3 ways CEOs should respond to Artificial Intelligence BCG & MIT report

3 ways CEOs should respond to Artificial Intelligence BCG & MIT report

Develop an Intuitive Understanding of AI
The notion that executives and other managers need at least a basic understanding of AI is echoed by executives and academics. J.D. Elliott, director of enterprise data management at TIAA, a Fortune 100 financial services organization with nearly $1 trillion in assets under management, adds, “I don’t think that every frontline manager needs to understand the difference between deep and shallow learning within a neural network. But I think a basic understanding that — through the use of analytics and by leveraging data — we do have techniques that will produce better and more accurate results and decisions than gut instinct is important.” Avi Goldfarb, professor of marketing at the University of Toronto’s Rotman School of Management, notes, “You worry that the unsophisticated manager might see one prediction work once and think that it’s always good, or see one prediction that was bad and think it’s always bad.” Joi Ito, head of the MIT Media Lab, contends that “every manager has to develop an intuitive understanding of AI.

To develop their understanding of digital, many executives have taken trips to Silicon Valley to experience digital natives, design-thinking approaches, fail-fast cultures, and more. While these are all core to building digital businesses, such trips are not particularly rewarding to learn about AI. For those who have already been exposed to the marvels of robots, self-driving vehicles, or poker-playing machines, there is little new to experience at AI companies. Instead, managers should take some time to learn the basics, possibly starting with simple online courses or online tools. They should understand how programs learn from data, maybe the most important facet of understanding how AI can benefit a particular business.

Organize for AI

Adopting AI broadly across the enterprise will likely place a premium on soft skills and organizational flexibility that enable new forms of collaboration, including project teams composed of humans and machines.
Our survey finds companies exploring many approaches to developing AI capabilities. Pioneers are relatively evenly split among centralized, distributed, and hybrid organizational models. Investigators and Experimenters also pursue a mix of approaches, but almost 30% of both clusters have not yet set clear responsibility for AI in their organization. Some 70% of Passives also have not even started to lay out clear responsibilities for AI initiatives, perhaps (in part) because fewer than 50% of Passives see AI having a large effect on their processes and offerings in the next five years.
Ultimately, a hybrid model may make the most sense since many companies need AI resources both centrally and locally. TIAA, for example, has an analytics center of excellence and a number of decentralized groups. “The center of excellence is not intended to be the group that will provide all analytics for the entire organization. It provides expertise, guidance, and direction to other internal teams that are working to deploy AI and analytics,” says TIAA’s Elliott.
While companies in all four clusters rate cultural resistance to AI approaches relatively low on the list of barriers, only about half said that their company understands the required changes of knowledge and skills for future AI needs. Jessica Tan, group executive vice president, group chief operating officer, and chief information officer of Ping An, says the biggest challenges at her company have been getting units to work together; acknowledging the fact that “humans don’t want to train algorithms”; establishing centralized and decentralized technology teams; and finding the right people. It’s looking in particular for three types of people: technical people who have the means to try different ways of working, technical people who understand specific business domains, and people with consulting or project management skills who are able to network and bring them all together.

Re-think the Competitive Landscape
More than 60% of respondents say that a strategy for Al is urgent for their organizations, but only half of those say their organizations have a strategy in place. (See Figure 11.) In terms of company size, the largest companies (those with more than 100,000 employees) are the most likely to have an AI strategy, but only half (56%) have one. While the majority of organizations see developing an AI strategy as urgent, only half already have one. Amy Hoe, chief technology and operations officer of insurer FWD Group, says that she sees access to data as key for competitive advantage for her company. FWD aims to secure a wide range of data sources, including partnerships with other companies, such as telecommunications companies and ride-hailing services, its customer base, agencies, social media, the public domain, and external data analysis providers. As the volume of data doubles every few years, gaining privileged access to data is nonstop work.

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