In today’s rapidly changing business environment, Artificial Intelligence (AI) is making its mark, streamlining processes and ways of working, predicting outcomes, informing strategic planning efforts and making various business recommendations. It’s hard not to be captivated by the magic of algorithms, but we must remind ourselves: data based on algorithms only, in any form, should be used with caution and not as gospel.
A few years back, leadership teams had a tendency to hang on every word of partners from the ‘Big 4’ consulting firms. These words were treated as gold, even when other, perhaps more pertinent, and more informed opinions from within and across the organization were readily available. This was sometimes done to the detriment of the organization and the organizational culture. Unfortunately, this blind faith has now shifted to AI, with many leadership teams viewing its outputs as the final word, often ignoring the human instinct, institutional knowledge, industry specific experience, or alternative data points that could be critical.
AI is a Valuable Tool, but not a Crystal Ball
As highlighted in a Harvard Gazette article, there are mounting ethical concerns about AI’s increasing role in decision-making. AI models operate based on data they are fed. However, if this data contains biases (often it does because humans, with all our biases, create them), the AI can make skewed decisions. Relying solely on such models can lead to flawed strategies and can even perpetuate existing societal inequalities.
Moreover, AI does not possess emotional intelligence. It doesn’t understand organizational culture, individual motivation, or team dynamics – factors that are often crucial for making sound decisions, especially in leadership roles.
The Potential Perils of AI Over-reliance
Pew Research suggests that the public’s biggest worries about AI revolve around the potential for misuse, decisions made without human involvement, and data privacy. These are real concerns that businesses must consider. When an algorithm decides without human intervention, it lacks the ability to consider nuances or the ‘grey areas’ that often require a human touch. Sometimes the numbers don’t provide the whole picture of what’s happening within a team, a culture, a marketplace or an industry.
In a thought-provoking article in TIME, the potential dangers of not treating AI as a tool (rather than a solution) are emphasized. Leaders who fail to question or understand AI’s decision-making process run the risk of making uninformed choices or ignoring other key data.
Furthermore, the MIT Technology Review sheds light on a pressing issue: AI’s decision-making process can be inscrutable, even to its creators. It’s like driving a car without understanding how its engine works. It’s difficult to understand why leaders would be comfortable with that, especially when business stakes are high.
What Leaders May Want to Consider Instead
Leadership teams must approach AI as a tool to enhance, not replace, human decision-making. A report from the European Parliament outlines the challenges and opportunities in AI. It suggests that understanding the underlying mechanics, ethics, and implications of AI is vital for leadership teams. It’s not enough to use AI; understanding its strengths and limitations is crucial.
Here are a few best practices:
Education and Training – Leadership teams can invest time in understanding how AI works in their specific business context. This doesn’t mean becoming data scientists but does involve being informed users and AI consumers.
Diversify Decision-Making – Combine AI-enabled recommendations with experience and trusted human insights. Engage experienced team members from diverse backgrounds and informed expertise to weigh in.
Ethical Use – Always use AI ethically. This involves ensuring data privacy, understanding, and avoiding biases in data, and using AI to complement human roles, not replace them without justification.
Constantly Review and Update – The business environment is changing rapidly, and so is data. Regularly review and update AI models to ensure they’re aligned with current realities.
AI has made great strides within the environment and still holds great promise, and it certainly can be a transformative force for businesses. However, it’s essential to remember that it’s a tool created by humans and has its limitations and at this time certainly has flaws. By combining the strengths of AI with informed, institutional human judgment and insights, leadership teams can harness the best of both worlds. In the age of AI, the ‘golden word’ should be a balanced blend of AI machine precision and human insight and intuition.
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