Managing the Bots That Are Managing the Business

Algorithms are fundamentally redefining the roles of worker and manager.

“Within the next five years, how will technology change the practice of management in a way we have not yet witnessed?”
Science fiction writer William Gibson once said, “The future is here. It’s just not evenly distributed yet.” You don’t need to wait five years to
see how technology will change the practice of management. You just need to study companies that are already living in the future that
remains around the corner for everyone else.
You must also reframe what you see so that you aren’t blinded by what you already know. Consider Google, Facebook, Amazon, or a host of
more recent Silicon Valley startups. They employ tens of thousands of workers. If you think with a 20th-century factory mindset, those
workers spend their days grinding out products, just like their industrial forebears; only today, they are producing software rather than
physical goods. If, instead, you step back and view these organizations with a 21st-century mindset, you realize that a large part of the work
of these companies — delivering search results, news and information, social network status updates, and relevant products for purchase —
is performed by software programs and algorithms. These programs are the workers; the human software developers who create them are
their managers.
Each day, these “managers” take in feedback about their electronic workers’ performance — as measured in real-time data from the
marketplace — and they provide feedback to the workers in the form of minor tweaks and updates to their programs or algorithms.
The human managers also have their own managers, but hierarchies are often flat, and multiple levels of management are aligned around a
set of data-driven “Objectives and Key Results” (OKRs) that are measurable in a way that allows even the electronic “workers” to be guided
by these objectives.
And if your notion of management isn’t stretched enough, consider that the algorithms themselves are sometimes the managers — of
human workers. Look at Uber and Lyft as compared to an old-school taxi service. Cars are dispatched not by a person but by a “management”
program that collects passenger requests in real time and serves them to the closest available drivers. Humans are still in the loop, both as
workers delivering the actual service and as managers who set the rules of the algorithms, test whether they are working correctly, and
adjust them when they are not. Human managers are also called in to deal directly with the human workers, the drivers, when their
performance is called into question by the electronic managers that collect, aggregate, and analyze feedback from customers.
While it is early in this process, you can make the case that the core function of management has gone from managing the business to
managing the bots that are managing the business.
Some further implications of this insight include:
A typical programmer in a 20th-century IT shop was a worker building to a specification, not that different from a shop floor worker
assembling a predefined product. A 21st-century developer is deeply engaged in product design and iterative, customer-focused
development. For larger programs, this is a team exercise, and leadership means organizing a shared creative vision. Technology is not a
back-office function. It is central to the management capability of the entire organization.
And companies whose CEO is also the chief product designer (think Larry Page, Jeff Bezos, or Apple under Steve Jobs) routinely outperform
those whose leaders lack the capability to lead not just their human workers but their electronic workers as well.
In 20th-century organizations, you gain influence by gaining budget to hire more workers. In 21st-century organizations, you gain
effectiveness through your ability to create more workers — of the 21st-century variety. Even in jobs that are not considered “programming
jobs,” the ability to create and marshal electronic resources is key to advancement. A salesperson who can write a bot to “scrape” LinkedIn
for leads has an edge over someone who has to do it manually. A marketer who can build an online survey or data-gathering app has an
advantage over one who has to hire an outside firm. A designer/developer who can build a working application prototype is more valuable
than a designer who is only able to draw a picture.
Managers must become product and experience designers, deeply engaged with customers and their needs, creating services that start out
as a compelling promise and get better over time the more people use them, via a “build-measure-learn” process. A service like Uber is
based on a deep rethinking of the fundamental workflows of on-demand transportation (what used to be called “taxis”) in light of what
technology now makes possible. Before Uber, who would have thought that a passenger could summon a car to a specific spot, and know just
when they were going to be picked up? Yet that capability was already lying latent in smartphones.
There is an arc to knowledge, in which expertise becomes embodied into products. Workers can be “upskilled” not just by training but by
software assistants that allow them to do jobs for which they were previously under-qualified. “The Knowledge” — the legendary test for
London black taxicab drivers — takes years to master, yet with the aid of Waze, Google Maps, and the Uber or Lyft app, virtually anyone can
become a driver for hire, even in a strange city. There is a lot of fear about technology replacing workers, but in what I call “Next Economy
companies,” technology is used to create new opportunities by augmenting workers.
We are just at the beginning of the transformation from an economy dominated by human workers to one dominated by electronic workers.
The great management challenge of the next few decades will be understanding how to get the best out of both humans and machines, and
understanding the ins and outs of who manages whom.
Bots  :
An Internet bot, also known as web robot, WWW robot or simply bot, is a software application that runs automated tasks (scripts) over the
Internet. Typically, bots perform tasks that are both simple and structurally repetitive, at a much higher rate than would be possible for a human alone.
Algorithms :
In mathematics and computer science, an algorithm ( i/ˈælɡərɪðəm/ AL-gə-ri-dhəm) is a self-contained step-by-step set of operations to be performed. Algorithms perform calculation, data processing, and/or automated reasoning tasks.
William Ford Gibson is an American and Canadian speculative fiction writer and essayist widely credited with pioneering the science fiction subgenre known as cyberpunk.
Quotes:
Cyberspace. A consensual hallucination experienced daily by billions of legitimate operators, in every nation, by children being taught mathematical concepts.
Time moves in one direction, memory in another.

Source: http://sloanreview.mit.edu/article/managing-the-bots-that-are-managing-the-business/