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Facing the AI perfect storm

[Artificial Intelligence]
We are in the middle of a winner-take-all industrial revolution powered in part by artificial intelligence. Many of our leading companies and employers are blowing it.

Artificial intelligence is a game changer. We all know that. But is it good? Is it bad? There’s no shortage of opinions. On one hand, media and social channels are full of dire predictions: AI is killing jobs, robots will soon be in charge…and did you hear about that self-driving car that crashed? But then you learn about new advances in life-saving drugs powered by AI, and how AI is improving customer service and efficiency within organizations.

For leaders and strategists, AI poses both opportunities and challenges. How to choose what to focus on? What to try? What to fund? And is AI even ready for prime time?

Facing the gut-check moment

All this uncertainty is killing AI for many companies. We’ve done it to ourselves by building inflexible organizations and processes. Even worse, we have turned risk management into a core function of most major enterprises.

As a result, many organizations are not set up to handle game-changing and complex technologies like AI. The AI “virus” is often expelled by an unwelcoming corporate immune system that seeks to destroy it in a misguided attempt to preserve the status quo.

Uncertainty around AI’s future is used as a weapon to stop all forward progress. It often sounds something like this:

I would love to invest in AI-technology X. But how do we know it will work? What’s the ROI? What’s the payback period? What if it doesn’t work – will our brand suffer? Show me the full business case. Who else is doing this?

It’s enough to beat even the toughest AI innovators into submission. What we have is a perfect storm: AI prompts reinvention, reinvention takes time, and reinvention success is uncertain. It’s a gut-check moment for strategists and leaders alike.

Risk takers and rule breakers wanted

All one has to do is look at GE’s recent performance and the revolving door of CEOs to see what gut check moments really look like. Jeff Immelt, former CEO now twice removed, set GE on a new path, by refocusing on a few core businesses. He also moved GE from a pipeline (old school) to a platform (new school) business, one capable of offering advanced customer-centric AI products and services.

It seemed like Immelt was on the right track, certainly for the long term. Problem is, neither the market nor the board had enough patience, backbone or belief to stay the course. So, they tried another CEO, but he didn’t work out either (after just over a year on the job). Now there’s a new guy, Lawrence Culp Jr., the first outside CEO in GE’s 126-year history. His remit is turnaround. All of a sudden, we’re not talking innovation, customer centricity and AI, we’re talking about fixing problems. And that’s depressing…or is it?

Entrepreneurs have found a way to capitalize on AI. You don’t see Apple resting on its laurels, milking the iPhone for all its worth. Sure, recent announcements about new credit cards, streaming and news services are risky, but Apple CEO Tim Cook knows well how the game is now played. Apple doesn’t have outdated internal approval processes, and it doesn’t have a board asleep at the switch.

We are in the middle of a ‘winner take all’ industrial revolution powered in part by AI. Many of our old and largest companies and employers are blowing it. But there are glimmers of hope. Even a so-called old-economy player like Hudson’s Bay is figuring it out, so it can survive and thrive beyond its current age of 348 years. We can figure this out. It’s pretty simple.

We need gutsy boards that will truly tolerate risk-taking and even mistake-making. We need resilient rule-breaking CEOs. We need tech-savvy visionaries. We need to find them – or create them. Quickly. We live in extraordinary times. We need extraordinary people. As George Bernard Shaw once said:

"The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man."

Of course, we now have women to throw into the mix, but you get the point. What we need are a few more unreasonable people.

This column was first published by Smith School of Business.

Elspeth Murray is an associate professor at Smith School of Business, associate dean of MBA and Masters Programs, and director of Queen’s Centre for Business Venturing.