The AI-Powered Organization
Focusing on your people and your culture will give you the leg up in the race to being an AI-powered organization.
The use and adoption of Artificial Intelligence (AI) has been growing steadily these past few years while the intention (e.g., the “want”) to use AI is growing exponentially. Every company wants artificial intelligence sprinkled throughout their organization, but most companies aren’t ready or able to take advantage of what AI can offer.
Without a culture that allows independent decision-making, the investment into AI technologies could be money wasted.
Implementing AI within a company is much more than turning on some technology. To ‘do’ AI right, you’ve got to take a good, hard look at the people within your organization - from the top down (and the bottom up). Artificial Intelligence requires a company to think about data (from capturing it, storing it, analyzing it, using it, etc) to how the output of AI systems/processes is used. Without a culture that allows independent decision-making - or at least some latitude in how data-based decisions are made and used - the investment into AI technologies could be money wasted1.
Without the right people in place, AI is just another tech stack in your organization. A company needs people that explain not only the *what* of AI, but more importantly, they need people that can explain the *why*. Without the context of *why*, artificial intelligence is just bits and bytes stored in databases. Without context, you’ve just spent millions throwing the newest, sexiest tech at data for little to no return.
What is an AI-powered organization?
Before we get into the deep end with AI, culture, and organizational capabilities, let’s define exactly what an “AI-powered organization” is.
Remember in the recent past when the focus was on being a “data-driven organization”? Yeah. That. It’s the same thing (but kinda different).
In its simplest form and definition, I define the “AI-powered organization” as:
An organization that has built a culture around data to allow its people and teams to use disparate data-sets to incorporate machine learning / artificial intelligence to make decisions. Then (and most importantly), empowering those people to use the outputs of those systems and processes to make decisions without waiting for someone higher up the chain to approve that decision.
Any company can invest money into artificial intelligence technologies, systems, and processes. They can take that investment and throw it at their data and technology, but without the proper people and culture in place, the outcome of that investment is almost guaranteed to be a lower return than if you focus on people and culture in addition to technology2.
The combination of AI/machine learning, proper methodologies to build those systems and the people/culture within your organization can be the start of a solution to many problems.
Without the investment in people, culture, and processes, artificial intelligence will be yet another investment in technology that will sit in the same space as data lakes, business intelligence, big data, and all the other technology that companies have thrown into the mix over the years. None of those other technologies/processes worked well either without the focus on people, processes, and culture.
One caveat: AI/machine learning isn’t the “answer” to any question or the solution to any problem. The combination of AI/machine learning, proper methodologies to build those systems and the people/culture within your organization can be the start of a solution to many problems.
Why culture is important
Let’s work through a scenario with two different companies.
WdgtXprss (the company used to be called Widget Express but changed its name to fit into the tech bubble ‘cool name’ club years ago). The CEO is a hard-charging, hard-working, intelligent person with years of experience in the widget manufacturing industry. The CEO has built a leadership team that matches their drive and ambition, and by all measures and plans, WdgtXprss is set for enormous growth in the coming years. The business is very much a top-down business where the strategy is set by the CEO and the board and is pushed down to the rest of the business. Business line managers are ‘kept in line by the leadership team and are expected to run most decisions up the chain of command to ensure all decisions fall in line with corporate strategy.
Widgets Incorporated is led by a CEO with a similar background. This CEO doesn’t have quite as much experience as the WdgtXprss CEO does, but they’ve been around a while. They are also quite intelligent, and hard-working and have a good feel for how the company should be run. They have a bit of a different leadership style though. They are much more of a ‘bottom up’ leader. While strategy is set by the CEO and board, the execution of that strategy is left in the hands of the people that know their piece of the business the best. Business line managers have full authority to make decisions and drive change within their departments (following the high-level strategic plan set by the business leaders).
Both companies have been looking at AI solutions to help manage their supply chain. They both have great solutions picked out (great vendors and great consultants to implement the solution), and both have a good budget set aside for implementation, training, and solution/data management for the next few years. Both have the plan to use this new AI solution to help drive revenue, cut costs and make operations more efficient. Interestingly, both companies have chosen the exact same solution, implementation partner, and consultants to help them out. Basically, everything is equal except the culture of the organization.
What do you think happens?
I can tell you what happens…because I had some involvement with both companies during/after implementation. For both companies, the implementation goes smoothly. The solution works the way it should. Both companies have fantastic data and processes to ensure the data is managed well. The new AI solution has everything it needs to provide real value to both businesses.
But (there’s *always* a but, isn’t there?) —WdgtXprss has some problems. They aren’t seeing the value in the topline or bottom line of the company. In fact, they are seeing more ‘problems’ showing up. There are slow-downs in the processes that they hoped to see speed up. There are more costs involved than they expected (because of the slowdowns). The business line managers now have much more data and more ‘inputs’ than they ever have, but because of the business culture and the expectation that they run their business decisions up the chain of command, things are slowing down. They aren’t able to act upon the outputs from the new AI solution quickly enough and, in many cases, the suggestions from the new solution are being overridden by higher-ups.
Widgets Incorporated, on the other hand, is seeing real progress and noticing a lot more value in its new AI solution than expected. The business line managers are using the AI solution output to make decisions, and they have the ability to implement the changes that are suggested without ‘checking in’ with their leadership teams. They can also make decisions on how best to use these new outputs to improve operations and make things more efficient. They don’t have to wait for anyone to ‘approve’ their changes or ideas….they are empowered to make decisions and do what they need to do.
Why is there a difference seen between the two businesses? Everything is generally the same across the board - except for three things.
Culture. People. Processes.
Now, one could argue that the ‘people’ and ‘processes’ are always going to be different between companies - and that’s correct. But ‘culture’ drives everything, including people and processes.
Getting your culture right
If you can get your culture right, the money you spend on new solutions like AI and machine learning might be money well spent. Otherwise, if you have a culture that allows for independent thinking and decision-making, there’s a chance your new, fancy, expensive AI solution is going to provide some value to the organization.
That said, there’s no guarantee. AI isn’t the end-all, be-all answer (even though people like to think it is). Before spending money on the new, sexy thing like AI or machine learning or whatever is ‘next,’ spend some time and money on your people and your culture. That money will pay dividends for years to come.
Building the AI-Powered Organization. https://hbr.org/2019/07/building-the-ai-powered-organization
Breaking away: The secrets to scaling analytics. https://www.mckinsey.com/capabilities/quantumblack/our-insights/breaking-away-the-secrets-to-scaling-analytics