Leadership by Algorithm. David De Cremer
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In fact, we do not even have to wait for this scenario to happen. For example, in 2018 online retailer Shop Direct announced the closure of warehouses because nearly 2,000 jobs had become automated. The largest software company in Europe, SAP, has also eliminated several thousands of jobs by introducing AI into their management structure.
The framework for today’s society is clearly dominated by the assumption that humans will be replaced by technology whenever possible (human-out-of-the-loop) and that it only makes sense for humans to be part of the business process when automation is not yet possible (contingent participation). Several surveys indicate that it is only a matter of time. For example, an Accenture study revealed that 85% of surveyed executives want to invest more extensively in AI-related technologies by 2020.31 Likewise, a PwC survey revealed that 62% of executives are planning to deploy AI in several management areas.32 Furthermore, a survey by Salesforce Research revealed that, in the service industry, 69% of organizations are actively preparing for AI-based service solutions to be applied. Finally, Yahoo Finance predicts that in 2040 our workforce “may be totally unrecognizable.”33
Why we think about replacing humans
Where does this obsession with replacing humans come from? Is it the human default that once we find a limitation – in this case, our own – we believe it must be eliminated and replaced? Is there simply no room for the weak? A matter of accepting that once a stronger villain arrives in town, the old (and weaker) one is replaced? If this is the case, then this kind of thinking will transform the discussion about the human-AI relationship into a zero-sum game. If one is better (and thus wins), then the other loses (and is eliminated). Where does the belief in this logic come from?
To answer this question, it is worthwhile to look at the distinction that the famous French philosopher René Descartes made between mind and body.34 The body allowed us to do physical work, but, with the industrial revolution taking place, we were able to replicate our physical strength by utilizing machines. The enormous advantage was that we could now work faster and create more growth and profit. Importantly, however, it also allowed us to free ourselves from physical labor and move our attention towards the power of our brain. This led to humans becoming more sophisticated and creative, and able to come up with new ways of dealing with reality. Our move towards the mind, and away from the body, meant that we submitted for the first time to the machine. With machines doing the mindless physical work, rendering the human body obsolete, we were then able to devote most of our time to work that requires the application of the mind.
In the 21st century, it is our mind that is now being challenged by the technology revolution. Our mental capacity simply cannot compete with the speed of algorithms to process data, as well as their ability to learn and optimize any outcome in almost unlimited ways. These developments mean that, as a society, we have entered yet another phase of great opportunities which can benefit and further our interests. However, the opportunity available is not the augmentation of our physical strength to bring material success, but the augmentation of our cognitive strength. When using the idea of the body and mind to look at these developments, we may well have reason to be afraid.
In the past, we became dependent on the machine to do our physical work. If the present and future follows the path of the past, does this mean that we will now also become dependent on technology to do the work of the mind? If we adopt a rational point of view, where we consider ourselves as primarily striving for optimization, this kind of dependence will definitely happen. We know that we live in a time where a new type of super mind – AI that goes well beyond the cognitive abilities of humans – has arrived. At the same time, we are being bombarded with news that the authentic human sense of intelligence is failing when we compare it to the efficiencies of artificial intelligence.
Obviously, it is somewhat of an irony that we have created this challenge ourselves. Beyond that, it is a cynical sentiment that reminds us the end may be near. In fact, if algorithms now replace the human mind (after the machine replaced the body), we may have nowhere else to run. Wasn’t it the case that there is only body and mind? If both are replaced, in which direction do humans move? Do we need to now think about whether the human race is needed at all? Is it time to ask ourselves where, if at all, we can use humans in the cycle of algorithms that we are creating?
As indicated earlier, for some jobs (e.g. financial industry, health care) automation seems to be rapidly becoming the dominant voice. But, towards the future, it will not only be in those industries where humans will become inferior to algorithms. Telling in this respect is the 2018 Deloitte Global Human Capital Trends survey and report of business and HR leaders. This survey found that 72% of leaders indicated that AI, robots, and automation are quickly becoming the most important investment areas.
When innovating becomes leading
If body and mind can be replaced, man itself should be replaced. It sounds like science fiction, but all the signs seem to be there. So, if this is really happening, the question of whether we submit to the machine and corresponding technology will be the next one to answer.
In the volatile and uncertain business environment of today, this idea may not sound too crazy. Hasn’t it been suggested that the kind of leader needed to survive such circumstances is one who has superior data management and utilization skills? One who is able to produce specific cost-saving recommendations, and enables organizational efficiency and productivity? And, most importantly, is able to deliver all of this at lightning speed! Yes, from this point of view, ladies and gentlemen, we could argue that the demand for a new leader has arrived and it is not the human kind. In fact, as a society we have landed in a new industrial revolution – and this one is led by algorithms. Human leadership may not even survive the impact of AI. If so, will this change of leadership happen smoothly and without opposition?
Given all the benefits that our new automated leader brings us, resistance may not only be futile, but even non-existent. It should be, if we as humans react rationally. As rational beings we should strive for maximizing our own interests. And, as we can see it now, all the benefits coming along with the increase of automation can only create more efficient lives for us. So, our rationality says a big yes to this new leadership situation.
But it is not only our rationality that is at play. Emotions are likely to play a role as well. All the benefits also create a comfortable situation that humans will easily adjust to and may even become addicted to. And, once we become addicted to it, we will comply with it because it makes us happy. As a matter of fact, research shows that machines can trigger the reward centers in our brain (one of the reasons why humans have become so addicted to continuously checking their smartphones). The reward center releases the hormone dopamine, which creates a feeling of happiness. But, as with any addiction, humans will run the risk of looking for these rewards more often. They want to maintain this feeling of happiness, so they will increasingly feel a need for more automation. Since our automated leader seems to be able to give us what we want, and as such make us addicted, human compliance is likely to follow. OK, it is clear humans will surrender. Autonomous algorithms are here to stay and – could it really be true? – will lead us.
But, before you close this book and accept the idea of an algorithm telling you tomorrow what to do, might I introduce you to another reality? A reality that brings a more complex view on leadership and the potential role that algorithms will play. Allow me to start with a first request. Think about the question of whether an optimizing leader really constitutes leadership? Is a leader simply the combination of being a strong and smart person? Is leadership something that can be achieved by the body and mind combined into one role? If so, then the smart machine of today is truly the winner. But, I do beg to differ. For the sake of the argument, let us take a quick look at how exactly algorithms learn and whether this fits the leadership process as we know it in today’s (human) society.
Do limits exist for self-learning machines?