AI for Business Leaders: Avoiding Irrelevancy in the Age of Artificial Intelligence

Artificial Intelligence (AI) is being used by businesses around the world, in every industry and market. It is changing the way companies function at all levels and reshaping the relationship with the consumer. Businesses that make good use of AI see increases in efficiency and innovation, while those that fail to do so are being left behind.

The proper implementation of AI in a business is no easy task. It requires knowledge and understanding, foresight and strategy. Business leaders today may find themselves missing key information and concepts, due in part to the fact that traditional training and business school curricula are missing the mark on AI, placing too much emphasis on coding and development and too little on implementation and approach. When this is the case, the consequences can be felt throughout the entire organization.

Fortunately, there are simple steps business leaders can take to develop their understanding of AI and ensure they have the skills necessary to use it to its full business potential.
Why Disruption Is Inevitable
AI is highly scalable and adaptable. New advancements offer novel, more effective ways for businesses to take on traditional challenges.

Uber serves as an excellent example. Previously, people relied on cab drivers to get around large cities because they alone had the knowledge and experience necessary to find and navigate the best routes. Indeed, one study published in April 2000 found that, compared to the general population, London taxi drivers had a significantly larger posterior hippocampus (a region of the brain implicated in spatial memory). In other words, developing the skills necessary to be a cab driver in a large city took many, many years of driving.

Uber addressed this challenge by making strategic investments in location intelligence and machine learning. Uber’s AI is able to predict routes, calculate commutes, offer fare estimates, even coordinate ride sharing. It then put this power in the hands of ordinary citizens, who can now navigate any city in the world better than most unaided cab drivers. Next on Uber’s docket: driverless cars.

Uber is one of many examples. By using AI to offer recommendations based on a user’s history and preferences, Netflix is able to maximize engagement across its audience of 200 million users. Netflix claims that the sophisticated personalization algorithms it uses save the company more than $1 billion a year by keeping users interested in the service. Netflix started its streaming service in 2007. Five years later, Blockbuster rented its very last video.

Finally, AirBNB has been using AI and machine learning to disrupt the travel industry since its conception. In a move of admirable foresight and intuition, the seventh person invited to join the AirBNB team was data scientist Riley Newman. AirBNB now uses artificial intelligence to offer destination recommendations, improve search rankings, calculate property rent, and more. Today, luxury hotel brands like Hyatt and Marriott are partnering with AirBNB to avoid the kinds of losses they saw with its inception.

Market disruption happens when new businesses reinvent simple, reliable, popular products at tremendous scale with minute production costs. This is the power of AI, and there doesn’t seem to be a single market immune to the effects.

How AI Is Changing Businesses Across the Board
Many tasks that rely on human intelligence can be facilitated by AI; some can be outright replaced. As AI becomes more commonplace, more affordable, and is integrated into a greater number of cost-effective, third-party solutions for businesses, departments across the board are finding innovative ways to improve workflows, liberate human resources from repetitive tasks, and gain greater insights from data.

Human Resources: AI can’t replace people, but it can empower them to be more productive. A report by Oracle and Future Workplace found that 50% of HR employees are currently using some form of AI. 65% of respondents were grateful for the tasks AI was able to take over, and many found AI more effective than their managers at maintaining work schedules, solving problems, and managing a budget. This freed up managers to focus on tasks requiring greater creativity and emotional awareness, like coaching employees and creating a strong work culture.

Marketing: There’s no doubt that artificial intelligence has changed the way marketing works. Businesses leveraging AI are better able to personalize their marketing efforts to meet the needs and goals of consumers. Machine learning algorithms are getting better at understanding and even predicting human behavior, especially as people share more and more of their lives online. This allows businesses to personalize communications at scale and respond to customers’ needs, sometimes even before they know they have them.

Sales: AI can help businesses concentrate sales efforts on the leads that are most likely to convert. Greater insights distilled by AI from customer data also help salespeople better understand the customer journey and craft more effective communications and strategies. This very strategy propelled Amazon from its humble beginnings to the largest company in the world.

Customer Support: Personalized customer support efforts and automated workflows allow businesses to offer a more personalized and responsive service. One important way that AI is changing customer support is with the use of Chatbots. Natural language processing and machine learning have made it possible for machines to understand customers requests, deliver simple responses, and direct customers to the appropriate person. This saves customer support departments from thousands of hours spent replying to repetitive requests, freeing up employees to deal with more complex issues where a human touch is necessary.

Information Technology: Unsurprisingly, there are many ways IT departments can take advantage of AI. Automation is an important one. For example, intelligently rolling out patches and updates to thousands of devices, each with its own configuration, can help protect against security breaches. AI can now be used to improve coding productivity by offering intelligent suggestions and testing new applications as humans would. Finally, sophisticated AI built into cybersecurity applications are helping to better detect, respond to and even predict attacks..

Operations: Keeping all the cogs turning requires a keen eye for detail and objective decision-making skills, two things AI excels at. The most complex supply chains, inventories, and production lines in the world benefit from AI. It is now possible for a small team to manage thousands of movements and transactions per day.

Business Leadership is Missing the Mark on AI

Clearly, many businesses are making excellent use of AI. But not nearly as many as there should be. There are a few reasons for these missed opportunities, but often it comes down to a lack of understanding on the part of business leaders. This manifests in a few different ways.

First, executives may have unrealistic expectations of AI that, when unmet, lead to some new solution being dismissed or abandoned. An article from the Harvard Business Review tells us how one executive missed an opportunity to increase productivity because the AI solution proposed to him was “wrong half the time.” That was certainly true—but it was still twice as accurate as the humans then doing the job.

Second, 50% of AI projects fail to get off the ground because they are not being considered as part of a larger whole. Successful implementation requires resource management, infrastructure, personnel training, process management, and more. This failure to see AI holistically creates a “discrepancy between the perceived value of AI and the actual realized value of deploying AI within an organization,” explains Sam Chow, an AI Product Manager and Doctor of Organizational Psychology.

This stems in part from the fact that MBA programs offering tech-focused specializations tend to focus on development and coding rather than implementation, conceptualization and approach. Obscured by the technical minutiae of coding, the forest is being missed for the trees. “The technology itself is irrelevant”, argues Don Schuerman, CTO and Vice President of Product Marketing at Pegasystems. “It’s only a means to an end, a tool that enables you to reach a business outcome.” Understanding how to use that tool is more valuable to leaders than understanding its inner workings.

Finally, executives may be unaware of all the business benefits of AI and how those benefits can be distributed within a business. A 2017 study from Deloitte shows that, while 51% of executives surveyed cited enhanced features, functions and performance of products as a key benefit, less than a third mentioned the ability to create new products, optimize external processes like marketing and sales, pursue new markets, or capture and apply knowledge. This kind of knowledge is key for knowing how to strategically deploy AI and reap the greatest benefits.

Taken together, these gaps in knowledge have stunted the successful implementation of AI in businesses, costing millions in missed opportunities.

How Executives Can Maintain Relevancy

In an interview with Business Because, Jeremy Petranka from the Duke Fuqua School of Business said, “More than ever, managers will need to manage the fear that change induces while also pushing their companies forward. Business leaders who ignore the organizational and cultural effects that this kind of rapid change can cause will inevitably face a crisis.”

With a rapid influx of change brought about by new technology, employees are bound to be fearful of the future and the changes it will bring. It will fall upon business leaders to ensure that the adaptation of new technologies does not cause a decline in employee morale. To do that, however, they will first need to understand how the technology works—not at the level of individual lines of code, but from a more abstract, more strategic point of view.

The executives of tomorrow will need to be able to:

● Develop a firm understanding of what artificial intelligence is and what it can do
● Identify which company problems AI can solve with the best commercial results
● Use a design thinking framework to solve AI challenges
● Place customer experience at the heart of AI strategy
● Determine what data, resources and investments are needed to build a given AI strategy
● Learn how to effectively lead data science and analytics teams and bridge the gap with other departments

To achieve this, there are a variety of resources available to executives and business leaders. There exists a wealth of resources and information available online, including courses, lectures, reviews and more.

Finally, in addition to leveraging external resources, executives can take their cues from members of their own staff. On-the-ground employees, after all, are best placed to speak to their pain points. Having discussed these with their friends and colleagues, they may have even heard of innovative AI solutions others are already using.