The Crucial Piece of AI That Businesses Are Still Missing
In the race to adopt AI, businesses are quick to focus on the latest technology, algorithms, and data-driven insights. The proliferation of artificial intelligence software has revolutionized the way businesses approach problem-solving, innovation, and customer engagement. But the true power of AI lies in augmenting human intelligence, not replacing it.
The most successful organizations understand that AI's potential is fully realized when it works in harmony with human expertise. This balance—where human intuition meets machine precision—is the crucial piece that many businesses are still missing.
In this Q&A with AI thought-leader Nada Sanders, ranked by Stanford as one of the world’s top 2% of scientists and author of 100-plus top-tier scholarly publications and seven books, including The Humachine: AI, Human Virtues, and the Superintelligent Enterprise, we explore real-world examples where the combination of AI and human decision-making has led to remarkable outcomes, from space exploration to cutting-edge fraud detection. I ask about the strategies businesses can use to foster a culture where AI is seen as a tool for enhancing human capabilities.
By addressing the unique strengths of AI and human intuition, leaders can drive superior decision-making and sustainable growth in the dizzying landscape of AI.
Real-World Success Stories: When AI and Human Expertise Combine
Can you share some real-world examples where AI and human expertise have successfully combined to solve complex problems?
"There are countless examples. In fact, the best decisions often come from combining humans and algorithms.
Consider this monumental case: During the Apollo 11 mission, Neil Armstrong manually took control of the Apollo Lunar Module when its autopilot directed it toward a hazardous landing site. Armstrong skillfully piloted the craft to a safer area using limited fuel, with Buzz Aldrin providing critical data.
This manual intervention ensured a successful landing on the Moon, captured in the iconic message, “Houston, Tranquility Base here. The Eagle has landed.” Without this human override, the crew likely wouldn’t have landed safely.
In today’s business world, there’s a bounty of examples, though they’re not as dramatic. JPMorgan Chase uses AI algorithms to analyze transactions in real-time, identifying patterns that suggest fraudulent activity. Human analysts then investigate what’s been flagged to confirm fraud and take necessary actions. This approach enhances the efficiency and accuracy of fraud detection, reducing financial losses and protecting customers.
Similarly, Siemens uses AI to monitor equipment performance, predicting potential failures before they happen. Siemens engineers use AI insights to schedule maintenance and repairs, preventing downtime and extending the life span of machinery.
In retail, Sephora uses AI-powered virtual assistants to provide personalized beauty recommendations based on customer preferences and purchase history. Beauty advisers use AI-generated suggestions to offer tailored advice and enhance the shopping experience. Altogether, AI has increased Sephora’s customer satisfaction and sales."
How can organizations effectively balance the strengths of AI and human intuition to make superior decisions, avoiding the pitfalls of overreliance on either?
"Humans and machines are innately better at different skills and complement one another. This is called Moravec’s Paradox: what machines are good at, humans are not, and vice versa.
For example, machines and AI are far superior at processing vast amounts of data precisely, efficiently, and without error. However, they don’t understand context or grasp the “inside information” of a business. Most critically, AI is only as good as the data it’s based on, which is historical. Therefore, it only looks backward.
Consider how, during the COVID-19 pandemic, algorithms couldn’t forecast correctly. As John Sicard, CEO of the supply chain software firm Kinaxis, told me during an interview: “All math-based models collapsed during COVID.” Humans, on the other hand, understand context and if something new is happening that’s not evident in historical data.
So, how is it best to combine them? Use AI for routine tasks that can be automated but aren’t critical. Use humans for important decisions and allow them to override algorithms when new information becomes available—just as we saw during the Apollo 11 mission.
Likewise, leave fewer routine decisions to humans, as human beings, by nature, get tired and have limited processing ability. Use AI for volume and automation. Leave humans to handle the important decisions and exceptions."
Fostering a Culture of AI-Human Collaboration
How can businesses foster a culture of human-AI collaboration where employees embrace AI as a tool for enhancement rather than replacement?
"The best way is to get everyone involved in AI, from its selection to training. Discussion about AI should never be relegated to the water cooler rumor mill. Instead, discuss AI in open forums. Be transparent about the business’s intentions and keep the communication flowing.
Businesses should train workers to help them develop new skills, from the digital literacy required to work with AI to refining human-only skills such as negotiation and interpersonal communication.
Every business must also develop a culture that creates a sense of belonging and assures workers that they won’t lose their jobs to AI. Workers need to understand that the company is investing in them and that AI is only a tool to help workers be better at what they do. Workers who are afraid of losing their jobs will sabotage success. But workers who see AI as a tool to enhance their performance—especially if the business rewards that performance—will do a superior job."
Why is it critical for leaders to take proactive steps in adopting AI now rather than waiting for the technology to become more mature or standardized?
"I would argue that it’s not critical for leaders to adopt AI now. Business leaders shouldn’t fall for the hype and may want to wait for the technology to mature. They should begin by reassessing their business model and competitive priorities. Are there AI technologies that will enhance how they compete in the marketplace? Businesses should select the AI that’s best suited to help them win—rather than following the leader. Start with a small project that’s targeted in scope to test the AI’s success and efficacy.
At the same time, businesses should strategically invest in talent and human resources to retrain employees and hire the best talent possible. We’ve repeatedly found that the key to AI success lies with people."
Building an AI-Powered Business
What are the 3 key principles that leaders should understand to successfully build and sustain an AI-powered business?
"First, select AI that will enhance your business model. AI is becoming standardized and copyable. What’s not copyable is fusing your unique business model and human talent with technology. Adding AI to a business model of the past won’t lead to competitiveness—it will just solidify old processes. Before attempting to integrate AI, corporate leaders must reassess and update their business models.
Second, AI needs to work alongside human decision-makers; your people, not bits and bytes, should make the important decisions. AI is based on historical data that may not hold true in a volatile business environment. Business decisions aren’t made in a vacuum separate from the issues of labor, inflation, and geopolitics. Interpreting and balancing these matters with business needs is where the expertise of humans reigns supreme.
Third, cultivate new human skills within your workforce. In our executive interviews, we repeatedly hear that the new competitive advantage involves “human interpersonal skills,” “human creativity,” and “personal relationships.” In fact, the human skills deemed most critical by leaders are interpersonal skills, such as basic conflict resolution, communication, emotional detachment, and mindfulness. While digital literacy is expected, effective interpersonal skills are the priority.
These uniquely human skills are often in short supply and may require training. As Maria Villablanca, co-founder and CEO of Future Insight Network, highlighted, 'Companies need people that can be creative and innovative in the way they find solutions. Companies need creative problem solvers with interpersonal skills. Machines cannot compete with that.'"
How can businesses reskill and upskill their workforce to thrive in an AI-driven environment?
"Through continual training and lifelong learning. A great example is offered by Rod Harl, CEO of Alene Candles, a company with 80% revenue growth over five years. Rod told us that his company’s best decision was investing in developing employees’ interpersonal skills and mindfulness. The company has training experts come on-site multiple times a week. As Harl explains, combining these skills with human creativity has been “the secret sauce” that led to the company’s success."
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Leadership’s Role in AI Integration
What role does leadership play in creating a workplace culture that embraces AI as an opportunity for growth and innovation?
"We’re in a transitionary period where workers are afraid of losing their jobs to AI. These workers can sabotage the success of AI implementation and, worse, not be available for the critical human decision-making that’s required when AI is in place. It’s up to leaders to create a culture that helps workers accept AI without fear. Reassure your workforce that jobs won’t be lost. Train your teams to demonstrate the company’s commitment to its people. Be transparent. And invest in ongoing team- and culture-building."
By understanding the unique strengths of AI and human intuition, businesses can drive superior decision-making and sustainable growth. Foster a culture of innovation and embrace AI as a tool for enhancement by investing in employee training, creating a sense of belonging, and prioritizing human skills alongside technological advancements.
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