2sore ‘ALDriven Leadership | Thomas H. Davenport and Janet Foutty MITSloan Management Review WHAT'S HOP > can We Really Test People fr Potential? New. Strategie Measurement for High Per mance Sports Analyties Pode coLUMN Al-Driven Leadership ‘Thomas H. Davenport and Janet Foutty + ‘August 10,2018 + Reading Tine: 7 min Many companies are experimenting with AI on a small scale, and a few have made a commitment that their organizations will be “Al first” or x “Al-driven.” But what does this mean? What is A doing or leading, and, (Mma MUMS LeU Tos in particular, what is the role of leadership in making organizations Al- PLR Aral driven? START HERE) Subscribe today for unlimited access to MIT SMR hips:lsloanreview.mitedulartcleai-eriven leadership 182sore ‘ALDriven Leadership | Thomas H. Davenport and Janet Foutty ‘We see a lot of confusion around opportunity and action. In the 2018 Deloitte Global Human Capital ‘Trends survey and report (https://www2.deloitte.com /insights/us/en/multimedia/infographics/2018-global-human- capital trends fitinf ‘ot business and AR leaders, 72% indicated that Al, rObots, and autothation are important — but only 31% felt their organizations were prepared to address strategy to implement these technologies. ‘There aren't that many Al-driven companies yet, and while we have seen a few examples outside of tech, most of the ones that do exist are technology companies. That makes it a little speculative to define the traits leaders need to help move their organizations to an Al-first future. Still, it's useful to begin to develop a framework for what we already know about what it takes to be an Al-driven leader. The Seven Attributes of AI-Driven Leaders Some of the necessary traits to become Al-driving leaders are simply logical. We also have surveys to draw from of organizations that are active in the AI field. Parsing this material, we have identified seven attributes of leaders at the AI forefront: ‘They learn the technologies. It helps a lot in leading with AI to know what AI is and does. Yes, this sounds obvious, but by tradition, leaders outside of IT fields have rarely felt the need to understand technologies beyond the surface level. AT is different. It is not just one technology, but many — cach with its own application types, stage of development, strengths, and limitations. Some, like robotic process automation, are relatively easy to implement — even for non-IT people — and provide rapid ROL. Others, like deep-learning neural networks, are much more complex and cutting-edge, requiring high levels of expertise. Al-driven organizations typically want to explore a wide variety of technologies, and leaders need to know enough about them to be able to weigh in on which ones will be most critical to their organization's success. EMAIL UPDATES ON Al, DATA & MACHINE LEARNING (Get monthly email updates on how arta intelligence and big date are afeting the development land execution of strategy in organizations sion uP nny They establish clear business objectives. As with any other technology, it's important to have clear objectives for using Al. Is there a service that could be easier for customers to use? Are there particular business processt employing data in the way they should2.Al.canaddesisanssolthesa igaues, but probably not all at once, so leaders need to make some choices. The 2017 Relaitie,Statkag Cognitive survey s in which knowledge isn’t effectively distributed? Are some types of decisions not niteslsloanceview.mitedulatilelal-stvenJeadershiph 262sore ‘ALDriven Leadership | Thomas H. Davenport and Janet Foutty Chttps://www2.deloitte.com/us/en/pages/deloitte-analytics/articles/cognitive-technology- adoption-survey-html) of U.S. executives with a high level of Al awareness and operating within the companies that are most aggressively adopting AI and cognitive technologies found that the most popular objectives Rivolved using Al to improve Seisting prodicls aha services, make better decisions, create new products, and optimize business processes. Of course, there are choices that need to be made deeper within each of those categories. These deci ions are appropriate for senior managers to own and make ‘They set an appropriate level of ambition. Some organizations have difficulties in pulling off highly ambitious goals, and “moon shots,” not surprisingly, don't always reach the moon — and may set back Al Machines\learn. initiatives overall if they fail. The alternative is to undertake a series of el oen less ambitious projects — often called the low-hanging fruit. Even at eae Amazon, one of the most technologically sophisticated organizations in ae the world, CEO Jeff Bezos noted in his 2017 letter to Amazon, shareholders (https://www.enbe.com/2017/04/12/amazon-jeff- bezos-2017-shareholder-letter.html) that while the company is undertaking some highly ambitious projects like intelligent drones, the bulk of its machine learning efforts are devoted to “quietly but, ‘meaningfully improving core operations.” While less transformational individually, a series of such projects can add up to major change in a product or process. We generally feel that most companies will be better off with a series of less ambitious AI projects, although there may be some circumstances in which a large-scale goal is warranted. ron They look beyond pilots and proofs of concept. Our research suggests that AI projects thus far are heavily weighted toward pilots. But to improve productivity and achieve the needed ROI, leaders need to push their companies to scale up these projects to full produetion status. This means identifying process improvements before applying technology and figuring out how to integrate AI technologies with existing applications and IT architectures. These are not easy skills. AT driven leaders must help to assess the potential for full-scale implementation before embarking upon pilot projects. They prepare people for the journey. Most AI projects will involve “augmentation” ‘working in collaboration with smart machines — rather than large-scale automation, That means that employees will have to learn new skills and adopt new roles (https://sloanreview.mit.edu/article/the-fundamental-flaw-in-ai-implementation/), which ‘won't happen overnight. Good leaders are already preparing their people for AI by developing training programs, recruiting for new skills when necessary, and integrating continuous learning into their models — and in fact, the 2018 Digital Business report by Deloitte and MIT Sloan Management Review (https://sloanreview.mit.edu/pepicg!s/coming-of anecdigitally |) shows that businesses are putting an increased focus on continuous learning. Bapk of America’s Technology and Operations function smart people niteslsloanceview.mitedulatilelal-stvenJeadershiph 36