In this article:
1. Remember “the Information Age”? We’re now in “the Augmented Age”.
2. In the Augmented Age, machines will impact all aspects of strategic decision making.
3. This requires business leaders to embrace a co-existence model.
1. Remember “the Information Age”? We’re now in “the Augmented Age”.
First there was the Hunter-Gatherer Age, then 12,000 years ago came the Agricultural Age, followed just 300 years ago by the Industrial Age, and since the late 20th century we have been in the Information Age.
As we have progressed from the Industrial Age to the Information Age and beyond, machines have taken over work that people did. We see this in the three eras of automation [1]. In the 18th and 19th centuries we were in Era 1 where machines took away the dirty and dangerous work. Then in the 20th century Era 2 machines took away the dull work. And now in the 21st century we are in Era 3 with machines taking away the thinking (decision-making) work.
Brett Kings calls this the Augmented Age [2]. He defines three characteristics of the Augmented Age: 1. Artificial Intelligence that disrupts the nature of advice, that is better at everyday tasks (e.g. driving, healthcare, and basic services) than people. 2. Distributed, Embedded Experiences that are embedded into the world and devices around us, but enable frictionless, contextualized service, products, advice and value creation, which in turn are monetized based on their effectiveness (e.g. Apple Music Playlists, Amazon Prime Services). 3. Infrastructure improvements that radically change the way energy is delivered, the way people and goods are delivered, the way modern economies compete and the way markets value commodities (e.g. Drone Deliveries, 3D printing in your home).
I focus on Strategic Decision Making. So, in this article my co-author and I explore whether the “Augmented Age” is just another fancy concept or if this means that there will be fundamental changes to how strategic decisions are made.
Are machines capable of strategic thinking? Yes. Admittedly it is just a game, but some say that the board game Go requires the pinnacle of strategic thinking [3]. And, as you probably know, last year DeepMind's AlphaGo beats the world's best person at Go [4]. This follows machines achieving successes at Tic-Tac-Toe (1952), Chess (Deep Blue beats Kasparov, 2011), and Jeopardy (Watson, 2011).
It is important to note that these examples, and others like Siri, are instances of narrow AI, i.e. they are built to do one narrowly defined task. And, yes, they do it well, but they’re a far cry from general AI. That’s ok, because this article is about augmentation, not replacement.
When it comes to augmentation, the faculty of Stanford’s Strategic Decision and Risk Management (“SDRM” [5]) Program would say, and we would agree, that it is already being applied in our strategic decisions. Consider the concepts of System 1 and System 2 thinking made famous by Kahneman [6]. The SDRM guidance is to apply counteraction measures both at System 1 and System 2 level, i.e. develop new habits and improve awareness and mindware. And, they go further than that, they advocate what they call System 3 interventions too, i.e. reach for tools, data, and expert sources. In other words, they recommend reaching externally to augment our strategic decision making.
If that’s the case, then haven’t we then always been in the Augmentation Age for strategic decision making? Yes, but now the power of AI is such that that the extent of the role of machines in our strategic decisions is changing. The change is driving more “active” involvement in our decisions – machines are helping us think … not just executing our thoughts.
2. In the Augmented Age, machines will impact all aspects of strategic decision making.
Given that good strategy in a complex and uncertain world requires four things (great ideas, evaluated carefully, acted on decisively, executed with agility), what is the impact of the Augmented Age on each?
Great ideas: In Go, there are more possible moves than there are atoms in the universe. To win AlphaGo had to develop intuition [3]. Intuitive AI is emerging (see AI: your more reliable source of intuition) and is finding patterns in big data that might be the seeds of strategic insights.
Evaluated carefully: In the Augmented Age, multiple new ideas can be rapidly assessed, simulated or tested using ecosystems of people, AI, and robots.
Acted on decisively: We have designed it that most strategic decisions still require the ultimate decisions to be made by people (for a gripping example see “Eye in the Sky” [7]), but increasingly we will cede decision authority to the machine. Despite the understandable hesitation that you might have to take your hands off the wheel in a self-driving car, what will your choice be when insurance premiums become lower, because of demonstrably better safety statistics, for self-driving versus you driving? (I know what I’ll do, but then I’m in the small minority of people that acknowledge that I’m a below average driver).
Executed with agility: In a world of complexity and uncertainty no strategy should be cast in stone, instead we want to be able to course correct when the context changes. Machines offer us continuous monitoring and evaluation, scenario updates and simulation reruns, all this resulting in suggestions for fine tuning and course correction.
Because of their tremendous value, for the foreseeable future AI will play a role in strategic decisions. What roles for them, what roles for us? Since we’re still in control, we’re segmenting the roles between ourselves and our machines to our advantage.
“As smart machines shoulder more and more of the routine aspects of work, the work left for humans will become disproportionately creative, judgment-oriented, or social in nature, underscoring the importance of collaboration and networks” [8].
“Intelligent machines do not usher people out the door, much less relegate them to doing the bidding of robot overlords. In some cases these machines will allow us to take on tasks that are superior—more sophisticated, more fulfilling, better suited to our strengths—to anything we have given up. In other cases the tasks will simply be different from anything computers can do well. In almost all situations, however, they will be less codified and structured; otherwise computers would already have taken them over.” [1]
“We're using the human for what the human is good at: awareness, perception and decision making. And we're using the robot for what it's good at: precision and repetitiveness.” [3]
Seems like the role of machines in strategic decisions will increase. But, it is important to note that there are many forces acting against the relentless rise of the machines, e.g. concerns for data privacy, concerns that algorithms carry the biases of their designers or user communities (for a recent, clear example, see [9]), concern about machine choices in unpredictable situations, concerns about the opaqueness of decisions. We don’t think these forces will stop or reverse the machines, instead just slow things down a bit. And, that’s probably a good thing, especially since our ethical and legal frameworks need work.
3. This requires business leaders to embrace a co-existence model.
Reflecting on the above, it is not surprising that people have concerns ranging from the ordinary to the existential.
E. O. Wilson summarizes it when he says: “The real problem of humanity is the following: we have paleolithic emotions; medieval institutions; and god-like technology”.
And, while it is true that we have these imbalances, Kasparov, 20 years after losing to Deep Blue, reminds us: “The transfer of labour from humans to our inventions is nothing less than the history of civilization. It is inseparable from centuries of rising living standards and improvements in human rights” [10]. And he also says of machines: “Disruptive as they may be, they are not a threat to humankind but a great boon, providing us with endless opportunities to extend our capabilities and improve our lives. Intelligent machines will take over the more menial aspects of cognition and elevate our mental lives toward creativity, curiosity, beauty and joy” [10].
For white collar jobs, including the strategic decision maker, we are in the Augmented Age and intelligent machines are not going away. We have three options: to fight them, to ignore them, or to embrace them.
Henry Ford’s quote “Why is it every time I ask for a pair of hands, they come with a brain attached?” is becoming increasingly true of our machines in the Augmented Age. Best we plan to use that brain effectively.
Acknowledgements to my co-author for this article: Sudeshan Govender [11].
References:
[1] “Beyond Automation”, Thomas Davenport and Julia Kirby
[2] “Augmented: life in the Smart Lane”, Brett King
[3] https://www.ted.com/talks/maurice_conti_the_incredible_inventions_of_intuitive_ai
[4] https://en.wikipedia.org/wiki/AlphaGo
[5] http://scpd.stanford.edu/public/category/courseCategoryCertificateProfile.do?method=load&from=courseprofile&certificateId=1145835&
[6] “Thinking, Fast and Slow”, Daniel Kahneman
[7] http://www.imdb.com/title/tt2057392/
[8] The promise of artificial intelligence: Redefining management in the workforce of the future,” Accenture Institute for High Performance, 2016.
[9] http://www.theverge.com/2016/3/24/11297050/tay-microsoft-chatbot-racist
[10] https://www.wsj.com/articles/learning-to-love-intelligent-machines-1492174086
[11] https://www.linkedin.com/in/sudeshan-govender-6432ba3