Leadership by Algorithm. David De Cremer

      Chapter 2: The Leadership Challenge in the Algorithm Age

      The machine age arrived a long time ago, but today’s need for the machine seems to know no limits. Modern machines need more room, more execution power and yes, maybe also the desire to lead. But who will they lead? The answer is, those who need the machine the most. And, dear reader, this may well turn out to be humans.

Naqvi writes that “the need of the machine could not be fulfilled without getting the followers to co-operate.”36 As we will see later, the influence that leaders achieve – and which we will call the process of leadership – can only be accomplished if there are others out there willing to follow the directives, ideas and suggestions of the one leading. So, if machines are about to become leaders, they need followers to achieve the powers and potential that we attribute to those same machines. As humans have developed an obsession to ensure optimal use of the potential attributed to machines, it follows that the followers are likely to be those same humans. It is a string of thought that keep the minds of scholars today very occupied.

      Of course, many among us may wonder whether a machine (empowered by the workings of algorithms) leading the human species is actually a valid proposition. Why should we even reflect on the possibility of algorithms leading organizations populated by humans? Does it make sense to ponder whether your next boss will be an algorithm? What should we do about it? Does ‘Leadership by Algorithm’ even have a basis to exist? And, if so, do we really need it?

      To delve deeper into this series of questions, we first need to ask ourselves whether it is a reasonable thing to expect human employees to follow algorithm-driven leaders in the same way they would a human leader? Can such a world exist? Some scholars think so.

      These scholars assume that whoever becomes the leader is determined, to a large extent, by the situation at hand. One of the most prominent leadership scholars, Jeffrey Pfeffer, supported this view in his 1977 Academy of Management Review piece, ‘The Ambiguity of Leadership’. In his article, Pfeffer debunks the myth that leaders are a unique kind of species – independent of any situational influence. Pfeffer argues that in our human drive to see heroes as the true leaders, we adopt the illusion that only those individuals who bring something special to the table can be called leaders. (As a side note, when looking at the contemporary movie industry, with its focus on the Avengers franchise and other action heroes, it is clear that today we still have a need for the illusion of grand and heroic leadership.)

      But, interestingly enough, it is actually the other way around; the situation makes the leader. And history supports this, revealing examples where leadership is attributed to those who, for reasons other than their own unique capabilities, win wars (Sun Tzu’s The Art of War), or can give the impression that their office is doing wonders for the economy (President Donald Trump bragging that ten years without recession is his own doing).

      One of the most extreme examples of this in my lifetime is President George W. Bush and the tragedy of 9/11. Before the Twin Towers and the Pentagon were hit by hijacked airplanes, Bush had some of the lowest leadership ratings since records began. In the aftermath of these events, he visited Ground Zero and announced that the US would punish those responsible. And something extraordinary happened. Suddenly, a man considered by most as incapable of taking on the role of President of the United States was elevated to one of the highest ratings for leadership ever recorded. The situation caused Bush to be seen by many as a good leader, especially when he expressed aggression and optimism, and took the actions of a leader going to war.

The power of the situation to decide who will lead has been proven by various scientific studies of mayors, athletic coaches and corporate leaders.37,38 These insights have led to the conclusion that if the situational demands dictate leadership effectiveness in the eyes of others, then “what does it matter who occupies the position or how they behave?”39

      Will your boss be a robot?

      These acclaimed insights seem to suggest that it is OK for algorithms to take up the role of leader. Just as it is OK for humans to take on this role. So, if this is true, why worry about automated leadership?

      If it does not matter, then, as humans, we should take even more responsibility to ask whether algorithms are really able to lead organizations. Today’s organizations are faced with a volatile business environment and are therefore required to act in fast and agile ways. To meet these demands, humans seek to explore how technology can help us to operate more efficiently and manage optimal performance. For instance, technological innovation is needed to ensure that our organizations can adapt to deliver products and services to a market populated with demanding customers. There is no way to escape this truth. It is the situation that we are faced with!

      Our business environment demands algorithms to be part of promoting organizational efficiency. Knowing the power of situational influences, it may not seem such a crazy idea at all that those running our organizations in the pursuit to excel may well become dictated by algorithms. Or, in other words, algorithms may well drive the management process very soon.

      This is not simply a thought exercise anymore. Being confronted with greater expectations of productivity, the need to respond faster, and the requirement to be more rational and data driven in our responses, both business and thought leaders have put the idea to automate leadership firmly on the table. Few are now questioning if this is feasible, instead they are wondering how best to implement their AI management strategy. Business leaders have embraced the idea that the widely announced digital disruption has introduced many challenges. Maybe too many for humans to deal with. As a result, it has made the business world uncertain on how to manage digital disruption. If this is the case, should it then not be better to rewrite the leadership handbooks that we have written over the last few decades?

Our organizations have become so complex that running them seems to require a leader with almost superhuman abilities. The world moves too fast for human leaders to be confident that they will make good decisions. Even though human intelligence may be a beautiful and complex thing, the simple reality is that it is not always up to the job of processing massive amounts of data, in very short periods of time, to arrive at the best decision available. And, this is where the algorithm jumps into the leadership equation. Algorithms can replace almost any feature that we think of as representing good leadership. We have arrived at a time where, “for any given skill one can think of, some computer scientists may already be trying to develop an algorithm to do it”.40 As a result, it is not a utopian

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