Where we are with artificial intelligence today reminds me of where we were with the internet twenty-five years ago.
In 1995, the internet was in its infancy. While 90% of Americans use the internet today, back in 1995, only 14% of the U.S. population was on the internet. 1995 was also the year when Bill Gates, the Microsoft co-founder and world’s richest person, met with David Letterman to talk about Microsoft’s new offering, the Internet Explorer.
Like many, Letterman wasn’t too familiar with the internet and was questioning its purpose and usefulness. Gates told Letterman, “you can find other people who have the same usual interests you do, by searching the web.” During the televised segment, Gates tried to convince Letterman of the usefulness of the internet, but Letterman wasn’t sold. For the uninitiated non-technical people, it was tough to envision how the internet would evolve and how disruptive it would become.
“If I went back now 20 years and told you that all of the world’s information – second-by-second stock quotes, a constantly revised encyclopedia, 24‑hour news – would be available to you for free, at all times, in your pocket, you would have dragged me off the stage as a lunatic,” said Kevin Kelly, a former editor of the Wired Magazine, author and a digital prophet, to the Guardian in an interview in 2010.
As a result, many executives underestimated the potential the internet represented only to experience the detrimental effects of not participating in a disruption such as the internet.
Artificial intelligence is no different. Most every executive has heard about it; some understand its potential on paper, but the majority don’t have a clear vision on where AI fits in their own organizations’ strategy other than the IT department.
It’s partly because Artificial intelligence is a relatively young scientific discipline. It’s highly technical. And although AI has already been integrated into many products, services, and companies that we all interact with daily, in most cases, AI is not visible.
When Amazon learns from your past purchases and searches to recommend new products, you don’t necessarily see the algorithms working in the background.
Similarly, when you use Waze or most other navigation applications, you’re not aware of the AI system that determines the best route, and then learns your driving patterns as you navigate from point A to point B.
Also, when you type into the Google search box, and Google tries to finish your sentence while you’re typing, you don’t think that this is an algorithm – one that’s getting better with every entry into the search box.
In all of these cases, artificial intelligence is hard at work, and it’s in the background. It makes decisions on what to show you based on who it thinks you are and what you like. It guides you from point A to B, and you trust and follow it. You may not realize this, but you have already outsourced many decisions to algorithms.
The McKinsey Global Institute expects that by 2030, seventy percent of companies might have adopted at least one type of AI technology. They also estimate that AI may deliver $13 trillion of additional economic activity by 2030. Considering that 2030 is just ten years away, you might expect that AI would be well adopted by most organizations. That is not the case.
A recent MIT Sloan Management Review and BCG research report revealed that among the 90% of companies that have made some investment in AI, fewer than 2 out of 5 report business gains from AI in the past three years. 40% of organizations that made significant investments in AI do not report business gains.
While some organizations view AI as a strategic business enabler and incorporate AI into their corporate strategy, the majority of companies are still piloting AI. While almost 93 percent expect to get some value from AI, only 35 percent have reported that they see value from recent AI investments.
The reality is that most companies have not yet figured out how to be successful with AI. As a result, most executives consider AI an untapped opportunity but also a growing risk factor. When Bill Gates tried to explain why the internet was revolutionary and why it’s a big deal for people to be able to find like-minded people on the internet, we weren’t aware of the potential that this might create yet.
A few years ago, Dana Lewis, a type-1 diabetes patient, and author of the book, Automated Insulin Delivery: How artificial pancreas “closed loop” systems can aid you in living with diabetes, relied on an insulin pump to lead a “normal life.” She wanted to make the alarm on her continuous glucose monitoring device (CGM) louder so she could wake up in case her blood glucose levels dropped while she was sleeping. This is critical for type 1 diabetes patients because low blood glucose levels may lead to hypoglycemia if not intervened.
When Dana started calling CGM manufacturers for help, she found out that making a change to an approved medical device might take half a decade or longer. Dana decided to take the matter into own her hands and started exploring what she could do on her own.
This simple quest led to a multi-year journey and the invention of a DIY “artificial pancreas.”
Dana didn’t have any medical expertise; she also wasn’t a hacker, or an AI engineer. Dana was a communication specialist who became frustrated with the speed of change in the healthcare ecosystem. So, she took the matter into her own hands, created the #WeAreNotWaiting movement, and along the way, became a biohacker.
She also started an open-source movement with people contributing to this idea through algorithms, personal data, creativity, and free time.
Together they built an artificial pancreas system that regulates a patient’s insulin intake using AI. #WeAreNotWaiting movement inspired many healthcare organizations, the FDA, and others to change their minds and policies around AI. That’s why you need an AI strategy.
Your customers are not waiting for you anymore.
Companies such as Google, Baidu, Uber, Tencent, Netflix, Stitchfix, Amazon, Microsoft, and Facebook have successfully scaled AI and learned to reap significant business benefits from it. Many people scratched their heads when Facebook paid $1 billion in 2012 to purchase Instagram, although it wasn’t generating any revenues. Today, Instagram is valued at more than $100 billion, and the company uses AI from picking content to show to stopping bullies, using AI to improve the user experience, and boost profits.
Making profits from AI is much more complicated than connecting some algorithms to your business. AI is powerful, but it’s not a silver bullet. In many cases, AI may not even be the right solution. It’s also not always stable; there are cases where an AI system has been fooled easily. Therefore, executives and leaders need to be able to separate what works from what doesn’t and not chase “shiny objects.” That’s why it’s critical to develop a robust AI strategy and ensure it’s aligned with your organization’s corporate strategy.
Moving an entire company to adopt AI is going to be one of the most challenging initiatives you will run. Embracing AI is more complicated than bringing in a new technology stack. It will change an organization’s fabric and mindset. It will necessitate working in new ways, trusting algorithms for making business decisions. Accepting an algorithm or robotic process as the latest member of a team is also not small change. Your entire “decision factory” will be supported and augmented by machines that thrive on data, master statistics, and don’t stop learning. You will use this capacity to create new products, improve your efficiencies, and delight your customers in ways that weren’t possible before.
“Much has been written about AI’s potential to reflect both the best and the worst of humanity. For example, we have seen AI providing conversation and comfort to the lonely; we have also seen AI engaging in racial discrimination. Yet the biggest harm that AI is likely to cause individuals in the short term is job displacement, as the amount of work we can automate with AI is vastly bigger than before. As leaders, it is incumbent on all of us to make sure we are building a world in which every individual has an opportunity to thrive” says Andrew Ng
It’s so important to start the AI journey today and do it the right way. The good news is that you aren’t the first company to go through this. Many organizations have transformed themselves and have adopted AI in robust ways. Consider Amazon or Netflix. The former was a used book sales platform, the latter shipped DVDs to make money. Today, both are AI-powered businesses.
Many ecosystem partners can help you make this transition. Some algorithms are readily available; some vendors bring experience with robotic processes. They can help you address the process automation side, and other specialist companies can help you with putting a data and technology infrastructure in place. Some start-ups may be working on offerings that may render yours irrelevant. It’s good to be working with them, but which ones? It’s easy to start pilots and end with false starts if you don’t have a strategy. That’s why your organization needs to develop a robust AI strategy that answers the following questions:
– What is the disruptive potential of AI for our industry and organization?
– What is our vision for AI in the context of our corporate strategy?
– How can AI help deliver our strategic goals?
– In which parts of our business will we integrate AI?
– What new capabilities do we need to be successful?
– How will we empower our workforce to adopt AI into their work?
– How will we measure success?
– What won’t we do with AI?
Strategy is about tradeoffs and making choices, that also applies to AI strategy. Having an answer to the final question is crucial because you can’t do everything all at once. You also shouldn’t try to become an AI-first business if it’s not needed. Perhaps you shouldn’t conduct certain activities with AI because of ethical, legal, security, or other considerations. So, what won’t you do with AI?
Contact us if you’d like to talk about how we might help you as you start developing an AI strategy. We are looking forward to working with you as you make those critical choices in where to play and how to win with AI.