CEOs: AI Is Not A Magic Wand

The technology holds great promise, no question—but deployment must be done strategically, and with the understanding that you likely won’t see gains on its first attempt to integrate.

If you achieve the improbable often enough, even the impossible stops feeling quite so out of reach.

Over the last several decades, artificial intelligence has permeated almost every American business sector. Its proponents position AI as the tech-savvy executive leader’s magic wand — a tool that can wave away inefficiency and spark new solutions in a pinch. Its apparent success has winched up our suspension of disbelief to ever-loftier heights; now, even if AI tools aren’t a perfect fix to a given challenge, we expect them to provide some significant benefit to our problem-solving efforts.

This false vision of AI’s capability as a one-size-fits-all tool is deeply problematic, but it’s not hard to see where the misunderstanding started. AI tools have accomplished a great deal across a shockingly wide variety of industries.

In pharma, AI helps researchers home in on new drugs solutions; in sustainable agriculture, it can be used to optimize water and waste management; and in marketing, AI chatbots have revolutionized the norms of customer service interactions and made it easier than ever for customers to find straightforward answers to their questions quickly.

Market research provides similar backing to AI’s versatility and value. In 2018, PwC released a report which noted that the value derived from the impact of AI on consumer behavior (i.e., through product personalization or greater efficiency) could top $9.1 trillion by 2030.

McKinsey researchers similarly note that 63 percent of executives whose companies have adopted AI say that the change has “provided an uptick in revenue in the business areas where it is used,” with respondents from high performers nearly three times likelier than those from other companies to report revenue gains of more than 10 percent. Forty-four percent say that the use of AI has reduced costs.

Findings like these paint a vision of AI as having an almost universal, plug-and-play ability to improve business outcomes. We’ve become so used to AI being a “fix” that our tendency to be strategic about how we deploy such tools has waned.

Earlier this year, a joint study conducted by the Boston Consulting Group and MIT Sloan Management Review found that only 11 percent of the firms that have deployed artificial intelligence sees a “sizable” return on their investments.

This is alarming, given the sheer volume that investors are putting into AI. Take the healthcare industry as an example; in 2019, surveyed healthcare executives estimated that their organizations would invest an average of $39.7 million over the following five years. To not receive a substantial return on that money would be disappointing, to say the very least.

As reported by Wired, the MIT/BCG report “is one of the first to explore whether companies are benefiting from AI. Its sobering finding offers a dose of realism amid recent AI hype. The report also offers some clues as to why some companies are profiting from AI and others appear to be pouring money down the drain.”

What, then, is the main culprit? According to researchers, it seems to be a lack of strategic direction during the implementation process.

“The people that are really getting value are stepping back and letting the machine tell them what they can do differently,” Sam Ransbotham, a professor at Boston College who co-authored the report, commented. “The gist is not blindly applying AI.”

The study’s researchers found that the most successful companies used their early experiences with AI tools — good or ill — to improve their business practices and better-orient artificial intelligence within their operations. Of those who took this approach, 73 percent said that they saw returns on their investments. Companies who paired their learning mindset with efforts to improve their algorithms also tended to see better returns than those who took a plug-and-play approach.

“The idea that either humans or machines are going to be superior, that’s the same sort of fallacious thinking,” Ransbotham told reporters.

Scientific American writers Griffin McCutcheon, John Malloy, Caitlyn Hall, and Nivedita Mahesh put Ransbotham’s point another way in an article titled — tellingly — “AI Isn’t the Solution to All of Our Problems.” They write:

“The belief that AI is a cure-all tool that will magically deliver solutions if only you can collect enough data is misleading and ultimately dangerous as it prevents other effective solutions from being implemented earlier or even explored. Instead, we need to both build AI responsibly and understand where it can be reasonably applied.”

In other words: We need to stop viewing AI as a fix-it tool and more as a consultant to collaborate with over months or years. While there’s little doubt that artificial intelligence can help business leaders cultivate profit and improve their business, their deployment of the technology must be done strategically — and within the understanding that the business probably won’t see the gains it hopes for on its first attempt to integrate AI.

If business leaders genuinely intend to make the most of the opportunity that artificial intelligence presents, they should be prepared to workshop. Adopt a flexible, experimental, and strategic mindset. Be ready to adjust your business operations to address any inefficiencies or opportunities the technology may spotlight — and, by that same token, take the initiative to continually hone your algorithms for greater accuracy. AI can provide guidance and inspiration, but it won’t offer outright answers.

Businesses are investing millions — often tens of millions — in AI technology. Why not take the time to learn how to use it properly?

This article was originally published on ChiefExecutive.net

By |2021-03-31T23:25:21+00:00January 23rd, 2021|Business, Technology|

5 Ways Entrepreneurs Can Enhance Local Communities

This article was originally published on Entrepreneur.com

Your entrepreneurial venture can’t be successful in a vacuum. Whether you are a web-based company without local ties, a small business rooted in one neighborhood or a real estate company in the thick of many regions, you can take the lead on contributing to local communities in a number of ways.

Doing so will increase your visibility among potential customers and will also promote social good to enhance the community you are involved in. Investing some of your time and resources into improving the local quality of life can have a ripple effect and be a valuable part of your business mission as your company evolves.

Here are some of the most impactful ways to stay engaged with the local community and enhance the community as a whole.

1. Sponsor non-profit organizations in the community.

Whether you are affiliated with a non-profit organization through your own personal efforts as an entrepreneur, or are simply looking for new ways to give back, consider sponsoring a worthy organization as a company. You could join events, like Startups Give Back, to connect with businesses that need your company’s help.

Many local organizations are looking for company sponsors to cover the costs of major events and some administrative expenses. They will do their part to promote your generosity through their marketing efforts, which can help you get more visibility in the community. You can also promote the organization in your own marketing collateral as a major sponsor.

2. Incorporate volunteering in the company mission.

Make a passion for social good part of your company’s mission so you and your employees can give back to the community together. Whether you are organizing food drives, volunteering at a soup kitchen or building houses, volunteering can create a sense of kinship and also serve as a team-building activity.

Consider organizing group volunteer sessions with your employees and encouraging team members to share their volunteer contributions with the rest of the staff. Encouraging a spirit of volunteerism and giving back within your mission statement – and through ways you operate as a company — can be beneficial to both team members and the community at large.

3. Design a business model that gives back.

If you are in retail or any other type of product sales business, consider donating a portion of the profits of each sale automatically.

If you are in the service business, you could design a business model that gives a portion of the proceeds to a charity or other non-profit organization. The goal is to automate the donation to a non-profit so that all customers and clients are aware that a portion of their purchase ends up with a good cause.

If your business can organically incorporate community enhancement into its ethos, that’s even better. The real estate industry is a natural candidate for such efforts, as developers have hands-on experience with neighborhood development projects and can take input from community representatives.

As your business gains momentum, you should consider branching out to more than one charitable organization or community project to serve as a philanthropist. As writer Annie Pilon explains in this article, “When you give to your community, the community tends to give back to you.”

4. Contribute to the local economy.

Make a commitment to buy supplies and raw materials from local vendors and partner with local businesses for any services and other business-related purchases.

Your purchases and investments will contribute to the local economy and may prompt business owners you work with to recommend you to other contacts or customers. Establish strong relationships with these vendors and partners as you develop and build your company to develop a solid reputation.

Opening new businesses or building new properties or even green spaces, like parks, can enhance a community by drawing in foot traffic and tourism. New visitors will patronize local businesses, stimulating the economy.

5. Promote local businesses.

In addition to being an active participant of the local economy’s ecosystem, you can take the lead on promoting other local businesses through co-marketing efforts or simply through referrals.

Encourage your customers to patronize local businesses that complement your’s, and they may even do the same in kind. The goal is to create a sense of community and camaraderie among other business owners since you are all invested in selling and marketing to the same customers.

Whether you work in technology, real estate or food service, there are various ways you can connect with the local community through your entrepreneurial venture. Showing your support for non-profits and community organizations can help you build value, both within the organization as you encourage a spirit of volunteerism and philanthropy, and with your customers as you show you are invested in your local community’s quality of life and future.

By |2018-10-31T18:00:26+00:00February 3rd, 2017|Philanthropy|

How Company Culture Shapes Business Outcomes

Company culture is more than just having a ping pong table and the occasional happy hour. It’s the essence of a business: the pervasive vision, values, and systems pulsing within employees, management, atmosphere and more. Some like to call it the genetic code of a company, though in some circumstances it can be more malleable than that.

More and more, good company culture is being recognized as vital to a company’s success; on the flip side, toxic culture has been witnessed contributing to huge failures. Built into business at its most basic level, company culture is both the result of a company’s structure and the support that keeps it standing. It’s both an outcome of hiring choices, and the force that drives them. It’s a self-perpetuating cycle: a company shapes its culture and the culture shapes the company, over and over or all at once.

Company culture is often developed gradually and without intention. At a company’s onset, certain things are decided implicitly: what goals are most important, the attitude it takes to get there, and even common personality traits and values. Even if the company starts with just one person — its founder — a culture is born from that individual’s choices when it comes to hiring and leadership. With each new decision and addition, the culture grows for better or for worse.

Company culture as motivation

The idea of company culture as a success factor isn’t new, but it seems the extent of its value is only on the precipice of realization. Some believe it is just as important, if not more so, than pay. Money is certainly a powerful motivator — as demonstrated with rats by B.F. Skinner in 1938, “operant conditioning” occurs when individuals are rewarded when their behavior is good and penalized when it’s bad. This method of compensation has been the primary model of employment for ages.

But reward and punishment aren’t enough to get the best out of people, Abraham Maslow’s theory of hierarchical needs suggested in 1943. Basic needs like food, water and shelter can be met by money, yes, but a whole pyramid of needs exist beyond the staples of life — like safety, love and belonging, self-esteem, and self-actualization. A workplace that makes employees (and clients) feel safe, welcome, proud and confident will yield higher result than monetary value alone.

Company culture is what either succeeds or fails at meeting these extra needs. Factors like robust benefits, comfortable office space, amenities, extracurriculars and relationship building shape the culture, which in turn motivates employees and impacts productivity.

The benefits of good culture

So, we know that company culture is important. But what can it actually accomplish? We can look at some success stories to get a better idea of what returns may come from investment in culture.

There are various companies that are known for their culture, and are likely successful, in part, because of it. Well-known innovation hubs like Google, Facebook, Twitter and Adobe boast impressive cultures that prioritize inclusion, teamwork and perks. Hiring the right people who will fit and thrive within the culture (in some cases, over qualification and education) differentiates these companies from the rest.

Research suggests that companies with strong, substantial, and adaptive cultures outperform their counterparts when they emphasize customers, employees and investors, fit the business environment and adapt to change. In this way, culture has a strong influence on economic performance.

Culture is more than just perks. It’s onboarding, work-life integration, and an ignition of passion that leaves workers positive about everything from mundane tasks to advancement opportunities. Positive culture makes for happier employees, better business, and also leads to employee retention, which saves time and money on hiring and training.

The risks of toxic culture

There are many qualities that signify a potentially toxic culture, or at the very least a dysfunctional one. Many of these stem from bad leadership, which tends to trickle down into management and employee well-being. Some signs include poor health, high stress, discomfort, fear, and a host of other issues that compromise the hierarchy of needs, as mentioned previously.

In other words, when employees feel unsafe, unwelcome, unmotivated and unheard, it is likely due to a toxic culture. Bad culture costs more than just feelings — productivity is lower, communication is strained, leading to bad business. Equally harmful can be a bad reputation, or worse, lawsuits.

A Gallup State of the American Workplace found that unhappy workers cost U.S. businesses $450 to $550 billion dollars a year in lost productivity. When these unhappy workers leave, it’s not much better: the cost of turnover from just 12 employees is about $250,000 when you factor in hiring costs. When employees are subject to incivility, they spend as little time at work as possible and decreased work quality; those that witness it like clients and coworkers are impacted for the worse, too. In other words, the toxins leak, affecting everyone in the workplace and beyond.

Turning a culture around

In the end, company culture shapes business through all sorts of aspects, like employee well-being, management style, and office environment. And because it often grows organically as a reflection of company values, it can be extremely difficult to turn around.

Changing a culture entirely is a daunting and possibly impossible task. But culture can always be improved, if those with the most influence are willing. And there are better ways than simply implementing a Taco Tuesday — like engaging employees with tasks, policies, and initiatives that keep them motivated and happy, or simply making them know their input matters.

Articulating company vision and ethics, supporting worker health and wellbeing, providing opportunities for training and development, fostering camaraderie, and encouraging healthy work-life balance can also go a long way. At worst, these steps will give employees a slight boost; at best, they will shape the entire business for the better.

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By |2018-10-31T15:59:53+00:00January 21st, 2016|Culture|