The current speed of development and the potential applications of Artificial Intelligence (AI) suggest that it's time for CEOs to pay attention. So what are the questions every CEO should be asking?
Here are the ten questions that I believe to be most important in order to assess and invest in AI's transformative potential:
1. What's the fuss about? - From security to blockchain technology and 3D printing - every new technology issue or development comes with exhortations for CEO's to place it top of their agenda. However, in the case of AI it may well be the most important change we'll see in the philosophy, practice and management of business. AI draws on - and is combining with - exponential performance improvements in technologies such as computer hardware, big data management, the Internet of Things and the fields of machine learning, neural networks and robotics. As a result, AI is beginning to fulfill its true potential of transforming businesses and replacing even senior management and leadership roles. CEOs have to make sure they are investing the time and attention to understand what AI is, why so much is being invested and where the opportunities are.
2. What's its potential? - The place to start is to educate management about its potential and undertake internal analysis of where it could be deployed and what competitors are doing. Medium to large enterprises in particular are bringing in AI experts and creative future thinkers to take a broader perspective of the potential roles AI could play from smarter production management, to customer targeting and broad-based decision making.
3. How fast is it moving? The pace of AI development has caught most unaware. We are beginning to understand the scale of the investment being made by companies as diverse as technology-centric firms like Google, IBM, Microsoft, Uber and Baidu, auto-makers, airlines, and banks. In some cases, the firm is literally "betting the ranch" on AI. Many of the biggest developments and research projects are kept under the radar until launch and we can only speculate on the spectrum of what we might see next - from robot lawyers to ultra-intelligent mobile personal assistants and total home monitoring and management systems embedded in our appliances.
4. How deep should we take it? - Many firms are looking at relatively narrow deployments to automate rule-based decision making and predict future demand and customer behaviour from accumulated data. Others are looking at much broader deployments such as intelligent HR, finance and legal advisors and real-time data analytics of live transactions. Deployment of AI could lead to deep insights into the potential behaviour of employees, customers and partners - how deep should we take this? For example, how would we use information from an HR system that suggested an employee has the potential to commit fraud?
5. Could it take the CEO's Job? Perhaps some of the most extreme applications include the creation of "human free" automated businesses where everything from strategy to operational processes and all business rules are embedded "in the system". These so-called "distributed autonomous organisations" could become increasingly common in a wide range of sectors. They are already being used to manage millions of transactions - e.g. the automated dispute resolution systems in online auction platforms.
6. Who should lead? - The temptation is to see this as just another Information Technology (IT) project and hand responsibility to the IT director. However, some see it having a much broader role and are making it the responsibility of the CEO, COO or business transformation head to drive the identification, piloting and application of AI solutions across all aspects of the business.
7. What would success look like? - With AI, there are likely to be a number of unsuccessful experiments - indeed up to 90 per cent might fail as promising ideas fail to yield viable solutions. The mantra should be to "fail fast and cheap" - bringing in suppliers, customers and other value chain partners early on to see if there is commercial merit in an idea. There can be as much learning from a failed project as a successful one.
8. How do we preserve the feminine? Organisations and individuals display a mix of feminine and masculine characteristics that manifest themselves in how we interact, organisational culture, service philosophy and the assumptions and beliefs that underpin decision making. The challenge is to maintain the feminine in the human face of the organisation, and avoid the tendency for AI systems to display a more masculine and "robotic" persona.
9. How will staff respond? AI is already being deployed to automate clerical, manual and semi-skilled labour and is now supporting and replacing professionals in domains such as engineering, medicine, legal, and accountancy. What's our strategy for overcoming resistance to change and helping those who will be displaced by AI? How will we ensure those making it to senior positions have the necessary experience and expertise if we are reducing the number of staff further down the pyramid?
10. How do we address social impact? - There is a growing concern that if every firm replaces a large part of its human workforce with smart software and robots, unemployment levels could rise on a permanent basis. Estimates vary from 30-80 per cent of all current jobs that could be automated out of existence in the next 5-20 years.
As a CEO, how should we address this and the potential criticism that we are creating a two-tier society? Should we support the ideas of a guaranteed basic income for all - as is being explored by Finland, Canada and the Netherlands?
The pace of development and potential of AI mean that it is not something we can afford to put off - it is perhaps the single most important area of decision making business leaders will face over the next few years. The depth of a CEOs understanding of AI could be the crucial differentiator between success and failure of firms in a fast changing world.
Rohit Talwar, Fast Future Publishing
Image Credit: Michael Dain / Flickr