(Re)imagined leadership in the age of algorithms and automation

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We live in an age of wonder where cars drive themselves, devices anticipate our needs, and robots are capable of everything from advanced manufacturing to complex surgery.  Algorithms and automation are transforming every facet of our daily life. Algorithms have actually been at the heart of some of the most successful corporate empires in the world. Google was born from an algorithm helping internet users find the information they need, while Coca-Cola boasts of its ‘secret recipe’ as its own version of an algorithm.

When one logs into a Facebook page one immediately sees an advertisement that seems uniquely relevant. Facebook is an advertising powerhouse not because it has a standard formula for great advertisements, but because at the start it asks, “Who are you?” Then, guided by its understanding of your likes and dislikes, it delivers advertisements tailored to your profile. Netflix similarly does the same thing. Before you stream a movie, the website gives you a ‘movie quiz’ asking if you have seen various films and how you would rate each one. On the basis of the results, it suggests only those movies that align with your past preferences. These two exemplars are simply the outcomes of algorithmic formulae.

Likewise traders from Wall Street, Amazon and more have all relied on algorithms in the way they work. With organisations now generating more data than ever, collecting data is no longer a problem instead it is all about how that data can be used and processing data is done best when it’s achieved through algorithmic software.

Moreover, the reality is that algorithms are not new. They have been at the core of marketing, automation, manufacturing control systems and campaign management for years. They have an impact on everything from social media to fabric automation and mobile commerce and they go beyond simple business intelligence. By using algorithms business leaders are now finding smarter and more effective ways to tap into data resources.

Within the next decade, if something can be run by algorithms, it will be.  This is especially true in the business world where cost is always key. Machine learning and artificial intelligence applications are booming in the corporation world. 

Whether the task is candidate selection, inventory management, targeted marketing or, manager development, there’s an algorithm for that. While algorithms are not always replacing humans, they are usually changing the way we work.

Many of today’s leaders find themselves hampered by legacy business models, excessive cost structures and workforces unable or unprepared to deal with the blistering pace of change. We are now in the midst of a major economic shift, one in which business value increasingly accrues at the intersection of the digital and virtual worlds. In this new competitive landscape, a new ‘automation’ for work is emerging, powered by data, algorithms and artificial intelligence.

Some leaders are sensing the opportunity, while others are buckling under the pressure of fast-changing technology, intensifying customer expectations and waves of hungry start-ups snapping at their heels. The role of the leader has never been this complex, difficult, uncertain or important. Within this context, corporate leadership is struggling to keep up with the connected workforce and increasing speed and complexity in the digital economy. But looking ahead to the rise of algorithmic and human-machine co-working, the situation is even more worrying.

Today, the idea that leaders can understand every area of a complex business and make all key decisions themselves seems unlikely. Tomorrow, it will seem ridiculous. So how can leadership work in the age of algorithms, and how can leaders become force multipliers for the people, machines, and code around them without becoming a barrier to progress?

Joshua Ramo in his book The Seventh Sense makes the point that we now live in a world where interconnectivity is normal and the mastery of this connection is the essential skill of the automation age. This is true for everyone, but it is particularly true of our business leaders. However, for all their power, algorithms are extremely literal and so require our understanding of lateral context and nuance. They make stunningly accurate predictions, but still need humans to interpret why an event is likely to happen.

Equally in the age of automation, leaders will need to get people and machines to work in harmony. Automation is unusable if untrusted by humans. Leaders will engender this trust on hybrid teams by training people on how automation works, and providing teams members with the information to anticipate the machine’s responsibilities. They will need to provide their teams exposure to automation so people calibrate their expectations.

One of upsides of algorithms is their ability to enhance human decision-making in applications like legal e-discovery, medical diagnosis, or even criminal investigations. In practice, we see this paving the way for more people taking on the higher-order tasks traditionally reserved for leaders, such as healthcare assistants and paralegals capable of performing the same work as doctors and lawyers.

Consequently as machines and algorithms enrich human intelligence, more people across the organisation will able to make well-informed decisions about the best way to do their work efficiently and effectively.

Therefore the most obvious use of algorithms in business is in defining what the vast amounts of data collected by businesses actually mean. Algorithms can be used to make business processes clear and more unique and also to ensure that leaders are providing the right solutions for individual customers based on the experiences they want.

There are already many examples of this in business with one of the most obvious being from Amazon. Visit an Amazon home page and you will find it is filled with items you might want to put into your shopping cart based on your purchases and other variables. These ‘suggestions’ are, of course, based on algorithms driven from a customer’s behaviour.

The age of automation is going to change the way we work and live from the front lines to the head office.  Algorithms are rapidly taking over a variety of tasks, and the hope is that they will free us up to do work we enjoy, with fewer spreadsheets and resumes, and live our best lives, free from ‘face time’.

Leaders need to accept the fact that machines already dominate the factory floor.  Now they are coming to the front offices, executive suites and board rooms.  It’s time to for leaders to learn the basics of the age of automation.

No leader is safe from the rapid change we are seeing in the age of algorithms.  Businesses are transforming at rapid pace and there is no time to waste. Failure to implement algorithms, leaders and organisations are likely to experience a loss in competitive advantage to their rivals. With suitable data sources, algorithms have the potential to offer quantifiable results while making vital predictions in real time.

The Leader who is primed in the use of algorithms offers a hopeful and practical guide for leaders of all types, and organisations of all sizes, to survive and thrive in this era of unprecedented change. Such leaders will be able to design their own journey of personal transformation, harness the power of algorithms, and chart a clear path ahead for their company, their team, and themselves.

Paresh Soni is the Associate Director for Research at the Management College of Southern Africa (MANCOSA) and writes in his personal capacity.