AI and Management in Organizations

In the years ahead, everyone from doctors, lawyers and scientists to journalists, will find themselves working with, and may be replaced by Artificial Intelligence machines. Computers are becoming increasingly capable of making decisions, taking complex actions, and performing “knowledge work.”

An Economist special report, "The Future of Jobs," described how entire professions will be impacted through automation and AI. Accounting and auditing examples of business functions which can increasingly be done by expert AI systems, putting these professions at risk, at least in their current form. Middle management decision making processes based on financials are similarly capable of being driven by AI algorithms.

At a Rotterdam School of Management (RSM) Leadership Summit on Big Data, an expert panel briefly discussed the implications of AI advances in terms of management. As an example, airline autopilots were raised as a domain where computer decision making surpasses human decision making. Similarly, with rapid advances in computer driven automobiles, such as Google car, we are now within generational sight of the obsolescence of human drivers.

Managers might like to believe that they have better hiring judgment than a computer, but a working paper (paywall) from the National Bureau of Economic Research suggests otherwise. The researchers looked at the employment record of 300,000 low-skill service sector workers across 15 companies. The jobs had low retention rates, with the average worker lasting just 99 days, but researchers found that employees stayed in the job 15% longer when an algorithm was used to judge their employability.

Which white collar professions may be immune to AI and automation? In essence, professions which help people find and pursue ‘meaning’ and fulfillment will be increasingly necessary. For example, ‘divinity consultants’ may work with people to help connect them to a religious tradition to which they will develop a personal connection. And imagine ‘leisure time advisors’ and ‘experience orchestrators’ – a hypothetical mixture of tourism specialist, hobby advisor, and therapist. Leisure time is increasingly a precious resource for which technology will compete for attention. Those who can manage the connection of personal desires and happiness to new technical possibilities will be in demand. But traditional jobs that are routinized and susceptible to algorithms can be replaced by AI and robots.

A study from the Human-Computer Interaction Lab at the University of Manitoba, suggests that you'll probably obey a robot boss nearly as predictably as you would a human. The researchers found humans willing to take orders from computers, but much less readily from other humans.

McKinsey’s Rik Kirkland, Erik Brynjolfsson and Andrew McAfee argue senior managers are far from obsolete. As machine learning progresses at a rapid pace, top executives will be called on to create the innovative new organizational forms needed to crowd source the far-flung human talent that’s coming online around the globe. Those executives will have to emphasize their creative abilities, their leadership skills, and their strategic thinking to a much greater degree.

AI sophistication will expand into many HR functions. For example, Jobaline, a job-placement site, uses intelligent voice analysis algorithms to evaluate job applicants. The algorithm assesses paralinguistic elements of speech, such as tone and inflection, predicts which emotions a specific voice will elicit, and identifies the type of work at which an applicant will likely excel.

Advances in technology are causing firms to restructure their organizational makeup, transform their HR departments, develop new training models, and reevaluate their hiring practices. This is according to Deloitte’s 2017 Human Capital Trends Report, which draws on surveys from over 10,000 HR and business leaders in 140 countries. Many of these changes are a result of the early penetration of basic AI software, as well as preparation for the organizational needs that will emerge as they mature.

A survey done by the World Economic Forum’s Global Agenda Council on the Future of Software and Society shows people expect artificial intelligence machines to be part of a company’s board of directors by 2026.

A report by MIT published in Sloan Review makes this provocative statement: “An inevitable shift in which a parent-to-child way of looking at the relationship between the manager and his or her team would be questioned and ultimately superseded by an adult-to-adult form. The nexus of this more adult relationship concerns how commitments are made and how information is shared. When technology enables many people to have more information about themselves and others, it’s easier to take a clear and more mature view of the workplace. Self-assessment tools, particularly those that enable people to diagnose what they do and how they do it, can help employees pinpoint their own productivity issues. They have less need for the watchful eyes of a manager.” One could easily imagine that the “the end of management” is in sight — crushed by peer feedback, pushed out by specialist roles, disintermediated by powerful platforms, and exposed by social network analysis.