AI and the boardroom

Think:Act Magazine "It’s time to rethink AI"
AI and the boardroom

May 15, 2024

Why AI needs a seat at the table in business

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by Steffan Heuer
Artworks byCarsten Gueth

Artificial intelligence is speeding up a cultural evolution. Embracing AI tools is the latest wave of organizational change, calling for leaders who are curious, fast learners. 

When economists Andrew McAfee and Erik Brynjolfsson published the bestselling book The Second Machine Age in 2014, they made a bold prediction: "Computers and other digital advances are doing for mental power … what the steam engine and its descendants did for muscle power. They're allowing to blow past previous limitations and taking us into new territory."

Andrew McAfee, Professor, MIT Sloan School of Management.
Andrew McAfee, Professor, MIT Sloan School of Management.

And new territory it is indeed. Companies of all sizes are dipping their toes into GenAI applications to help them find new materials and drugs targets, optimize manufacturing processes, analyze investment opportunities and create content ranging from new code to marketing campaigns to video clips – all tasks that used to take many hours of human labor. International Data Corporation (IDC) expects the worldwide market for AI software to grow from $64 billion in 2022 to nearly $251 billion in 2027 at a compound annual growth rate of about 31%. GenAI platforms and applications will add another $28.3 billion. The economic impact of having increasingly sophisticated programs take over complex human tasks is likely to be in the trillions.

"The task for the decade ahead is to get a clearer view of where GenAI can have an impact. It's a uniquely difficult flavor of organizational change."

Andrew McAfee

MIT Sloan School of Management

So, what is a CEO to do facing this barrage of new tools that promise unprecedented capabilities to augment or even supplant our mental powers, yet are at the bleeding and therefore highly risky edge of technology, potentially upending their ways of devising strategies and leading an organization?

If you listen to Andrew McAfee, the wild ride has just begun. In order to come out a winner, CEOs should focus less on the bells and whistles of AI tools, he argues, and more on honing the organizational culture in which they will be deployed. "At the CEO level, the task for the decade ahead is to get a clearer view of where GenAI and the rest of the technological toolkit can have an impact in the organization and then start trying to achieve that impact. It's a uniquely difficult flavor of organizational change," the professor at MIT's Sloan School of Management says in an interview. "It's a flavor that needs to be led by the top, instead of letting it purely percolate up from below."

As a guide through this new era, McAfee has penned a new book entitled The Geek Way: The Radical Mindset that Drives Extraordinary Results. To him, AI is but one facet of digital transformation that requires "a whole new way to run a company." The change agents are not software packages, but curious minds who are not afraid to move fast and try out new things even if they don't know what will work.

By his definition, geeks are not just software programmers but all those who share two traits. "They get obsessed with a very hard, very important problem and cannot let it go. Two, they are willing to embrace unconventional solutions and are willing to give autonomy to an uncomfortable degree." The "geek way," to McAfee, is about "the power of taking a very fast-cadence, iterative, agile development approach for doing everything from writing software to building cars to launching rockets and satellites. The power of the agile approach is very widely generalizable."

Yet he recognizes that this way of thinking might bump into ingrained notions and long-established practices. "It is very strange and unfamiliar to companies that grew up in a more planning-heavy era. And it seems like a dumb idea to just start building stuff that is not very good and is not going to work very well. That seems like a chaotic, risky approach, but I think it is better in the great majority of situations."

The linchpin of doing things differently while AI proliferates is to accelerate the cultural evolution of a company, or boosting the way we learn and innovate. McAfee defines it as a set of cultural practices that "favors iteration over planning, shuns coordination and tolerates some chaos." It is not rocket science, though. "I don't think CEOs need to get computer science PhDs at all," the academic says. Rather, executives should do away with a lot of hierarchy and structure and empower others to explore and embrace digital tools. Tools that free up their time and the time of managers below them to focus on what humans do best: collaboratively evolving more quickly.

Andrew McAfee

Andrew McAfee is a principal research scientist at the MIT Sloan School of Management and the co-director of the MIT Initiative on the Digital Economy. The former Harvard professor has authored several books, including The Second Machine Age and Machine, Platform, Crowd: Harnessing Our Digital Future.

Contrary to some gloomy predictions, GenAI will not replace leaders, McAfee argues. "CEOs engage in coaching, leading, communicating and motivating a team to accomplish big things – that work will be assisted by AI and lots of other tools." Yet even middle managers need not worry about being automated away. "The role of the leader or manager becomes even more important. Organizations are incredibly complicated places, and AI is not going to handle all of that complexity for us."

McAfee has seen a lot of executives at the helm of tech companies that think and work this way and stresses that "geeks" aren't necessarily young revolutionaries. "My test case is Microsoft. It's been around for close to half a century, and for the first decade or so of the 21st century it stopped being at the forefront of any kind of innovation that we care about," he elaborates. "It had become a massive, sclerotic bureaucracy and the person that turned it around and unlocked huge amounts of value was Satya Nadella. He was a career employee and not a kid anymore when he took over as CEO. He has shown that it's possible to take a very large entrenched organization and accelerate its cultural evolution and make it significantly more agile and innovative."

Resistance is a corollary of each great transformation: humans at all levels digging in their heels when what they've become used to is shaken up or blown to bits. It is a natural human response, McAfee says, that can be channeled into something good as AI sweeps over the world. "Whenever there's a type of organizational change – whether it involves technology or not – people will assess with some level of accuracy whether this change will make them less relevant and more marginal in the organization. That's not solely because of technology. Even though this technology is very young, it's clear that is a big deal. In my conversations with CEOs and business leaders, they are eager to adopt this, but they realize that fully incorporating this technology and related technologies is going to be difficult." A crucial part of grooming – and then unleashing – the geeky maverick inside every leader, then, is to listen to and bring the workforce along into this new era.

The Al impact on the boardroom, the workplace, society and you. Please click below to read the other parts of the cover story:
About the author
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Steffan Heuer has been covering the intersection of technology, commerce and culture in Silicon Valley for more than two decades. His work has appeared in The Economist, the MIT Technology Review and the German business monthly brand eins. He currently divides his time and reporting between Berlin and California.
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