Rotman Management

The Algorithmic Leader

You have said that in today’s environment, “every company is an algorithmic company, whether it knows it or not.” Please explain.

Mike Walsh: We often assume that only purely digital companies like Google or Netflix can be called ‘algorithmic’ because their technology and infrastructure are all based on data and algorithms. But the reality is that every type of organization, at every scale, will soon live and breathe by its capacity to leverage data, automation and algorithms to be more effective and create better customer experiences. Whether you run a big factory making automotive parts or a small dry cleaner in Brooklyn, your future is likely to depend more on how well you leverage the data and information generated by your activities rather than how well you manage the traditional levers of a business.

Because of this, you say leaders need to become ‘algorithmic leaders’. How do you define that term?

An algorithmic leader is someone who has successfully adapted their decision making, management style and creative output to the complexities of the machine age. Algorithms are here to stay. The secret lies in knowing how to lead organizations that use and depend on them. The leaders we’ve looked up to and tried to emulate in recent years were all born and bred for a very different age. They are essentially products of an analog age, where you could predict with a greater degree of accuracy how your business was going to unfold. Imagine: You could actually think about putting together a five-year plan!

Algorithmic leaders are different

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