In a survey of all 500 of the Fortune 500 CEOs last year, 71 percent agreed with the proposition that their companies are now technology companies, while 81 agreed that AI is “extremely important” or “very important” to their companies’ futures, up sharply from 54 percent the previous year. Artificial intelligence clearly is not just some short-lived fad. Not only has it gone fully mainstream, it’s increasingly considered essential to business success.
Extremely important it may be, but fraught with danger. Serial entrepreneur Ben Lamm is, among other things, CEO of Hypergiant, which consults with Fortune 500 companies on AI matters and develops new AI tools, and he warns that artificial intelligence is often badly understood and presents a major opportunity for expensive mistakes. Companies are hurting themselves by embracing an uncritical admiration of AI while at the same time failing to exploit its possibilities. A lack of understanding is the problem all around.
AI isn’t a panacea.
AI is commonly said to be transforming business, but that hasn’t really happened yet. Too many companies try to graft AI onto what they’re already doing instead of building entirely new methodologies and strategies around it. AI is no substitute for the human intelligence that deploys it, and the wrong mindset about it keeps many businesses from exploiting it fully, while causing others actually to be counterproductive with it. Too many companies view AI as a magic wand instead of being very specific about what particular problems it can solve--or not--for them. The result is waste and needless disruption.
“For all its glamour, AI is no different from any other technology, in that it should have a well-defined purpose in pursuit of a specific goal.” As Lamm said in a column for VentureBeat. “If you go in knowing you want AI, but not knowing why you want it, you will fail AI, and AI will fail you.”
Start small.
Too many companies acquire too many AI tools and try to make them do too much too soon, without proper attention to actual business value. Again, the human element behind the use of AI is key: Your team needs time to assimilate experience with AI and take action on the basis of that experience. It's a good idea to start with a narrow use of the technology and keep the functionality limited at first, sticking to essentials and then expanding as you learn.
A big rollout can be a bad idea. The new technology could be unsuccessful, at least until a company learns to use it well. The narrower its initial use, the fewer the aspects of the business adversely affected.
Although companies that embrace AI often expect sweeping, transformative change right off the bat, it’s best not to underestimate the enormous impact achievable through incremental change. Even a 1-percent cost reduction or sales uptick can be a significant boost for a company of Fortune 500 dimensions and is something to build on as you nurture your AI expertise.
Don’t let the techies take you in.
Business is still business. That goes for the IT industry, which wants to sell you something even if it’s not quite what you need. The creativity, the genius, of the tech industry is a wonderful thing, but sometimes the excitement around it results in unrealistic expectations of a paradigm shift when a new technology appears. Software might make a change in how you carry out some of the functions of your business, but it doesn't change the fundamentals of that business.
Therefore CEOs and other decision-makers shouldn’t allow themselves to be overly influenced by research scientists and tech gurus. As Lamm said in an article for Entrepreneur, "AI reaches too far into a business and touches too many processes for any sane executive to let technology companies tell them how to run their business.” Business should still be run by business people--especially business people who are good at listening to their customers.
AI can make the connected consumer feel emotionally connected.
Somewhat paradoxically, AI can restore a more personal feel to customer service. Today’s conversational AI permits a circular relationship between business and customer, answering questions, making suggestions, and following up in real time. With AI, you can establish the back-and-forth of a relationship instead of merely engaging in an old-fashioned linear transaction. AI can help companies and customers capture some of the flavor of the brick-and-mortar business.
Today’s perpetually connected consumer is likely not just to hope for but to demand the conversation experience instead of telephoning or emailing and playing tag with customer service representatives.
AI can be the gift that keeps on giving.
One critical area in which companies fail to exploit their AI is in ignoring or under-utilizing its capacity for gathering information about customers during its interactions with them. At this point, too many businesses have used data gathered during customer interactions to do little more than improve conversational performance, ignoring a gold mine of real-time market research derived from those interactions. The most fruitful exploitation of AI lies in its “network effect,” according to which a platform becomes smarter as it gathers more data. The effect is similar to compound interest.
In a rapidly changing world, the word “inevitable” is one we should use with caution, but if anything looks inevitable at this point, it’s the continued mushrooming of AI as customers not only expect but insist on its benefits. As with any other technology, however, CEOs should be sure there’s a carefully conceived money-making rationale behind the acquisition of the new tools--and that the human brains operating those tools are prepared to embrace the full implications and capacities of developments that can truly be transformative if properly understood.
