Artificial Intelligence (AI) has been described as a Promethean Moment. What is meant by this is that it is one of the times in humankind’s history when everything changes due to a new tool being discovered. It may not be an exaggeration to compare the potential impact of AI to other monumental discoveries that changed how we live, like fire or perhaps the wheel.
It is still relatively early days, and for many, AI is simply customer service Chatbots, and self-driving car features. Or ChatGPT and the endlessly entertaining opportunity to ask all types of random questions, much as we did when Alexa showed up some years ago.
But for business leaders, AI is an unstoppable game-changer. It is the ability to improve productivity and performance, discover new products and services, and improve business results in many unanticipated ways. “McKinsey recently reported that “Generative AI’s impact on productivity could add trillions of dollars in value to the global economy.” McKinsey’s 2023 “research estimates that generative AI could add the equivalent of $2.6 trillion to $4.4 trillion annually across the 63 use cases we analyzed—by comparison, the United Kingdom’s entire GDP in 2021 was $3.1 trillion.”1 Truly staggering!
The potential of AI and its impact is increasing daily and exponentially. Companies of all shapes, sizes, and stages have an opportunity to take advantage of the revolution or risk getting left behind. The Board of Directors, as the ultimate governing body of the organization, must be focused on this now. Here are four ways to begin:
Understanding AI
As the old Chinese proverb states, “A journey of a thousand miles begins with a single step.” And, of course, to leverage the momentousness of AI, we must first understand it. This does not necessarily mean full-blown technical expertise in the boardroom – although this can help in certain circumstances. Instead, it means that everyone on your board should have a firm grasp of what AI is, the different types of AI, and a sense of what AI is changing in your particular industry or amongst your clients and suppliers. Additionally, this should not be left to chance, individual dabbling, or casual reading on the topic. The board should put AI knowledge and education on its agenda.
Strategy
Once understood, your board must establish how AI fits into or even alters your company’s strategy. How will AI create value for your organization? What can be harnessed immediately, and what should the company plan for in the short and medium term? Is AI simply a productivity tool, or will it be integrated into the company’s products and/or services? Part of the strategy discussion should include organizational responsibility and structure. Where does the AI innovation and capability lie within your company? Who is ultimately responsible for ensuring your organization is cutting edge on new developments and potential?
Risks
There is endless speculation about the dangers of AI. With its colossal capabilities comes some risk. According to the Center for AI Safety, a San-Francisco-based non-profit whose mission is to reduce societal-scale risks from artificial intelligence “Like any other powerful technology, AI also carries inherent risks, including some which are potentially catastrophic.”2 Stanford University reports: “One of the most pressing dangers of AI is techno-solutionism, the view that AI can be seen as a panacea when it is merely a tool.”3 The point is that boards must be realistic, practical, and cautious when it comes to AI. Proceed with caution, but proceed!
Human Capital Implications
As we barrel into the world of artificial intelligence, we need to be concerned with good old human intelligence. Our employees may be concerned about how all these technological advancements will affect them. Will they be replaced by a robot or a super-smart computer? Will they need to up-skill, reskill, or retreat?
From a leadership point of view, sometimes those at the cutting edge of this domain may be more junior and much younger than company leadership and the board of directors. Will the most senior executives and Directors be able to take direction and learn from those whom they may perceive as still wet behind the ears? Your board should be aware of these challenges; in some cases, an overall directive would be appropriate.
The benefits and possibilities of artificial intelligence are changing daily. The tools and opportunities are limitless. Board Directors must stay ahead of the curve to guide their organizations forward aptly. The task is monumental, but a well-constructed and motivated board is more than up for the challenge.
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