Computational Leadership: Connecting Behavioral Science and Technology to Optimize Decision-Making and Increase Profits

By Brian R. Spisak

Apply the latest computational technologies to your leadership practices

In Computational Leadership, renowned leadership researcher Dr. Brian R. Spisak delivers a paradigm-shifting exploration of the use of simulations, network analysis, AI, and other computational approaches to fundamentally improve all aspects of leadership. With interviews from leaders of IBM, JPMorgan Chase, and Microsoft, this book sits at the intersection of cutting-edge science and technology, leadership research, and decades of the author's own first-person knowledge of leadership best practices.

The author offers readers a holistic and practical framework for utilizing advancements in leadership technology. He also provides:

• Concrete strategies for improving interpersonal relationships and morale in remote working arrangements
• Evidence-based techniques for increasing diversity, equity, and inclusion in hiring and promotion
• Ways to mitigate the fragility of "just-in-time" supply chains and harness the effectiveness of nascent blockchain and digital twin resources

An essential guide for managers, executives, board members, and other business leaders looking for an alternative to leadership strategies based largely on intuition and personal experience, Computational Leadership will earn a place in the libraries of anyone ready to apply modern technologies to the age-old art and science of leadership.

• Language: English
• Publisher: Wiley
• Release date: May 2, 2023
• ISBN: 9781119984061

Book preview

BRIAN R. SPISAK

COMPUTATIONAL LEADERSHIP

Connecting Behavioral Science and Technology to Optimize Decision-Making and Increase Profits

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Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

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I dedicate this book to humanity's curious, enthusiastic, and prosocial nature.

It's time to shine!

Introduction: How a Flood in Johnstown, Pennsylvania Inspired Computational Leadership

In 1880, Henry Clay Frick, chairperson of the Carnegie Steel Company and one of the wealthiest people in the world, led a group of investors in purchasing an abandoned reservoir, which they converted into the South Fork Fishing and Hunting Club. It was a playground for the wealthy elite of the day. A place where they could escape the chaos of America's industrial revolution.

Unfortunately, during development, leadership made three doomed decisions regarding repairs to the reservoir's dam—which was then the largest earthen dam in the world. They lowered the dam by over three feet to make its top wide enough for a two‐lane road, they added debris‐gathering fish screens in the spillway to maintain fish stocks, and they decided not to replace drainage pipes, which were sold off for scrap by the previous owner. The Club's leaders took these actions despite continued warnings from engineers that the dam's modifications and insufficient repairs were creating a situation for catastrophic failure.¹

The stage was set for crisis, and in less than a decade of purchasing the dam, the possibility of failure became a horrific reality on May 31, 1889. After record‐breaking rainfall, the dam broke and my hometown—Johnstown, Pennsylvania—was leveled with 20 million tons of water, killing 2,209 people and accounting for approximately $534 million in damage (in 2023 money). The flood, at the time, was the worst disaster in US history. It utterly devastated the city, and it left an ugly scar on Henry Clay Frick's legacy simply because he was too narcissistic, too short‐term focused, and too stubborn to change his self‐interested behavior.²

So what does this have to do with computational leadership? It's a cautionary tale against two perilous gambles: ignoring data and science, and shirking investment in necessary technology. These are the unsustainable choices of impoverished leaders prioritizing business as usual over lasting resilience. They're the decisions of people succumbing to the dark side of leadership.

Fortunately, the future of leadership introduced in this book is much brighter. Innovative leaders will unlock new, sustainable, and equitable ways of creating value with a fantastic array of digital tools and techniques. They will gain next‐level vision to make better choices in times of complexity and uncertainty. And they will create environments where self‐interest and group interest work in unison.

Leading with Digital Vision

To get started, first ask yourself how you want to be remembered. Do you want to leave an infamous Frick‐like legacy, or do you want to break new ground that ushers in remarkable changes to business and society? Because the true standout leaders display vision, courage, curiosity, resourcefulness, sustainability, and a keen sense of experimentation. They clearly articulate key questions related to core business and use all available data, science, and tech—while leveraging their human and social capital—to create previously unseen opportunities. The great ones, in short, work like gifted scientists searching for deeper meaning and truth.

A direct path to this bright future is through what I call computational leadership science (CLS)—that is, the study and application of leadership at the intersection of trailblazing science and technology, well‐established research, and invaluable knowledge gleaned from practice. As I mentioned in a March 2022 Harvard Business Review article, CLS allows businesses to better anticipate, address, mitigate, and even benefit from the tidal waves of disruption one's organization is going to experience in the months and years ahead.³

You can think of CLS as a set of digital golf clubs, and CLS advisors like me as digital golf pros helping you make the right choices. During the early stages of digital leadership, for example, a wellspring of digital clubs emerged. There is now an overabundance of choice, with hundreds of all hype, no help clubs set to derail your performance. Leaders, metaphorically speaking, might end up buying an overpriced driver when a less expensive alternative works just as well. Even worse, without a digital golf pro, they may end up using the wrong club for the shot, like someone hacking away with a $2,000 driver at a ball in a sand trap.

CLS and CLS advisors will help you avoid these problems and take your performance to the next level with well‐chosen tools. In the chapters to come, you will learn both what clubs are available and which one to use for each shot. And, by the end of the book, it's my goal to make you a CLS‐driven leader—or leader in the making—prepared for society's increasingly digital future.

This book, therefore, is not a technology‐centered gospel espousing the unquestionable value of all things tech, all the time. You're the leaders and followers exhibiting agency, and you're at the center of this CLS revolution. The shot is yours to take, not the machine's. As the digital golf pro with thorough knowledge of both the course and the different clubs, I will simply help you choose the right club and make suggestions on how to use it.

The Beauty of Leadership

Before diving deeper into CLS and how it can turbocharge your value, let me explain why I'm fascinated by leadership.

LEADERSHIP IS SCALABLE. Leadership can orchestrate everything from two innovators in a garage poised to disrupt an entire market to worldwide pandemic responses saving millions of lives. The largest employer on the planet—the US Department of Defense—coordinates the efforts of over 2.91 million employees, for example. Leadership, simply put, is present in the smallest groups, the largest groups, and everything in between.

LEADERSHIP IS FLEXIBLE. From cold wars to warm relations, leadership makes a difference. This adaptive process is able to adjust across a varied organizational landscape. Leadership can be used to battle for market share, to cultivate prosocial HR practices, to explore new entrepreneurial opportunities, and to refine established ways of working. Leadership styles and practices also vary according to the situation. At times, collective and transformation leadership emerges; at other times, directive and transactional leadership comes to the forefront. Like water in a river, leadership boosts coordination by aligning with—and eventually shaping—the situation.

LEADERSHIP IS UNIVERSAL. Leadership is (and was) present in all known cultures and societies. Leadership is also common across most social species, from primates and wolves to cows and ants. Leadership even occurs between species where humans are the followers: for example, there are fishermen in Brazil who follow dolphins. The dolphins herd schools of mullet to the shore where the fishermen are waiting with nets. The dolphins then strike the water with their heads or tails to signal when the fishermen should cast their nets. The outcome of this rudimentary but effective leadership dynamic is a mutual payoff: the fishermen get a large haul of easily caught fish and the dolphins get individual fish separated from the school.4,5

This is the beauty and value of leadership. It's scalable, flexible, and universal. At the extremes, leadership can ramp up to vast numbers, connecting people across the globe—or scale down to dyadic relationships where unique interpersonal bonds drive grassroots change. Leadership can also establish cooperation between groups one day and transform to defend against outside enemies the next. Effective leaders can then adjust these factors to meet the needs of, and influence, any situation, from green policy and supply chains to financial practices and crisis management. The key is adopting the right tools and techniques to harness the scalable, flexible, and universal power of leadership.

Defining (Digital) Leadership

The first step in learning how to fully wield the power of leadership is clearly understanding what it is and is not. A leader, of course, is an individual, while leadership is a process incorporating leaders, followers, and the situation. Leadership, as a people process, dives into volatility, uncertainty, complexity, and ambiguity—VUCA environments—to innovate solutions and discover new opportunities. An effective leadership process eats VUCA for breakfast using all available tools, techniques, and human‐social capital at its disposal.

Also, leadership is typically thought of as a soft intuitive skill, while management is a hard science, but those lines are blurring, and the days of purely intuitive decisions are over. Technological innovation, (big) data, an army of analytical experts, and savvy leaders are vaporizing the idea that leadership is purely a soft skill. Gone are the days of winging it based on gut feelings—at least for those who want to remain competitive and sustainable. Instead, business and society is on the cusp of a shift where ALL aspects of leadership—from ensuring inclusive engagement to creating sustainable supply chains—are overhauled through the application of computational methods, including AI, network analysis, predictive modeling, and simulations.

Most leadership processes are starting to incorporate this approach where—at the very least—intuitive decisions are data informed. Netflix, for example, combines advanced viewer analytics with years of experience when selecting content.⁶ This evolution of leadership means the use of data, science, and tech is a must‐have for leaders wanting to improve profits, increase growth, streamline operations, and generally optimize decision‐making.

The Dawn of Computational Leadership Science

Though the critical imperative for leaders to use all available data, science, and tech is nothing new—as the opening Frick example proves—society's current spring of innovation is rapidly increasing the effectiveness of leadership. Data and tech are providing leaders with the power to use social capital and drive change like never before. It's truly a fundamental shift in leadership.

Leaders now have the digital clubs to avoid the traps of an analogue past. They can go beyond old‐school practices such as come back to the office because I said so leadership, and they can break good enough habits inhibiting exploration and growth. These are post‐digital leaders who have the clubs AND the ability to use them. They combine knowledge gleaned from practice, innovative technology, and decades of leadership research to make and save organizations billions—while driving unprecedented levels of innovation and sustainability.

CLS will help leaders strengthen interpersonal relationships and morale in the era of remote working, and it will increase diversity, equity, and inclusion by separating a leader's biased wants from their actual needs in hiring and promotion. CLS will help mitigate fragile, just‐in‐time supply chains and corner the market on complexity with the power of quantum computing—the so‐called quantum advantage. CLS‐driven leaders will also connect and coordinate a global network of collective intelligence to tackle society's biggest challenges.

CLS, simply put, is the new standard for leadership excellence in a time of unprecedented economic, environmental, social, and technological disruption. Hesitate, and the near future is going to feel alien and uncertain. Be proactive with CLS, and you'll guide sustainable change with purposeful intent.

A Road Map for Building Your CLS Capacity

The goal of this book is to ensure you stay on this sustainable path to growth. In Part I, we'll explore key challenges affecting every organization. First, I'll review what we know about CLS in relation to leadership development, employee engagement, DEI (diversity, equity, and inclusion), sustainability, crisis leadership, and employee health and well‐being. I'll then discuss how leaders can use CLS to discover hidden opportunities embedded in these core organizational factors. Finally, I end each chapter with interviews of senior leaders from IBM, JPMorgan Chase, Microsoft, WebMD, and more who shared with me how they're using CLS to grow and succeed.

By reading Part I as a series of steps, you'll better understand how all of the different data and tech puzzle pieces fit together to form a holistic view of organizational leadership. That said, if you prefer, feel free to read only the sections specific to your needs. Just keep in mind that in skipping any of the chapters in Part I you might miss out on cross‐functional seeds for growing next‐level solutions.

In Part II, I'll provide you with a method for both clearly defining any challenge you're facing and assembling CLS teams to co‐create opportunities. This is where you unleash the full potential of CLS. You'll expand your set of digital clubs, knowing which one to use for each shot and how to use it. From strengthening personal relationships to improving strategic decision‐making, CLS will help you redefine what it means to be a great leader.

My ultimate (optimistic) goal with this book is ensuring that no one ever again relies on the dated and dangerous practices of people like Henry Clay Frick. Instead, I want you to carve out a new and innovative leadership niche that's connected, sustainable, and obsessed with stakeholder value. At the end of the day, CLS‐driven leaders have an opportunity to make a distinct impact on the timeline of leadership, and you can be part of this renaissance. Now, let's begin your journey.

Notes

1. The Dam Was Owned by the South Fork Fishing & Hunting Club, Johnstown Area Heritage Association,https://www.jaha.org/attractions/johnstown-flood-museum/flood-history/the-club-and-the-dam/.

2. David McCullough, The Johnstown Flood (New York: Simon & Schuster, 2007).

3. Brian R. Spisak, How Data Can Make Better Managers, Harvard Business Review, March 2, 2022, https://hbr.org/2022/03/how-data-can-make-better-managers.

4. Brian R. Spisak, Warriors and Peacekeepers: Testing a Biosocial Implicit Leadership Hypothesis of Intergroup Relations Using Masculine and Feminine Faces, PLOS ONE 7, no. 1 (2012): e30399, https://doi.org/10.1371/journal.pone.0030399.

5. Paulo C. Simões‐Lopes, Marta E. Fabián, and João O. Menegheti, Dolphin Interactions with the Mullet Artisanal Fishing on Southern Brazil: A Qualitative and Quantitative Approach, Revista Brasileira de Zoologia 15 (1998): 709–726, https://doi.org/10.1590/S0101-81751998000300016.

6. Gregory Ferenstein, Netflix CEO Explains Why ‘Gut’ Decisions Still Rule in the Era of Big Data, Forbes, January 22, 2016, https://www.forbes.com/sites/gregoryferenstein/2016/01/22/netflix-ceo-explains-why-gut-decisions-still-rule-in-the-era-of-big-data/?sh=61893911e09c.

PART I

LEARNING ABOUT COMPUTATIONAL LEADERSHIP

Chapter 1

Developing the Roberto Clementes of Leadership

One of my joys is diving into the backstories of leaders. I look for trends in their progress the same way I study baseball to see what separates the great from the good. I want to know what next‐level leaders do to elevate above the average. Figuratively speaking, I want to know what makes them the Roberto Clementes of leadership—a baseball great known for his tireless contributions both on and off the field.

I find that the Clementes of leadership know how to deliver results in the face of extreme adversity. They have a keen sense of their core values, they work hard AND smart, they make sacrifices, they prioritize stakeholder value, and they continuously take on board new information to improve their game. They also know that leadership development (LD) is a focal point for greatness.

Whether it's onboarding high potentials, growing a network of informal leaders, or grooming the next generation of senior leaders, LD drives an organization's trajectory. It makes a significant impact on leadership capacity, and leadership capacity makes a significant impact on performance. LD, simply put, is at the center of sustainable growth.

The goal of this chapter is to help you nurture this growth with the latest in science and tech. We'll start with summarizing existing work to give you an idea of what experts know about LD. We'll then get to the details of how you can use computational leadership science (CLS) to foster next‐level leadership. Finally, in the Q&A section, we'll see how IBM—one of the best at developing talent—is taking steps to boost its LD with digital innovations.