Everyone is talking about artificial intelligence. It has leapt into the consciousnesses of many, including CEOs and today’s leaders. As it becomes a reality for many of us, there's been a focus on how to raise our workers' abilities to learn and improve. In the face of such a big change, how can we realize better outcomes, stronger growth, and the ability to compete for the best talent? The journey may begin by understanding the islands of disconnected data that exist within our companies.
With all the discussion about human and intelligent machines, I reached out to my friend and highly respected business owner, Gene Tange, CEO of PearlHPS. Gene’s company, based in the bay area, is a cloud-enabled predictive analytics firm shaking up how we predict the successes of teams. He helped me understand this arena and the technological and cultural accelerations occurring that will determine the winners and losers as we move forward.
Sherry Benjamins: What are CEOs talking about in the context of BI/AI?
Gene Tange: Business Intelligence is the use of data to derive insights. There are some misused terms in AI. In order to simplify it, think of AI as a way to do research and build a capability which uses tools to look at data. When it comes to thinking about AI, I’m meeting CEOs who are in three camps. The first, which makes up about 70%, are listening and engaged in learning. There’s a 20% camp that's doing something about it; building an AI team, applying tools and looking at ways to strengthen business outcomes. And then the last camp, which makes up around 10% or less, are companies like Netflix or LinkedIn that are already transforming how their companies work. They're determining how to derive value to the business. This means improving revenue, net income or reducing cost.
SB: What attracts C levels to use AI/BI? What are the applications?
GT: A joint venture between Avanade, Accenture & Microsoft produced a study of 500 business leaders looking at smart technologies that will deliver ROI and game changing solutions. They talked about doing business in this competitive environment in three areas of impact: sales revenue, financials, and business execution. This last category is where the people and human impact applications are studied.
CEOs know that most acquisitions don’t get the results they set out to achieve. Building human expertise inside their organizations is critical and the stakes are high to get this right. Five years ago we would have looked to the single individual leader to get the “execution plan” right. Today it is all about a cross-functional team and their performance.
SB: How will CEOs prepare their organization for this new intelligent technology machine age?
This is a massive challenge and demand is exceeding supply. Right now, there are over 10,000 openings in the US for Data Scientists yet we don’t yet have the capability to fill those needs. Our client, the CEO will look at where the biggest impact can be in his/her organization so that there is a prioritization of need. They will experiment with solutions that tackle a specific issue. Is there a tool that might advance a product release into a competitive market or accelerate an acquisition’s track record? It is easier to start in one segment and expand to other areas once there is success. A good example of one early introduction is the launch of Amazon Go's pilot store early this year in Seattle. It is the first semi automated retail store. No checkers or lines! You take the product off the shelf and walk out and the application automatically charges your account. It also tracks inventory, buying habits and a host of other bits of information to make your buying experience better.
SB: How will HR move forward in this arena?
GT: The HR function is not moving as fast here as other functions. They have historically focused on tactical initiatives in Total Rewards, Talent Acquisition and Development. The cross-over to a business outcome with measurement on the impact to the bottom line will shift them from tactic to strategy. Teams are the source of most complex business outcomes. This seems obvious but it is a critical revelation. Data that provides insight into team performance in a predictive manner will change the conversation and credibility of HR. I see more CEOs looking at resource allocation and making sure that HR is focused on the core drivers of business.
Just a few years ago, who would have thought that data initiatives would have created platforms with tools that can talk to you or predict the operational success of a team launching a new product? Imagine the culture change in companies that are implementing these predictive execution tools that Gene has developed in his company. The good news is that this work will elevate our role and add value to the business if we boldly go into this future. Do you have an analytics function? Lead the way in this effort and reimagine your work. Ask the tough questions about your company’s readiness to compete and join the winners in this landscape.