• Decision-making in the age of AI



    A recent article in Harvard Business Review titled, “As AI Makes More Decisions, the Nature of Leadership Will Change,” has sparked vigorous debates and discussions in the business and academic community alike. The article begins with, “It is tempting to regard artificial intelligence as a threat to human leadership. After all, the very purpose of AI is to augment, improve and ultimately replace human intelligence, which is still widely regarded, at least by us humans, as our key competitive advantage.”

    Indeed, AI has replaced many aspects on human intelligence and leadership. One of these is decision-making – probably the most important task a person or a leader needs to do every day. Classical business literature describes it as the thought process of selecting a logical choice from the available options. When trying to make a good decision, a person must generate various alternatives, weigh the positives and negatives of each option, determine which option is the best for that particular situation, and finally choose and implement the decision.

    These steps in decision-making are precisely the reason why much of the mundane and even important decisions in business and everyday life can be relegated to AI. It has the ability to replicate cognitive functions of a human being, that is, to learn, to logically weigh options, and to solve problems. Problem solving is the precursor to decision making – the process of working through details of a problem to reach a solution.

    From using Waze to set driving direction, to self-driving cars, to setting insurance rates, to autonomous robots in the factory floor, AI is already making decisions for humans. There is much compelling evidence that robots are better decision makers because human bias is everywhere. The old adage that says, “never sell to a hungry stomach,” affirms that human conditions such as hunger, sorrow and weariness affects the decisions we make.

    Apart from removing bias, AI is also getting more creative. While creativity is needed in problem solving and decision-making, increasingly AI is not only becoming master but more creative, too. This is according to the new book of MIT Professors Brynjolfsson and McAfee, “Machine, Platform, Crowd.” AI can produce the future New York Times best-selling novel and haute couture.

    So, if all these prognostications point to a bleak future for human decision-making, what is there left for our species to decide about? What augurs well for us, humans, is that, generally, letting go of some decision-making remains a slow process. Humans are resisting to assign the more important decision-making to AI, probably for self-preservation. Brynjolfsson and McAfee sympathize by saying, “We appreciate that losing decision-making authority you once had is uncomfortable, and that no one likes feeling like a servant to a computer.”

    That’s why in the next five years or so, the kind of AI that we will see progress and grow is augmented intelligence, that is, an AI learning from human input, which in turn, can make more accurate decisions based on AI information. We already see this in commercially available software and analytics packages that help companies in marketing decision-making, customer relationship management, recommendation systems, and so on.

    But in the next decade, we have to expect advances in AI will eventually replace most human decision-making activities, may it be in everyday life or in business. Hence, much of human decision-making will involve human interactions, behavior and emotions.

    Empathy will be a critical skill in the future that will enable people make decisions based on recognizing emotions in others and being able to “put yourself in another person’s shoes” – understanding the other person’s perspective and reality. This will be important in making decisions that involve new products or services, in hiring and in building teams, in collaborating with others, and even in making AI and technology in general more human.

    Decision-making with empathy will include three elements, such as listening – this is about taking the time to truly listen to each other; trusting – this is showing a belief in a person’s honesty or sincerity, through open communication and feedback; and understanding -this is about opening the mind and perceiving the feelings and intentions of others’ actions.

    Decision-making in the future will be a combination of AI and humans. But the human element will be more about understanding behaviors and emotions. We should all be behaviorists in the future.

    The opinions expressed here are the views of the writer and do not necessarily reflect the views and opinions of FINEX. The author may be emailed at reylugtu@gmail.com. The author is president and CEO of Hungry Workshorse Consultancy Inc., a digital and culture transformation firm. He is the chairman of the ICT Committee of the Financial Executives Institute of the Philippines (FINEX). He teaches strategic management in the MBA Program of De La Salle University. He is also an adjunct faculty of the Asian Institute of Management.


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