Generative AI is changing the paradigm of work and business… but is it for BETTER or for WORSE? Find out here!

Tuesday: Return Driven Strategy FROM THE DESK OF MILES EVERSON: Lots of changes are happening in the business world nowadays. From new technology to the workforce, many firms are looking for ways to effectively keep up with the restructuring in the work landscape. Every Tuesday, we talk about breakthrough technologies, the future of work, and other ways for companies to thrive in this era through the lens of Return Driven Strategy (RDS). As someone who’s been in the business and consulting industry for over 3 decades now, I believe these topics are essential in building and leading an outstanding organization. For today, let’s focus on generative AI. Continue reading to know how such technology impacts the world of work and how organizations can prepare for this new tool. CEO, MBO Partners Chairman of the Advisory Board, The I Institute

Generative AI is changing the paradigm of work and business… but is it for BETTER or for WORSE? ChatGPT. Hila. MidJourney. Here’s the thing: Findings from Baker McKenzie’s 2022 North America AI survey indicate that business leaders currently underappreciate AI-related risks to their organization. In fact, only 4% of C-suite level respondents said they consider the risks associated with using AI to be “significant,” and less than half said they have AI expertise at the board level. These statistics emphasize a major concern: Many enterprises are underprepared for AI, lacking the proper oversight and expertise from key decision-makers to manage risk. If these remain unaddressed, organizational blind spots around the technology’s deployment will likely overshadow transformative opportunities, causing organizations to lose pace with the explosive growth of AI. How Generative AI is Changing the Business Landscape There are some arguments that these days, AI-related progress and adoption are happening at an exponential rate. While this growth has renewed focus on the use of AI, academics, policy-makers, legal professionals, and others are campaigning for the ethical and legal deployment of this technology, particularly in the workplace. According to the World Economic Forum’s (WEF) survey, 75% of companies already use AI tools and technology for hiring and HR purposes. In this new phase of generative AI, core tenets such as governance, accountability, and transparency are more important than ever. For example: Unchecked algorithms can result in biased and discriminatory outcomes. Data privacy and breaches are another concern, easily occurring through the non-anonymization and collection of employee data. That’s why nowadays, governments and regulators are scrambling to implement AI-related legislation and regulatory enforcement mechanisms. In the U.S., a key focus of emerging legislation will be on the use case of AI in hiring and HR-related operations. This means as employers look to equip their workforces with generative AI tools, they have to ensure they aren't putting sensitive data and trade secrets at risk. Sure, AI is positioned to be of great help in the future of work, but poor implementation of it could even perpetuate existing workplace concerns rather than help solve those. So, what can organizations do to enhance their AI preparedness? To stay on top of this change, firms need to move current approaches beyond siloed efforts and bring together discrete functions under a strong governance framework. For instance: While many organizations rely on data scientists to spearhead AI initiatives, all relevant stakeholders, including legal, the C-suite, boards, privacy, compliance, and HR need to be involved throughout the entire decision-making process. Currently, only 54% of WEF's survey respondents said their organization involves HR in the decision-making process for AI tools. Meanwhile, only 36% of respondents said they have a Chief AI Officer (CAIO) in place. In such a high-risk environment, the CAIO will play a critical role in ensuring relevant governance and oversight are in place at the C-suite level and involve HR in training and fostering a cross-functional team. What’s more? Companies that deploy AI must also ensure there are processes in place that provide a clear understanding of the data sets being used, algorithmic functionality, and technological limitations. According to WEF, future AI-related legislation will likely include reporting such requirements. The Use of AI As Seen Through the Lens of Return Driven Strategy (RDS) There’s no doubt that AI is a great tool that will help both individual professionals and organizations get more work done effectively and efficiently. However, to truly achieve wealth by adopting this technology, management teams must be careful in enabling the use of AI tools in their firms. They must first define their goals as to why they’re using AI, then implement the necessary steps from there while also ensuring ethical standards aren’t breached. Besides, according to Professor Joel Litman and Dr. Mark L. Frigo in the book, “Driven”: “In order to create wealth, one must not destroy it. A mountain of financial evidence shows that gross unethical conduct is a business risk that does not bear a justifying reward.” If management wants to generate more revenue in the business through using AI, then they must not destroy the very purpose of why they’re adopting such a technology by using it unethically. The definition and pursuit of wealth and use of AI must fall within the ethical parameters of the communities in which the business operates. Failure to do so will risk everything the management team has and hope to achieve in the long run. — Overall, AI is being widely and quickly adopted by various businesses and individuals. However, it is being rolled out and developed soooooo rapidly that strategic oversight becomes even more critical. Fortunately, by establishing strong governance structures, organizations can withstand these technological changes no matter where they are in their journeys. With a secure framework in place, organizations can enable themselves to deploy AI technology and harness its benefits more confidently. If you’re looking to gain a better understanding of Return Driven Strategy and Career Driven Strategy, we highly recommend checking out “Driven” by Professor Litman and Dr. Frigo. Click here to get your copy and learn how this framework can help you in your business strategies and ultimately, in ethically maximizing wealth for your firm. Hope you found this week’s insights interesting and helpful.     The balance of power in the world of work has been shifting. Learn more about how top independent talents choose their preferred clients in next week’s article!