MIT Sloan Executive Education Blog

What is algorithmic business thinking?

Algorithmic business thinking

It is well understood that algorithms have allowed organizations to scale in ways that weren’t possible even five or 10 years ago. From Amazon’s recommendation engine to dynamic pricing for airlines to improving fleet productivity, algorithms offer big pay offs for organizations seeking to rapidly scale their products and services.

In light of the technologies powering our progress, enterprises need to consistently upskill their workforce and rethink how to approach organizational strategy, leadership, and management. According to Paul McDonagh-Smith, Senior Lecturer and Digital Capability Leader at MIT Sloan Executive Education, companies that want to keep pace with innovation need to understand what's behind the technology and translate that into practical opportunities for sustainable growth.

McDonagh-Smith specializes in translating and converting computer and data science into clear and measurable business value for teams and organizations. He is behind the new, self-paced online course Algorithmic Business Thinking: Hacking Code to Create Value, which he co-teaches with a team of renowned MIT Sloan faculty. In this course, McDonagh-Smith and his colleagues introduce the concept of algorithmic business thinking—a framework for understanding the key principles of algorithms, code, and data and a methodology for applying those principles across role and departments.

“Algorithmic business thinking can allow us to upgrade a number of business activities and functions and optimize them for the digital economy,” explains McDonagh-Smith. “When you understand the building blocks of these technologies, you can apply them not only to products and service but to business functions like finance, sales, or marketing.” (For an in-depth example, learn more about how an MIT-developed, algorithm-powered approach to recruitment can help companies draw talent from a more diverse pool of job applicants. Read now.)

Creating value with algorithmic business thinking

McDonagh-Smith’s new course pulls back the curtain on AI and other transformative technologies to show how they’re built, how they work, and how they can be used in your business. While this program will introduce some basic coding principles (Python), it is less about how to code and more about illuminating the building blocks of algorithms so that you can re-use those same building blocks to create new business value. The frameworks taught in the course will enable you to:

  • Understand how algorithms, data, and code can be applied to improve productivity, competitive advantage, and employee/customer satisfaction
  • Write, run, and improve your own algorithms
  • Communicate in a common digital language across all organizational job roles and business functions
  • Understand building blocks of human bias and their relationships with algorithmic bias
  • Redefine the roles and responsibilities of both humans and machines so that together they can create, capture, and deliver more value than either would on their own

You will walk away from this program with a practical playbook to help you and your teams apply algorithmic business thinking in your organization wherever and whenever it’s useful. Upcoming sessions of this course include January 13–March 3, March 24–May 12, and June 2–July 21.



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