out that the future management of organizations will be an automated one.41 It will prove to be cheaper, more efficient, and potentially more impartial in its actions than human beings.
I would even go further: Given the market demand for business efficiency, it is inevitable that algorithms are and will be replacing various jobs at different levels of managerial discretion and as such seem destined to take over leadership from humans in many ways.42 As Frank Pasquale noted, “authority is increasingly expressed algorithmically”.43 In fact, having algorithms as part of how authority looks and sounds, moves the algorithm by definition into the role of power holder. How so? Think about it, because of their deep learning abilities, algorithms construct decision rules that are not well understood by humans. Their decisions will therefore feel fixed and in some way intractable. If we thus allow algorithms to take up the role of the authority, we will become dependent on them. In other words, if we voluntarily make algorithms part of our leadership system, then we create a context where we will be dependent on them. In addition, this dependency will – because of the rational nature of an algorithm – feel distant, rigid and hard to argue with. The result will be that algorithms will co-ordinate what we do and how we do it.
The red-hot business model
If algorithms have the power to shape our interactions, how does the corporate world factor this into their ideas on how to run a company? Well, it seems increasingly likely that they are embracing a new business model, where algorithms lead in the management of decisions and execution of jobs, and human employees follow.44 For example, the analytics provider SAS considers digital data management as a step forward, where algorithms not only provide advice but also fuel strategic decision-making.45 This business model portrays human employee’s bosses as the smart ones, since they are driven by algorithms that can perform in superior ways. No doubt this business model is clearly present in the minds of many as it drives important leadership transformations currently taking place in organizations.
Efforts are underway to understand the brains of successful CEOs and use those neural imprints to create highly efficient algorithms.46 These algorithms will continuously learn and develop into a leading authority, superior even to human leaders. Results from a survey conducted by the World Economic Forum’s Global Agenda Council on the Future of Software and Society also revealed that businesspeople expect artificially intelligent machines to be part of a company’s board of directors by 2026. As a matter of fact, this futuristic view is already materializing. For example, the Hong-Kong based venture-capital firm Deep Knowledge recently appointed a decision-making algorithm – known as VITAL – to its board of directors, indicating that algorithms are already taking on the leadership challenge to set parameters of corporate governance.47,48 And, last, but not least, in 2019, Amazon allowed AI to fire employees without consulting with any human.49
It is important to realize, however, that there is also the potential for all of these optimistic and exciting developments to backfire. They could create a situation where people are increasingly being confronted with existential doubts and fears about their vision of the future. Indeed, although algorithms bring economic benefits, people may feel that human labor is devalued by organizations aggressively pursuing automation.50 As a result, the value of being a human employee is not understood very well anymore and the fear for unemployment is a real one.
In addition, existential doubts may create the need to reflect on what kind of society we want to see. Do we want a society where the corporate dream of having optimally functioning organizations leads us towards automation of those leading us? Or do we want a society where we decide not to forego the human touch in whatever we do, including leadership?
Such feelings cannot be underestimated because they directly link to many people’s uncertainties about whether their job will still be relevant in the new technology era. Many also question what the future of human employees will be if algorithms run the decision-making process. It is these uncertainties that I, as a business school professor, am faced with when executives ask whether leadership courses, which provide insight into human motivation, will disappear in the future. This is the point where I see it is necessary to disrupt our thinking about the business models we want to adapt and the kind of automated leaders we want to see in the future.
It is all well and good to have these models in mind. Its exciting, even, to see where the limits of those models may lie in our pursuit to optimize performance, organizations and society. However, it is also the responsibility of humans to be critical about their own ambitions, desires and wildest dreams. Because, what one can imagine is not necessarily what we need, nor is it necessarily the vision that is driven by the best and most accurate information. In fact, alongside all the exciting technological developments that we witness today, when it comes down to automating our business leadership, we need to realize that those wishes could well be driven by people who are poorly informed about the real impact of automated work forces.
Human sophistication
So, the evolving business model of the future seems to be one designed and pushed by people who do not necessarily have the required knowledge of what algorithms are capable of, nor of what kind of human skills are necessary to drive leadership excellence.
It is a fact that many business leaders cannot be recognized as experts in technology, its applications and usage, and philosophical thought regarding the human reality that develops in an automated environment. So, despite all the greatness and beauty behind the idea that increasing automation will inevitably lead to automation of everything, including the leadership of organizations, we also have to be critical about what exactly has real value and what has not. In this respect, it is interesting that, contrary to the preferred automation model of business leaders, recent research has revealed that skills related to feelings will define the future jobs for humans. In fact, salaries for human employees in the future are expected to be determined more by the ability to deal with emotions and relationships rather than by their cognitive abilities. This reality paints a future where jobs that require sensitivity to needs for relationships will have to be populated by humans and the role of leadership seems to fit that bill.
The argument that I am putting forward is that the functioning of our organizations and societies are not served by a kind of sentiment that the analysis of data by algorithms will automatically develop and lead strategies in miraculous ways. Algorithms are not technological tools that have the leading abilities to deliver immediate returns without any human presence or interference needed. As we see technology develop today, we need to be aware of the fact that automated decision-making is still something of a black-box that runs in less structured ways than we think. Algorithms also miss human sophistication, and an awareness of moral norms and emotions; all skills that allow leaders to create value beyond the immediate observable financial returns. In fact, when looking at the data available, reality paints a somewhat different vision when it comes down to the optimal use of algorithms in leading and co-ordinating organizations.
Research by IBM shows that 41% of CEOs report that their organization is not at all prepared to introduce data analytic tools into their management structures.51 In addition, when it comes down to dealing with humans in automated ways, only about 22% of organizations say that they have adopted algorithms in their Human Resources practices.52 And, of those 22%, most are not clear on what the exact effect is that the algorithms reveal. Given these numbers, it seems reasonable to argue that wise leadership in the 21st century will still need more of a strategy than simply trying to make a difference by means of optimizing the technology (including the management technology) taking care of our data. Rather the real difference will be made in having leadership out there that can make use of these technologies in human-centred and sustainable ways that benefit human values, interests and well-being.
36 Naqvi, A. (2017). ‘Responding to the will of the machine: Leadership in the age of artificial intelligence.’ Journal of Economics Bibliography, 4(3), 244-250.
