Responsible AI and Strategic Management
-in the context of excellence and leadership studies
Strategic management is a complex subject with massive literature behind it. A high-level overview must include aspects of planning, leading, implementing, and evaluating long-term organizational objectives. This short discussion focuses on a small aspect inspired by Tom Peters and his focus on excellence and leadership. This is a part of my more extensive research aiming at building responsible AI frameworks and constructing organizational methodologies for adopting responsible and ethical AI technologies.
Overview
Strategic management is complex, but we are fortunate that there is an abundance of excellent research in this field. A high-level overview will be extensive and must include a discussion on concepts like planning, leading, implementing, and evaluating long-term (strategic) organizational objectives.
Source: https://link.springer.com/chapter/10.1057/9780230523135_14
Artificial Intelligence (AI) can significantly impact strategic management in organizations and complicate the picture. AI and other new technologies like metaverse or augmented reality are just getting started. AI can play at least two organizational roles. First, AI can be a leading technology, being a part of the core business, for AI-centric organizations. Second, it can play a supportive role in analytics, planning, and supportive business functions. Either way, the impact will be enormous. Perhaps the most significant challenge occurs when a vast amount of multimodal and unstructured information needs to be analyzed to inform strategic decision-making. The SWOT analysis of those processes can be an enormous task.
Source: https://www.mdpi.com/2071-1050/13/4/2025
Dual Approach to Planning and Implementation: business process redesign plus leadership
For projects that have complex technologies like AI, the strategic management process runs on at least two levels: the business level and technology. Both can be rapidly changing because the competitive landscape is constantly evolving if technology is one of the driving forces. With this in mind, the analysis involves the industry, the competitive position, the regulatory situation that affects the technology and business processes, the human factors related to technology acceptance, business process redesign considerations, and leadership support.
Source: https://www.mdpi.com/2076-3417/12/5/2314
From these components, documented and organized in a coherent representation, an actionable strategic plan can emerge with timelines, cost-benefit analysis, and input from all stakeholders. AI or any advanced technology probably does not invalidate the classical strategic management processes but certainly adds complexity.
Source: https://www.ijsr.net/archive/v5i9/ART20161446.pdf
From this general overview and included resources, it is probably clear that there could be many methodologies to guide the strategy formulation and management processes. Fortunately, there is extensive literature on the subject of strategic management. Often, theories of leadership are combined with the process of formulating strategic directions, and rightfully so. Developing a long-term and impactful organizational plan requires leadership in tech and management as well as a strong corporate culture.
Source: https://stec.univ-ovidius.ro/html/anale/RO/wp-content/uploads/2019/02/6-3.pdf
Excellence and leadership: strategic driving forces
Tom Peters is one of the most well-known figures. He wrote extensively on strategic management driven by leadership. He coined the concept of "excellence" as a major force for strategy development. In their book "In Search of Excellence," Tom Peters and Robert Waterman identified several attributes that we can use as a framework for strategic management practice. Each one can be a cornerstone for the strategic process development.
-Autonomy and entrepreneurship: Successful companies are fundamentally groups of people that build success through flexibility, autonomy, readiness to change, and entrepreneurial spirit. Employees are motivated and empowered to take the initiative and to be creative in solving problems and developing new ideas. On the flip side, there is always risk in any undertaking. If we look at established organizations in the AI space, missteps often happen when figuring out applications for rapidly changing technologies. Those missteps can be costly and disruptive. Therefore, strategic management must include elements that foster risk-taking and forward-looking employees.
Source: https://www.pewresearch.org/internet/2018/12/10/solutions-to-address-ais-anticipated-negative-impacts
-Bias for action: AI and technology-driven companies, by default, have to be willing to take technology risks and act quickly in response to changes in the competitive environment. Research, experimentation, organizational change, and many others are sources that drive the strategy. However, not all actions must be driven by innovation. Optimization and business process continuous improvement is essential as well.
-Customer focus: now it is easier than ever to know the customer. Dedicated database systems run Customer Management Systems (CRM) and analytics. As a result, companies can focus on building a detailed current picture of customers' needs and predict future changes. Strategic management, by definition, looks further into the future. Therefore, predictive analytics is an essential technology. A deep understanding of customers' needs and preferences might require multimodal data analytics, multi-channel data collection, and advanced storage with ontologies helping to sort out the nuances.
Source: https://www.analyticsinsight.net/predictive-analytics-drive-business-strategy-a-guide-to-modeling-techniques-for-making-well-informed-decisions/
-Productivity through people: Successful companies recognize that their employees are their most important asset. Particularly today, high-tech requires extensive and up-to-date skillsets. AI is far from automating business processes, IT, and other organizational areas. Probably the very opposite is true. The technology stack for most companies continues to grow and evolve. Even in the ideal situation, where there are no tech-dept or no legacy systems, the complexity continues to increase. Therefore, the strategy needs to include training, growth opportunities, and building a culture where change and new technologies are embraced.
-Value-driven Organizations: Successful companies have a strong sense of mission and purpose that empowers and benefits their customers or users.
Source: Adamson, Greg, et al. “Designing a Value-Driven Future for Ethical Autonomous and Intelligent Systems.” Proceedings of the IEEE 107 (2019): 518-525.
AI is often problematic in this area. There is a growing awareness that advanced technologies enable infringement on data privacy rights. For example, many organizations in data-intensive areas collect data without explicit consent or rely upon terms-of-use agreements that are hard to interpret even by legal professionals. Often, bias in data causes unfair results and negatively impacts society. The list of problems that destroy organizational values can be much longer. The process of rebuilding the organizational values and winning back the customers is always hard and takes time.
Source: https://hbr.org/2019/07/building-the-ai-powered-organization
Organizations committed to delivering value to their customers must develop a transparent policy and communicate their commitment to positively impacting their customers. Strategic management needs to take into account this aspect. It is not a short or easy process. It might not be a core competence for most organizations, but external perception matters in the long run. Creating organizational value is a challenge that warrants a separate discussion.
Source: https://sloanreview.mit.edu/projects/achieving-individual-and-organizational-value-with-ai/
-Sticking to core competencies: Successful companies are focused on doing what they do best. They are clear about their core competencies and disciplined in their approach to new business opportunities. Managing organizational core competencies involves a strategic approach to develop, leverage, and protect the unique capabilities that give your organization a competitive advantage. Identifying core competencies might not be an easy task. Organizations might possess unique skills, resources, and business practices developed as a by-product of innovation. This can give an organization a sustainable competitive advantage. These could include areas of expertise, technology, innovation, customer service, or operational excellence. Startups or young organizations might not have a long history of excellence. They need to build core competencies as an intentional and conscious process. It might involve investing in developing the technology platform that uniquely implements AI algorithms, providing training that empowers designers and development teams, build organizational resources and tools that create efficiencies. Partnering with other organizations or academic institutions to leverage external expertise is common. Many academically trained scientists can help introduce technologies and bring ideas published in research papers to market.
-Strategic protection of IP: Core competencies are often very valuable. Therefore, safeguarding core competencies by creating barriers to entry, such as patents, copyrights, or other mechanisms, is often part of building a high-tech business.
Source: https://www.wipo.int/about-wipo/en/
