Are Corporate Boards Ready For Generative AI?
Everyone in the tech business world has a ChatGPT story.
My neighbors, a young lawyer couple, like to give their home projects a name much like their projects at work. They recently wanted to get some chickens, and as we were searching for a name for their new backyard chicken project, I decided to ask ChatGPT. It was a simple ask for one name.
Boom. Project Flock was born. ChatGPT nailed it in one shot.
Made us laugh and we thought it was an instant winner. Curious and intrigued, we asked ChatGPT to give us five more name choices. Less than a minute later we had:
Clucking Acres
Feathered Haven
Hen House Homestead
The Coop Connection
Poultry Paradise
My wife, Jessica, who is a real deal branding and naming expert was awed. My brain went into overdrive. Did ChatGPT really think of these 5 names before it decided Project Flock was the winner? Maybe it thought of 100 names or more? How much compute energy was used in that thinking? How many hours would it take John Hamm to think of it or something better? And then happiness set in. Our lawyer friends have a new winning venture. They can probably raise $10M from some VC on that name alone.
The use cases for Generative AI are remarkably diverse. They target knowledge and creative workers who emerged mostly unscathed post industrial revolution. Legal documents can be pre-prepared, RFPs can be answered, service scripts can be written and “botted”, strategy documents can be bulleted, research can be automated, marketing from branding to content to SEO can now benefit from Generative AI.
We are at the precipice of automation of the knowledge and creative economy.
Industrial revolution transformed manufacturing. Generative AI will similarly revolutionize decision making, and creative design. Our minds can’t yet capture the possibilities of this future. When the internet initially arrived, our imagination was limited to brochureware websites. No one predicted every moment of our awake life (and even sleep life) would be on the internet. Internet created connectivity and access. Generative AI is now pushing replacement of human thinking and creativity. While it is not sentient, it will be very human like.
Board members need to get ready and deeply think of the underlying implications NOW.
The new AI is no longer a tech, cybersecurity, marketing, data, privacy, or ethics issue. At its core it’s re-imagination of work, society and corporations. The very fact that Generative AI can create new things, will challenge where businesses add value. It will challenge present business models and create new ones. Naturally, it will also force rethink of a businesses purpose, vision, strategy, and values.
Let’s take two examples.
Nike today excels as a shoe design and a retail distribution company. In this new world, shoe design will be “mostly” automated? Where does Nike’s new competitiveness comes from? Is retail distribution enough of a value add? How does it impact Nike’s future purpose, vision, and strategy and values?
On the human operating side, labor arbitrage led to the boom of outsourcing companies. Now these very companies risk being replaced by AI models. The new world will replace people with “intelligence” servers and wages will compete with “compute” costs. This is the start of a highly disruptive corporate transformation.
As businesses are rethinking themselves, humans collectively are exposed to significant risk of runaway AI in wrong hands leading to mass manipulation, misinformation, and deep fakes. Corporations will undoubtedly need to learn how to deal with new internal and external PR nightmares as a result.
Boards will need to work with management teams on AI strategy planning, and create an iterative think, monitor, ideate, plan, and implement a framework to deal with this new future. It will need alignment with customers, employees, investors, regulators, peers, and public policy organizations like NACD.
We can use our ingenuity to create board governance for the next era. But are the boards ready? We need them to be, before the eggs hatch!