12 Jun 2019
Professor Madan Pillutla explains how to improve good judgement in making financial choices and the importance of removing bias from investment decisions
22 Oct 2018
London WAC keynote: Strategic agility in a world of artificial intelligence
Managers should focus on what makes them and their firms unique if they want to benefit from Artificial Intelligence (AI), according to London Business School Professor Julian Birkinshaw.
The Deputy Dean of Executive Education, Professor of Strategy, was the keynote speaker at the 2018 London World Alumni Celebration.
Revealing his predictions for the future of AI and its impact on the workplace right now, Professor Birkinshaw’s address focused on the social impact of tech.
Today, AI is a very narrow form of intelligence, with each application optimised to one specific task, argued Professor Birkinshaw. So if the goal is hyper-efficiency in processing or logistics, AI can be very helpful. But when it comes to strategic planning, AI is too narrow in its thinking and it cannot offer a vision for a business or make long-term decisions.
“We need to retain the human touch,” said Professor Birkinshaw. “Managers need to do what markets and AI can’t: make decisions, be creative, be empathetic and demonstrate intuitive judgement."
“Those softer more empathetic skills, we need to continue to accentuate in a world of AI."
Professor Birkinshaw gave three tips for humans to rise above the limitations of AI:
1. Take a long-term view. Quoting strategy guru and former LBS professor Sumantra Ghoshal, Professor Birkinshaw said a key job of managers is to take resources from an immediately profitable area of the business and apply it to something that doesn’t generate instant monetary returns, such as research, training and development. This initially counterproductive behaviour – which AI cannot replicate – will, over the longer term, propel a firm to greater innovation, performance and profits.
2. Allow the unreasonable. Citing the oft-controversial founder of Tesla, Elon Musk, Professor Birkinshaw said firms needed to find room for ‘unreasonable’ people who create opportunities that change the world for good. AI isn’t a substitute for that, he said. Whatever his faults, Musk has transformed industries, according to Professor Birkinshaw.
3. Be contrarian. On the flip side of being ‘unreasonable’, Professor Birkinshaw said ‘robo-advisers’ in fund management were so reasonable that they risked duplicating each other’s strategies; each one conforming to an orthodox view of the market. “There’s a place for them, but if you want to beat the market you’ve got to be a contrarian,” he said. “Can we imagine a world of contrarian robots taking unusual and unorthodox positions on the market? I guess we can but it is a long way off. For me to be contrarian is to be human – it’s the ability to spot those opportunities that sets us apart.”