Artificial Intelligence is Coming. Here are 5 Ways to Win when it Arrives
The rise of artificial intelligence (AI) is the great story of our time. Decades in the making, AI-infused machines will soon change our lives and work in ways that are easy to imagine but hard to predict. Consider:
• Stock trading: In 2015, six of the top eight hedge funds in the US earned around $8 billion based largely — or exclusively — on AI algorithms. “The machine” has already won in stock picking.
• Healthcare: AI is quickly surpassing the capabilities of human radiologists. At Houston Methodist Hospital, AI software interprets results of breast x-rays 30 times faster than doctors do and with 99% accuracy.
• Law: AI-enhanced computer systems are conducting discovery and due diligence far better, faster and cheaper than the most talented paralegals. Soon, relying only on humans for discovery might become grounds for malpractice.
For many people, the encroachment of AI into the human sphere – and the rise of the new machine fueled by AI, algorithms, bots and big data – raises a discomfiting question: if machines can do everything, then how are humans going to make a living?
This question has been going through my mind, and those of my colleagues, for a while and this is why we’ve worked to define how technology will shape the opportunities and threats we face, and to foresee how man and machine will relate and coexist.
Man and machine
The bottom line: it’s going to be all right. Will the new machines displace many current workers? Yes, but, on a larger scale, new machines will also create work that is better, more productive and more satisfying than ever before. They will raise living standards and usher in a period of widely distributed economic growth.
But there’s a catch. Businesses must embrace two truths: firstly, machines will do more of the work humans perform today; and secondly, it’s never been more important to embrace your human-ness.
In short, the changes you make now are critical to preparing for the next era.
Based on our work with Global 2000 companies, we’ve developed a structured approach for moving forward, which we call the AHEAD model. The model is essentially a playbook that outlines five specific approaches for winning with AI, each with its own set of approaches and tactics.
It’s a once-in-a-generation opportunity: organizations that deploy intelligent process automation can completely change their cost structures and significantly increase the velocity and quality of their operations. It’s the only way to compete at the “Amazon cost” and the “Google speed” required by the digital age.
To force yourself and your team to reimagine how work can be done, apply the 25%-25% rule: set expected cost reductions at 25%, and an associated productivity increase of 25%. It will quickly become clear that traditional approaches are not good enough and that only AI-driven digital automation will deliver expected results.
Every industrial revolution was stimulated by a raw material: coal, steel, oil, electricity. Today, it’s data. Businesses need to understand how to take this commodity – available to each and every one of us – and turn it into a competitive advantage.
The race is on to instrument products and people and leverage the data they generate (what we call Code Halos), and then use the resulting insights to create new customer experiences and business models. By doing so, you can become a “know-it-all” business – one that uses sensors and instrumentation to know everything about everything.
General Electric and Nike are great examples of companies changing the rules of the game in their industries by instrumenting their products, surrounding them with halos of data and creating new value propositions and customer intimacy.
We believe the best way to understand our future is to see smart machines not as competitors for our jobs, but as companions that increase our job productivity and satisfaction. Think of how a GPS currently enhances your driving. In the coming years, entire vocations, from sales to nursing and teaching, will be enhanced by the new machines. The vast majority of us will choose to work with the enhanced human – the one equipped with a sophisticated system of intelligence at their side.
When the computer does what it does well, it allows us to focus more on what we do well. In an enhanced world of more pervasive technology, uniquely human activities, like empathy, building relationships and making sense of complex situations, will become even more important.
The economic idea of abundance is actually quite old: the loom led to abundance in clothing; the steam engine to abundance in transoceanic travel; and the assembly line to an abundance of appliances and automobiles for consumers around the world. These products went from rare luxuries to democratized and ubiquitous.
With the new machines, we will soon experience a new wave of abundance, in areas such as financial services, insurance, healthcare, entertainment and education. As the new machine drives price points down, markets of abundance will be established and sales increased to unimagined levels. Will your organization seize advantage with the new abundance or fall victim to it?
While machines will do more of our current work, the process of innovation will allow us to discover entirely new things that will ultimately become the core of what we humans do in the future. When the lawnmower was invented in 1827, for example, who knew it would lead to the global sports industry, now worth $620 billion annually? Systems of intelligence are now creating the foundation on which new industries and new jobs will be built.
We’re already seeing digital leaders place discovery bets on their lawnmowers — think Mark Zuckerberg and the Oculus VR purchase or bank trials of blockchain. Your job is to imagine the new forms of value you can create with the new machine.
Whether you’re managing a large enterprise or just starting your first job, deciding what to do about the new machine — this new cocktail of AI, algorithms, bots and big data — will be the single biggest determinant of your future success. Similar to the world’s previous industrial revolutions, this one will steamroll those who wait and watch; and unleash enormous prospects and prosperity for those who learn to harness the new machine.