By Khalil Zafar
Seldom in the course of history has a technology had as much impact on the corporate sector as Artificial Intelligence (AI).
There is no dearth of prophecies about how AI is going to reform where, how, and if leaders will control corporate decisions in the future. One of the key challenges for human resource professionals and management consultants is to learn about the impact of AI themselves, but also in updating the leadership in a simpler manner – i.e. without becoming the smartest technical person in a room, full of non-technical leaders.
Increasingly, a growing number of businesses soon will spiral towards the use of high impact AI-powered technologies to help close the data-insight gap and expand their decision-making competencies in time critical, pressured situations.
For example, militaries across the world are making effective use of AI-powered decision making, thus laying a groundwork for the organizational leadership for implementing it in their business processes. These AI-powered tools embrace a broad range of systems, including virtual assistants (VA), virtual and augmented reality, process discovery, task mining, and a range of data analytics and business intelligence platforms.
Thus, the question arises: How can AI help future leaders to tackle tough issues and make more effective decisions?
With an increasing set of complexities at work, such as P&L decisions, D&I complaints, geographical diversities and automations, AI technologies can deliver managers and leaders with updated, reliable data and forecasts to encourage and enable the right decisions in a timely way.
65% of respondents report that their organizations are regularly using gen AI, nearly double the percentage from previous survey just ten months ago. Respondents’ expectations for gen AI’s impact remain as high as they were last year, with three-quarters predicting that gen AI will lead to significant or disruptive change in their industries in the years ahead. — McKinsey Global Survey 2023
HOW AI CAN IMPROVE DECISION-MAKING FOR LEADERS
In the years to come, AI-powered tools will help leaders make more effective decisions in at least three main areas:
Live System & Process Tracking
Companies are spending a large amount of effort and budget in developing “People Analytics Systems” within their organizations. Combining it with product and services related data of sales, supply chain, operations and above all HR – leaders will be able to predict and make decisions based on inputs such as procured/manufactured materials, suppliers, HR performance and business units target achievements.
Virtual Enactment
The IT and software industry is going to be the most likely beneficiary of this mechanism. Leaders spend huge amounts on Pay Per Click (PPC), Search Engine Optimization (SEO), and new product market exploration with limited success rate. Along with that, managing and converting leads into a successful customer base is an old challenge for leaders in the IT domain. Immersing the digital marketing and sales team in virtual mock scenarios could help swap roles with the customer and see issues from their perspective.
Making decisions with more data that is more accurate and relevant will enhance the entire product development, marketing and sales process.
3) Decision Advisor
AI is independent of stress, time constraints and limits. In theory, AI can help overcome major decision-making problems affecting leaders, such as limited time to think and discuss, and decision fatigue, particularly when it comes to making decisions under immense pressure. AI tools can help leaders make decisions, which saves time, preserves energy, and frees up a leader’s time so they can spend more time focusing on strategic matters and not on micromanaging.
So far, only 7% of companies use AI in big strategic decisions, such as strategy development or financial planning. At the same time, the importance of the technology for the future is enormous: 75% of business leaders believe that what will set companies apart from their competitors in the future will be determined by who has the most advanced generative AI. — World Economic Forum
IMPLEMENTATION: GUIDELINES FOR LEADERS TO KICKSTART AN AI PROJECT
Leaders, HR professionals and management consultants are making the wrong move of directly trying to implement AI and its tools into the business processes and decision-making procedures. This results in lack of clarity amongst the employees as well as managers.
Redefining Mission, Vision and Values (MVVs)
The starting point should always be the same: Make AI part of the organization’s overall strategy. It should be reflected within the corporate Mission, Vision, Values as well as the organization’s Business Model. This is where the true test of leadership will take place. Leaders should realize that walking the talk, and practicing what they preach is vital to developing a futurist, agile and learning organization.
Remodeling Processes
To achieve the maximum usefulness from AI, business operations need to be remodeled and, in some cases, totally scrapped. The simpler, the better. Onboarding the services of a change management specialist at this stage will help leaders to execute the project with ease. To do this, organizations must first determine and define an operational area that can be upgraded. It might be a non-compliant internal process (such as the finance department’s delay in executing closings each month), or it could be an earlier stubborn problem that can now be addressed using AI tools and data analytics (such as rapidly detecting delays in a product deliveries or harassment cases within the teams).
Upskilling and Reskilling
Aligning an agile process based on trends, combined with AI tools, will require a substantial pledge by the leadership team in terms of developing new skills and behaviors to cope with this new phenomenon. A change is never accepted enthusiastically, especially when leaders/managers think their jobs might be at stake because of automation – something that may result in less human interaction. A corporate culture of delegating tasks to the new technology must be encouraged at all levels. Conversely, leaders should also learn to align themselves and their skills with those of the smart machine processes.
Moreover, new AI and forward-thinking analytic systems can help unearth previously unseen complications that are passive to automated business solutions. Results from these virtual tests can help in refining the algorithms used for AI. As with the innovation step, new AI and analytic methods can contribute to co-creation by proposing unique methodologies to improving existing processes.
Challenges: Long Road Ahead
Governance -- Even if an AI system of the present and future enhances a leader’s knowledge, it won't be enough to ensure timely decisions if the organization’s bureaucratic mindset demands lengthy, process-oriented, decision-authority grids from the leadership team. That is the reason why, to truly harness the benefits of real AI, leaders at all levels (supervisors to board members) need the authority to make and act on decisions with AI assistance.
Biasness, Diversity and Data Confidentiality -- Currently, HR departments are utilizing AI-based tools for their talent acquisition (recruitment and retention) needs. Since the systems are in their infancy, often times, qualified and skilled applicants are overlooked based on their predeveloped and structured CVs (resumes) that clash with predetermined standards of qualification, geographical, gender and age-related criteria. Once these algorithms overtake the performance management and rewards systems – the notion of human element will be thoroughly missed. Wrongful dismissals, inaccurate performance reviews based on a system’s available data is likely to cause lawsuits and talent shortage for potential employers.
Since there are limited policies, legislation and training on data and privacy collected and stored through AI systems, leaders will need to take more care in the coming years. A general foundation was laid in 2016, when GDPR legislation was enacted to protect the personal data of EU workers, giving people more control of their data. In the United States, the California Consumer Privacy Act (CCPA), offers decision-making guidelines for the leaders. There is still a long way to go in creating positive strides on this issue.
Collecting and storing confidential information will force leadership team to reorganize how they store and use Personal Identifiable Information (PII). As a result, investments to strengthen the security of IT systems is likely to become an increasing priority for businesses as they seek to eradicate any exposures and prospects for surveillance, hacking, and cyberattacks.
Conclusion
AI is growing more powerful, becoming more precise, accurate, and prompt. Leadership teams across the board must continue to develop their own skills, capability and judgment, so that they can use AI in the right way while alleviating the associated risks. But can AI present the more unbiased experiences, feelings, and compassion that makes our world a better place to live and work, without callous, devious judgment? Hopefully, but that remains to be seen.
On the bright side, leaders and managers today have more reliable and accurate data, coming from a wider range of diversified sources than ever before. Surprisingly, however, the data surge has only strengthened the demands on executives to get critical decisions correct. The AI tools of today will be refined in the future based on our learning and mistakes, and once largely corrected will positively lighten the mental load and expand decision-making efficiency in lot of ways. The future of business management is Internet of Processes (IoP). Yes, you read it right, Internet of Processes – not Internet of Things. IoP: Automated Collaborated Processes making AI-based decisions.
The path forward is exciting and result oriented. AI will not just be a necessity, but our overall ethical responsibility for the key decisions of our businesses.
Khalil Zafar is a world-renowned futurist, HR and management consultant, and an authority on the Future of Work. Based in Pakistan, he is the author of the book Future of Work Simplified and has designed and executed AI-Future of Work projects for international government entities and corporations as a consultant and advisor. He regularly speaks and writes at the international level about impact of AI on HR and leadership. He can be reached at Khalil.zafar11@gmail.com or through LinkedIn, at:
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