Here Are the Right (and Wrong) Ways for CEOs to Use ChatGPT

“Help me plan our family vacation to Japan.”

And so it began last year — my foray into the world of ChatGPT and generative AI. Like so many people exploring generative AI for the first time, I was immediately intrigued — here was a technology that could write original poems, generate speeches, do research, plan vacations...all within a matter of seconds.

But while for casual users ChatGPT may be an entertaining novelty, this year’s rapid rollout of generative AI tools has presented a quandary for boards and business leaders across industries. With good reason: the risks and opportunities posed by generative AI are too important to ignore.

While many had anticipated such AI tools would develop incrementally over the next few years, as businesses experienced with social media, 5G, and VR/AR, we instead witnessed a sort of Cambrian explosion — a step change in technological possibility, seemingly overnight.

Worryingly, only 16 percent of the more than 1,000 global executives in a recent BCG/MIT Sloan Management Review survey said their companies had mature AI governance processes, according to KPMG’s most recent Directors Quarterly. Few C-Suite executives in KPMG’s own survey said they were directly involved in AI risk and governance strategy development.

As a communications advisor to executives at several Fortune 500 companies, I know ignoring or downplaying this defining moment just isn’t an option for leaders. While the generative AI space is new and rapidly evolving, here are some initial tactical and strategic applications for leaders, as well as important caveats everyone should be aware of.

Time-saving (and data-crunching) AI tactics for leaders

One of the most valuable resources for CEOs is their time. And despite the wealth of support staff and tools available to leaders, studies conclude that much of that time is poorly spent. A detailed analysis from Harvard Business Review, for instance, concluded that leaders spend nearly a quarter of their time just on email.?

It’s in this seemingly mundane arena of emails, agendas and summaries that generative AI truly shines right now. For example, OtterAI’s OtterPilot can listen to your meetings, take notes and create a summary with action items. Microsoft’s Copilot promises to triage your email and draft responses, prepare you for customer calls, and rationalize your schedule.

But as CEOs consider the potential of generative AI tools, it's important to note that the benefits extend far beyond simple time-saving measures — as exciting as the time efficiency may be.

One area where generative AI has already proven its value for leadership teams is decision-making —?identifying patterns and actionable insights in large data sets that humans may be unable to detect. In 2022, even before ChatGPT and subsequent generative AI tools became widely available, 41 percent of companies used some form of AI in day-to-day recruiting and hiring processes, according to Deloitte researchers. Expect that number to increase exponentially before year’s end.

Supply-chain optimization represents more low-hanging fruit for generative AI. With its ability to crunch limitless data from multiple sources, AI can be used in demand forecasting (pulling together historical data, market trends, seasonal fluctuations, etc), transportation and routing (identifying optimal routes and schedules), inventory management (determining optimal reorder points), and even dynamic pricing and sales (considering demand shifts and inventory availability).?

Strategic applications of generative AI for leaders

But it’s on the strategic front where the greatest rewards of generative AI for leaders stand to be reaped.

As Deloitte researchers have found, companies with a high rate of digital maturity – those who have leveraged digital transformation to deliver positive business impact – report annual net revenue growth and profit margins significantly above their industry averages. In the years ahead, generative AI will be an unprecedented accelerant for this kind of digital transformation.

When it comes to research and development, these tools can be used for brainstorming and idea generation, yielding concepts that might not have been considered by human minds alone. This can lead to innovative solutions and new business opportunities. The New York Times reports that commercial AI is already being used to design hardware for space missions that’s lighter, stiffer and stronger than anything conceived before.

As for more down-to-earth applications, another strategic use case for generative AI is market entry analysis. Suppose a leadership team at a software company is contemplating an entry into Southeast Asia. Traditionally, a chief strategy officer with a team of MBAs would dive into everything from market size to regulatory barriers and competitive landscape. To be clear, this expertise is still invaluable. But already generative AI can quickly and accurately generate a “first draft” — identifying key considerations for entering a new market or expanding a current offering.

More broadly, rising interest rates and inflation have placed increased emphasis on productivity across businesses of all kinds. Here generative AI shows tremendous promise and is already attracting interest from top leaders. One CEO told me he’s investing hours of his time every week to understand AI and its potential impact on his industry and business. Where can it empower and accelerate the analytic productivity? How might it better identify potential clients and match them with the right services and products? While he appreciates the risks associated with AI, he has concluded those risks are lower than the cost of not innovating and integrating this game-shifting technology.

An important word of caution for leaders experimenting with generative AI

Despite generative AI’s exciting potential to transform companies, it's important to proceed carefully.

Importantly, companies should not presume privacy when using generative AI. Checking terms of use is critical. For many of today’s most popular tools, it’s advisable to err on the side of caution and avoid any queries you wouldn't want to see on the front page of the New York Times, in a legal deposition, or in competitors’ hands.

Likewise, ChatGPT’s tendency to be confidently wrong is well documented, including its habit of “hallucinating” and sharing inaccurate information alongside true facts, even when the accurate facts are in the public domain. (For a startling example of what this looks like, consider inputting your own name into a query and asking for a bio: Mine sounded professional, but half the dates and details were completely erroneous. I never served in Iraq or attended Harvard.)

For this reason, as companies create governance frameworks to guide the integration of generative AI into business practices, they would be wise to allocate resources and processes around fact-checking, as well as consistent guidelines for transparency and disclosure.

At the same time, experts warn of generative AI fueling an explosion in cyberattacks as it becomes easier to mass produce malicious code and ever more effective phishing and fraud scams. Misinformation will also pose a greater risk in this new era. A short seller, activist, or disgruntled employee will be further empowered to create fake content that’s increasingly hard to distinguish from the real thing.

Finally, CEOs must also ensure that their use of generative AI aligns with their company's values and audience’s expectations. For instance: bot-assisted text might be fine for perfunctory emails, but employees may be disappointed to find that a “heartfelt” speech from the CEO turns out to be cut-and-paste straight from ChatGPT. Likewise, consider your DEI goals and how you’ll guard against reinforcing bias built into AI. Be mindful as well that your vocal enthusiasm for AI may be interpreted as a threat to knowledge workers’ job security. IBM CEO Arvand Krishna recently projected that as many as 30% of current back-office roles at the company might be replaced by 2028.

By being aware of these potential pitfalls, company leaders can harness the transformative power of generative AI while mitigating potential risks and ensuring their use of this technology aligns with values and business goals.

Aside from the tactical and strategic considerations, there’s a broader lesson here for company leaders. We’re increasingly living in an era of disruption — whether that be technological, geopolitical, environmental or otherwise.

Most leaders are trained to be attuned to the risks, opportunities, and trends within their industries. But in this era of rapid change, disruption can come from seemingly out of nowhere. Learning to keep one eye on “blips on the radar” like generative AI ensures forward-thinking leaders stay ahead of the pack.

Thanks for reading! I want to hear from you – message me your questions, ideas, and thoughts, and I'll work your suggestions into my future content and research. Let me know your thoughts in the comments below, and be sure to subscribe here to receive a notification when the next edition is published.