Managing the Bots That Are Managing the Business

Editor’s Note: This article is one of a special series of 14 commissioned essays MIT Sloan Management Review is publishing to celebrate the launch of our new Frontiers initiative. Each essay gives the author’s response to this question:

“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 already here. It’s just not very evenly distributed.” 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.com, 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, and 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.