Why Algorithms require more strategy, individual leadership and Humanity.

We have heard a lot about Chat GPT in 2023 and it has engaged many discussions and debates around Artificial Intelligence. It seems to me that there is great confusion or misunderstanding about what AI can and cannot do. AI is of great help in many fields such as medicine and especially in cancer research. Today, entire areas of our economy rely on AI. AI is a valuable help for data processing and analysis and the scores to tests provided by the AI are quite impressive. However, we must remain cautious cause the results of the AI in processing the data, are only a reflection of what we put in the computer. In other words, from the present ! In business, AI can help the leader or manager get a head start, but it cannot predict what never happened: Inventions, market shift and failures ! Indeed, when algorithms calculate blows and their consequences, they examine an infinite number of assumptions – no matter how big they are, they never work with imagination. AI is not able to invent a disruptive strategy from scratch. The strategy is therefore not born from a series of mathematical deductions.

AI may be a valuable help to the decision but can not serve as a pillar to define a vision and build a strategy. In other words, the AI can look in the rear-view mirror but not in the windshield.

Artificial intelligence is nevertheless likely to have an effect on strategy. It is a new source of competitive advantages. In fact, the historical barriers to entry, those that protected large groups from the onslaught of small businesses, exploded under the effect of digitization : Massive purchases, large R&D budgets, large series production with big scale savings, or megaspend advertising no longer provide the same competitive advantage when a small brand can be the integrator of a value chain.

A small company can make an ultra-targeted advertising campaign at a lower cost with Google Ads, sell to the greatest number on an online platform or buy at very competitive purchasing prices on dedicated platforms.

Strategy seems to me to be above all a work of human reflection, based on knowledge, experience, and intuition. A good strategist is certainly someone who knows how to use the AI but in my opinion it is above all, a person who has studied humanities and is open to the world. Staying connected to the world through travel, meeting it with others, reading… etc. keeps a step ahead. Being as close as possible to the field and its stakeholders allows us to fully understand the challenges, constraints, and related opportunities. I do not think that the AI can fully know individuals from the accumulation of data on them. During my career, I did several personality tests and recruited many team members. Although these tests are very useful to have a first understanding of the personality, I have always been surprised to discover qualities that only situations can raise. Getting to know people deep motivations and doubts, demands emotional intelligence called empathy.

The fuel for algorithms are first and foremost masses of data, many of which are not useful.

It is necessary to know how to choose the one which makes leverage. And only the human Intelligence is capable of doing it.

Mohamed EL ASRI / Jan 25th, 2024.