined, capable person can get up to speed on an industry quickly and manage projects with AI. Senior-level expertise still matters, and Andy was clear that very experienced people remain valuable at higher levels. The slot receivers, he said, are the hires companies have not made yet.

Brian acknowledged the hard part. Focusing on outcomes will put people with deep expertise, such as someone with 25 years managing channels, in a difficult position if their role changes.

You can’t start with how many people are we going to continue to employ. Start with how are we going to win.

Andy

Closing thought and the Mindshare Summit

Andy closed by urging B2B leaders to define the outcomes and the work first, then redesign how they accomplish it, because AI allows them to change the game. Brian and Andy said the conversation will continue at the Master B2B Mindshare Summit, March 16-17, 2027 at Convene in downtown Chicago. Registration is open at summit.masterb2b.com, and attendance is capped at 300.

Frequently asked questions

Why do so many companies fail to scale AI?

According to the Harvard Business Review article Brian cited, the most common failure point is the layer of middle managers who must turn executive ambition into daily team behavior. Executives can approve budgets, choose platforms, and announce mandates, but middle managers decide whether AI becomes a workflow or stalls. McKinsey reports that 88 percent of companies use AI in at least one function and only 7 percent have scaled it.

What are the main reasons AI adoption stalls inside a company?

The article identifies three: treating AI as only a technology rollout, applying uniform mandates when managers have different profiles, risk tolerances, and support needs, and failing to measure adoption. Very few managers tie AI use to formal performance evaluations or KPIs. Handing out licenses does not equal business transformation.

What can executives do to help middle managers drive AI adoption?

The article recommends shifting from vendor features to manager enablement. That means giving managers structured playbooks, aligning incentives so corporate AI mandates translate into team behavior, and coaching managers based on their specific profiles.

Should companies remove middle managers to get AI working?

Andy and Brian discussed both sides. Amazon has been flattening its organization while investing heavily in AI. Brian questioned who manages the work when managers have 50 direct reports. Andy's position is that managers manage the work, and that the larger issue is that companies have not rethought the work itself.

What does the West Coast offense have to do with AI?

Andy uses it as an analogy. Bill Walsh changed football by building an offense around short passes to slot receivers, which changed the players, strategy, and results. Andy argues AI calls for the same kind of rethink, starting with how the company wins and working backwards, rather than putting new technology into old structures and roles.

Sources & methodology

  1. McKinsey, State of AI survey
  2. Boston Consulting Group, AI value research
  3. Harvard Business Review, Middle Managers Will Make or Break AI Adoption
Andy Hoar Andy Hoar
Co-Founder, Master B2B

Andy is a Co-Founder of Master B2B, founder of Paradigm B2B and author of the book Bot2Bot: The New Future of B2B Commerce. Andy is one of the leading global authorities on B2B commerce strategy.

Brian Beck Brian Beck
Co-Founder, Master B2B

Brian is a co-founder of Master B2B, Managing Partner of Amazon agency Enceiba, and author of the book "Billion Dollar B2B Ecommerce." Brian has also been C-level digital commerce executive with two decades of experience.