AI has become much more real over the last twelve months, transforming businesses, but do leaders fully comprehend the real potential?
It's essential to understand that AI is reshaping the way businesses operate, innovate, and compete; and leading an organisation at a time of such rapid change, requires more than just enthusiasm for technological advancements. It demands a solid, but not necessarily complete, understanding of how emerging technologies can be leveraged to drive meaningful change.
Leaders are tasked with the challenge of not only staying abreast of these rapid developments but also working out how to integrate them in ways that align with the organisation’s strategic goals.
Recent surveys reveal that whilst there is a palpable enthusiasm for the potential, the depth of this understanding varies considerably. According to Gartner, 64% of CEOs believe that the AI advancements of 2023 live up to the excitement surrounding them. Despite the optimism, businesses often lack a comprehensive strategy that looks to fully harness the benefits of new technologies.
This is no criticism, even for those working in the industry it is a real challenge to keep up with the rate of change. It is not practical to expect business leaders to keep up to date whilst also running the business.
What is meant by ‘AI’?
What do leaders need to know? Well, there are a myriad of things, but media, vendors and marketing teams have muddied the waters greatly. Recognising the various forms of AI & automation is important, from generative AI to machine learning, there are several different types, yet many leaders do not fully appreciate the distinctions.
This gap in understanding can really hinder effective decision making. The first question to ask yourself is what are we trying to achieve? It might not be AI that you need! The key technologies being discussed under the banner of AI are usually…
Generative AI is capable of creating new content, can revolutionise creativity and lead to huge leaps in innovation and efficiency.
Machine Learning focuses on improving performance by being fed large datasets, that allows for it to learn and make decisions without explicit programming.
Robotic Process Automation (RPA) is aimed at looking at CRM and core business process, typically with a Business Consultancy to support the programme. Processes like lead to order, order to cash etc. can be tracked through the business system, efficiencies found, and then automation applied to help reduce bottlenecks and lost time.
Automation is about taking away the repetitive and mundane by executing and speeding up processes that are normally carried out by humans.
When AI and automation are combined, they can exponentially increase efficiencies and leaders are beginning to recognise this. Ignore the technologies, look at what problem you wish to solve, or what process you want to accelerate, the technical community will help to decide what solution is going to be needed.
The aim is to augment human capabilities through the appropriate use of technologies that will bring significant cost savings, improved accuracy and productivity gains.
Where are the main opportunities?
Leaders need to be exploring opportunities across multiple domains.
B2B can benefit from the streamlining of complex processes and enhanced decision-making. This might include analysing market trends and customer data to provide actionable insights resulting in the ability to meet client needs more effectively.
B2C should focus on personalising the customer experience. Proactively improving service delivery through intelligent document retrieval, using AI-powered chatbots and recommendation systems will all enhance customer engagement and satisfaction.
Internally it will be about optimising operations and driving efficiencies by reducing administrative tasks, wasted and lost time and increasing the productivity output of users.
Where is the pressure coming from?
The drive typically stems from competitive pressure. McKinsey’s research indicates that peer competition is a significant motivator for AI adoption. Companies are racing each other to stay ahead, driven by a fear of not wanting to be left behind. This competitive scenario forces an urgency to innovate, adopt and encourages the taking of shortcuts in an effort to outperform their rivals.
Pressure to deliver must be ignored, this is something you want to get right, especially with the phase one of the EU AI Act coming into force in 2025.
What about us humans?
We must note that it is just as important to understand the limitations. Whilst these technologies can process and analyse data much faster than us humans, it lacks the ability to make nuanced decisions that require empathy, ethical considerations or human context.
This is why the role of a well-informed leader becomes crucial. It is not only about championing the adoption of AI & automation but must include a balanced approach that integrates the human factor. But it is also important for them to understand the wider implications too. Ethical, societal, data privacy, algorithmic bias and the impact on employment need to be given consideration.
Summary:
While most leaders are eager to champion the new technologies, the understanding may not always match the enthusiasm. AI & automation can surpass human capabilities in many areas, but it cannot replace the nuanced, human, experience based, decision making skills of effective leaders that have been gained through life.
It’s crucial for leaders to balance their enthusiasm with a realistic assessment, ensuring that strategies are grounded and not going to leave the organisation exposed to risk. This needs to be a continuous, cyclical approach to strategy, innovation and education and you will need to train your users in low-code, no-code automation tooling and prompt engineering, and not just as a one off.
A culture of continuous learning and ethical responsibility will form a key component of any business in the next decade. The modern business will depend on informed, strategic leadership and many will decide to create a CAIO role whilst others seek external support, either way this is as much about learning and developing your workforce as it is about the technology… but one skill that will increasingly be required is the ability to ‘forget the old ways’.
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