“The proliferation of the modern motorcar is a sight that should compel any serious-minded horse to an uneasy consideration of his future.” – First President of the American Motorcar Association of California, circa 1920
After we and our domesticated equine partners capitulated to the superiority of machines at physical labor and transportation, the most successful companies and industries became those that leaned in the hardest. They include Andrew Carnegie’s US Steel, Leland Stanford’s Southern Pacific Railroad, and John D. Rockefeller’s Standard Oil.
Today, artificial intelligence (AI) technology should be causing similar unease. But it also heralds an opportunity and a challenge to business to harness this new cognitive power. Today, AI systems are already scoring better than the average high-school senior on the SAT. They are diagnosing disease and keeping up to date in realtime with medical research better than human doctors. And they are handling financial and media buying decisions with mind-boggling speed and intelligence. Today, competitive advantage in business is gained by recognizing where machines can be superior, and leaning in hard. Among the companies doing this are Google, Renaissance Technology with its hedge funds, and my own company, Rocket Fuel. Our AI-powered moment scoring technology buys and personalizes digital media to optimize results.
It’s the new Drucker: in an age of intelligent machines, an effective executive must not only have the capacity to design organizations with the right metrics and interfaces between individuals and teams of people, but also between people and smart machines. They also have to learn to design external interfaces between one company’s machines and those of another.
Super-investor Ray Dalio in his Bridgewater principles characterizes organization design as building a machine. He stresses the need to do so in a way that the machine will learn over time and increase its productivity and proficiency. Machine learning (a sub-field within AI) is already a way for this to happen. It may be Rocket Fuel’s technology learning from experience how to best advertise ice cream. Or WorkFusion’s software learning how to extract financial information from reports intended for human consumption. And Ayasdi is using AI to discover new subtypes of cancer. As Shelly Palmer of Landmark Ventures puts it, “Winning businesses today and in the future will be those that engineer an optimal collaboration between humans and intelligent machines.”
These new AI systems truly automate tasks in a way that traditional business automation solutions did not. Pre-AI, a “marketing automation” software package might track the schedule and workflows of the human tasks related to launching a campaign. Or Pre-AI, a “sales force automation” solution might track the activities of a sales force as they pester and persuade prospects into becoming customers. But the “automation” going on wasn’t automation of the actual sales or marketing tasks, just digitizing the paper recordkeeping and reporting on those tasks.
In a post-AI world, the AI systems themselves genuinely participate in the processes. Suddenly marketing automation means Rocket Fuel is autonomously discovering an audience of Indian expatriates who respond to a luxury car ad. Sales automation now can mean a machine-learned scoring function at InsideSales is sorting thousands of inbound leads to prioritize and assign to the right reps, taking over a job that may have been the purview of management previously.
I’ve been using an AI admin for roughly half of my meetings during the last quarter. The humans that “she” (her creators call her Amy Ingram, or “AI” for short) schedules meetings with rarely notice anything unusual about their interactions with her. It’s true, she can be stubborn and somewhat lacking in charm. One friend wrote “Amy keeps asking if I can meet you for lunch on Friday.. is she a robot or something?”
George John speaks on a session about “Intelligent Business Machines” at Techonomy 2015 on Monday Nov. 9. He co-founded Rocket Fuel to lead a major transformation in digital advertising. A recognized pioneer in artificial intelligence, John is interested in how AI can benefit humanity.