For all the promise about artificial intelligence (AI) giving business new competitive advantage and transforming entire industries, it may surprise you that less than 10 percent of companies are currently using it.
While we expect that number to leap to 85 percent by 2020, that surge comes with serious risks unless CEOs approach artificial intelligence as a strategic imperative. To ensure companies achieve the full potential of AI – and to mitigate its potential risks – CEOs cannot relegate AI strategy to IT departments. Unfortunately, this happens much too often.
A recent EY poll of business leaders found only 21 percent of respondents’ organizations making progress in securing C-suite support for AI. More than one in four respondents said their organizations do not regard AI as a strategic, overall priority.
So why does AI require C-suite ownership? And what must CEOs understand to create effective AI strategies?
Let’s start with an inescapable truth: artificial intelligence has implications far beyond technology. In fact, 75 percent of AI decisions having nothing to do with technology, impacting business processes, talent development, the customer experience, corporate governance, and ultimately leading to new business opportunities – all CEO concerns to be sure.
Assessing Your Company’s ‘AI Maturity’
With artificial intelligence having this broad impact, implementing new AI systems requires a deep assessment of the organization’s “AI maturity,” an honest look at the readiness it brings to AI from four perspectives:
- Strategy: does the organization have a bold, long-term strategic orientation and a vision for AI tied to business strategy and centered around customer needs?
- Culture: what is the appetite for risk and is the culture tuned for the speed and agility needed to continuously test and evolve AI systems?
- Organization: does the leadership and talent exist to support a long-term AI strategy, with roles and responsibilities to ensure ongoing alignment and accountability, including in thorny areas such as corporate governance?
- Capabilities: how mature are existing skills related to connectivity, content, customer experience and data-driven decision-making?
Understanding an enterprise’s AI maturity is the difference between a company that aims too high with AI and fails, versus a company that finds the best entry point to start with AI and expand from there. Too many enterprise AI projects have failed due to a lack of AI maturity – resulting in mishandled data, siloed intelligence, and limited value.
“An AI strategy must reflect the enterprise’s maturity level, including knowing where to start and where to set goals and milestones.”
An organization that recognizes and grows its AI maturity is on a path toward operating with sound AI fundamentals, including understanding the difference between data and knowledge, connecting that knowledge across the enterprise, and using it to empower employees to make faster and smarter decisions.
Achieving these benefits, however, is a journey that starts at different places for different organizations. An AI strategy must reflect the enterprise’s maturity level, including knowing where to start and where to set goals and milestones.
Where to Start
CEOs must first identify the right business opportunity for AI – enhancing customer service, improving productivity, reducing manufacturing defects, or something entirely unique. AI scenarios are business- and industry-specific, but generally fit three categories:
- Systems of intelligence – digital agents ranging from simple bots to systems for customer care, all built on conversational AI. Organizations with lower AI maturity can implement chat bots to deliver better services and raise their AI maturity without hiring data scientists.
- Patterns of object definition and detection – using AI image recognition, for example, to spot defects on production lines and transform manufacturing processes, or to provide spatial occupancy intelligence for retailers to understand how shoppers move through a store.
- AI-assisted professionals – using machine reading and comprehension, for example, to help legal, HR or other workers keep up with growing volumes of information, with AI systems smart enough to flag potential issues in documents so the professionals can focus their attention, address risks, and get more done.
Each of these scenarios are designed to augment human capabilities, making employees more productive through AI that is easy, accessible and understandable.
With these types of AI scenarios, the C-suite can set strategies and decide on key investments for broader AI-based transformation, including creating new data and knowledge ecosystems needed to fuel AI, and training employees to make decisions in entirely new ways, informed not only by raw data, but by information with probabilities attached to it by AI systems.
What Do You Believe?
Underlying all of this is a more significant question CEOs must answer: What do you believe about AI?
The most important responsibility CEOs have in setting an AI strategy is aligning their business leaders on a set of beliefs about how it will be developed and managed.
Leaders must discuss how AI systems might inadvertently infringe on personal freedoms of customers or employees, such as through denials of service. In healthcare, for example, the C-suite must examine whether AI helping with diagnoses could result in some patients getting denied certain treatments.
CEOs must ensure their position relative to how AI will be used is clearly communicated, set appropriate parameters, and continuously review the system’s purpose, the capabilities of those developing, managing and using it, and the reliability of the system and the human decisions it influences.
An effective AI strategy must address tough ethical questions and align on a core set of principles the organization will follow. CEOs should create their ‘AI manifesto’ that delineates the organization’s position on issues of trust, fairness, transparency, privacy, safety, inclusiveness and more.
While there have been previous technology revolutions, AI can be the most transformative technology we’ve ever experienced. The stakes are high, and there is opportunity to improve business in ways we might not fully understand.
But that is all the more reason for AI to become a strategic imperative for the CEO to understand and own. Not having an AI strategy is a risk no CEO can afford to take.