‘Is this current explosion of AI real and lasting, or just another tech bubble?’

‘Is this current explosion of AI real and lasting, or just another tech bubble?’

Jun 15, 2023 | Change, Governance, Strategy

 

 

There is no way around the fact that AI is now with us, and evolving at logarithmic rates. The unanswered question is ‘so what?

There are two extreme schools of thought, and everything in between.

On one hand we have those who are extremely wary:

#  It will replace jobs, creating an unemployed under-class

#  It will take away peoples rights to privacy, choice, and freedom, creating risk from baddies

#  The buggars will take over, we become the slaves of some dystopian thinking ‘terminator’ machines.

On the other hand, there are those who see:

#  Huge commercial and community benefits from the automation and efficiency AI brings

#  Every platform change in the last 200 years from coal to electricity, horses to cars, vacuum tubes to integrated circuits, PC networks to the cloud, all delivering huge benefit. Why not again?

#  The risks are manageable, and less than the benefits that will flow, besides, it is now an unstoppable force, so choices are limited.

Let’s first have some context.

We have been idolising AI from our earliest times, seeking assistance, advice and guidance from all manner of sources. The beguilingly named Ada Lovelace, daughter of Lord Byron wrote what is seen as the first ‘software’ for the Babbage machine in around 1840, with Babbage taking the credit. In 1943 the first paper that associated the neural networks in our brains to electrical circuits was published. In 1950, 73 years ago, Alan Turing wrote a paper called ‘Computing machinery and Intelligence’ which posed the ‘Turing test’.  This remains the central question of AI: ‘When can machines think?

The term AI emerged from a 1956 workshop held at Dartmouth College, seen as the birth of modern AI. It kicked off research work in many corners of the scientific world. Google, Microsoft, Amazon, Apple, scientists, and many startups such as Deep Mind, now part of Google, and OpenAI the designer of Chat and Dall-E, significantly funded by Microsoft, have been working on this since the 90’s. The ‘T’ in ChatGPT stands for ‘Transform’ a patented technology breakthrough by Google.

This long scientific road led to an inflection point last November when OpenAI let Chat GPT out into the wild to see what would happen, and take the strategic ‘first mover’ advantage.

What AI is: the application of maths and software code that ‘teach’ computers to synthesise information and generate output. It is controlled by people, although even the scientists are not always sure of what goes on inside the black box of software.

What AI is not: Killer software and robots that spring to life and take over by killing and/or subjugating people.

How does it work? Statistics and probability, combined with huge computing power.

The probability of a ‘u’ following a ‘q’ in English is very high, the probability of that q being followed by any other letter is very low. The probability of that ‘u’ being followed by an ‘e’ is higher than it being followed by a ‘z’. And so it goes, letter by letter, word by word, progressively taking on the context in which those letters, words, sets of words, and sentences are reflected, such that the difference between a ‘party’ in the sense of a happy event, versus a ‘party’ in the political sense is clear.

Having sorted all that out, what are the things we should be thinking about?

  • AI as an augmenter. A tool that can assist us to outcomes that are smarter, quicker, and more comprehensive than we might have reached on our own. The role of humans will not be eliminated, but it will be changed.
  • AI as a broker. AI stands between us, and an outcome we may not know how to reach, but can be facilitated by AI. You want to write some code, now you do not have to be a coding whizz, AI can do it for you quickly, and with reasonable levels of success.
  • AI as a magnifier. Every kid can have an IA tutor, every doctor an AI coach, every scientist an AI collaborator, this will lead to potential productivity growth, scientific breakthroughs, creative boundaries being busted, reduce death in wars. The downside is also magnified, there is always a flip side to be managed.
  • Should we be concerned with ‘Synthetic Empathy’? we humans are social animals, what impact will this accelerating trend to isolation from physical contact and interaction have on our collective psyche?
  • Blue Vs White collar displacement. Every platform change in our economies over the last 250 years have displaced blue collar workers, in favour of white collar so called ‘knowledge workers’. This one is different, it is the white collar knowledge workers, those who shuffle stuff around who are in the gun. There is no AI/robotics that can replace Albert the plumber, or Steve the sparkie. AI will change the support mechanisms they use, but will not change the simple act of fixing the leak in your bathroom or installing that extra powerpoint in the kitchen..
  • Regulation. How can, and indeed should, we regulate, somehow. It is remarkably difficult to regulate something that does not exist. We have failed to regulate social media, despite with the benefit of hindsight, recognising the damage it can do. Compared to AI, regulating Social media would be easy, and we have failed to get that done. The problem is how do we go about crafting regulations that do anything at all beyond catching silly stuff, when it is in the outliers, and things we do not see other than with hindsight, that the real danger hides.

To answer the question posed in the header, it is my view that AI is an enormous avalanche of technical, cultural and digital change. We need to either get with the program, or get out of the way. If it is the latter, you will be consigning yourself to irrelevance.

This is not to imply it is all good.

AI does not have goals, it is not alive, it is just your toaster on steroids, so you can control it. AI is a tool, like any other, which can be used for good and bad, but indifference will lead to whacking your thumb with the hammer. The other thing about tools is that over time, they build equality and productivity.

However, the potential downsides are huge, the opportunity for evil have never been greater, but as the avalanche will not be stopped, you have to be in front of it to see and prepare for the pitfalls before you trip over them and are consumed.

Suck it up and enjoy the benefits!

Header cartoon credit: XKCD comic from the scary mind of Randall Munroe

Where can a manufacturing business get money for nothing?

Where can a manufacturing business get money for nothing?

Jun 13, 2023 | Management, Operations

 

There is a simple answer, but the money is just a bit harder to find.

It is tied up in your current operations, consumed by all manner of things that do not add value to a customer.

Machine down time, rework, waste, on line inventory, double handling, and a host of other things that get in the way of a steady, predictable and continuous flow through a factory.

Progress to completion through a production process can only go as fast as the slowest point in the process. Working around these choke points entails either building WIP inventory, or slowing the faster parts down to the speed of the slowest part of the process. There is no third internal option, but ‘outsourcing’ the slow bits is sometimes a productive choice.

Progressive removal of any impediment to a predictable even ‘flow’ and you will save money. However, even more importantly, you will free up capacity that will give you the opportunity to sell more from the same fixed cost base.

That is where the gold hides: Money for nothing.

Do you want it?

 

The rule of the niche

The rule of the niche

Jun 7, 2023 | Marketing, Small business, Strategy

 

 

Standard marketing advice in this day of homogeneity, and certainly my advice for SME’s, is to ‘find a niche and own it’.

Be the only one that competes in a market niche that you define.

The deeper, darker and more remote the niche the better, because when you get engagement there, you will be alone, you alone will be able to address the needs of those few who inhabit the niche with you.

Kevin Kelly’s now famous quip from his 2008 essay:  ‘to be successful you do  not need millions of followers, you need only a thousand true fans’ remains as accurate today as it was then.

A true fan is one who will buy anything you produce, they will drive 200kms to see you in a bookstore signing, then buy a bunch of signed books to give away to friends.

The challenge of course is to find those true fans, or more accurately, create the circumstances where they find you, and move through the now standard journey of Awareness, Knowledge, Liking, Preference, Conviction, and Purchase, to Advocacy.

Marketing plays a role in each step of the journey, but the starting point must be ‘macro’. If you start at the niche end of the cycle, too few will be able to find you. There needs to be a filtering process from the macro to the micro for there to be sufficient opportunity for those in the niche who may become true fans to find you in the first place.

It also pays to consider the paradox: There may be a niche in the market, but is there a market in the niche? For you as an SME, the niche may be ideal, but too small for a larger competitor to bother with, or even see.

,Niches can be global, local, and everything in between. To some they represent a ‘Blue Ocean’, a market without competitors. The question now is whether there is a market in the niche, wherever it hides, that will generate an ROI on the resources you allocate towards owning it.

 

 

 

5 ways marketers should respond to disruptive AI.

5 ways marketers should respond to disruptive AI.

May 30, 2023 | Change, Innovation, Marketing

In this new world of marketing, being reshaped by Artificial Intelligence, how should those concerned with the longevity and salience of their brands respond?

Innovate.

AI is really good at looking at what has happened in the past, but has yet to develop a crystal ball to tell the future. Marketers key responsibility is to tell the future, then shape the resource allocation decisions their enterprises make to best leverage what they think will happen. No future comes in a linear fashion, but AI can only reflect in a linear way, in response to the algorithms on which it was trained.

Strategise.

Strategy is a game of choice, where what you will not do is at least as important and often more so than what you will do. Again, these choices are based on what you think might happen, and as noted, these are never linear choices. Strategy in a world being homogenised by access to data will be more fundamentally important than ever.

Manage Communication structures.

Yesterday’s world was dominated by silos. The simple fact is that customers do not care about your silos, only how you deliver value to them. Enterprises have evolved hierarchical silo structures as the most efficient way to allocate and manage resources. That remained true until the mid-nineties, and most enterprises still have not got the memo. Today, even any hint of silos and barriers to communication internally, and more importantly with customers, will lead to a rapid and fiery death at the hands of data and its scribe, AI.

Remove marketing complexity.

The last 20 years have seen a multiplication and fragmentation of communication channels to customers and consumers, along with the inevitable silent middlemen and rent seekers who just siphon off dollars with little or no value add. The complexity of the choices and channels has created a situation where the analysis of the value of marketing expenditure is little short of a children’s guessing game. This is despite and partly because of because of the plethora of options and tools. The only way to address this complexity is to cut the gordian know and simplify, simplify, and then simplify some more. In other words, marketing focus driven by strategy. Easy to say, hard to do.

Generate attention.

The main game of being relevant in a huge homogeneous crowd is to first generate attention. You do that by being different, and being different with a big dose of energy being injected into the differences that are relevant to customers and consumers because they solve real problems, delivering them real value.

If you do all that, while leveraging the capabilities of AI, and digital systems generally, it will be your competitors that struggle, while you are ahead of the game.

Header cartoon credit: Tom Gauld

The one simple question all great leaders answer

The one simple question all great leaders answer

May 26, 2023 | Governance, Leadership

 

 

People will achieve all sorts of great outcomes when they know and buy into the reasons why the immediate actions should be taken.

‘Why?.

Imagine this scenario: Your boss comes to you to and tells you to drop what you are doing, and do this, just get it done, and moves on.

By contrast he/she comes to you are asks you to do that same thing, and explains why it needs to be done, why it is more important than the things you are currently engaged in, and how your contribution will make a difference to the outcome.

Which are you more likely to buy into?

Coincidently, it is the same question all our kids ask us as they are learning about the world. However, we seem willing to remove it from common conversation, or alternatively, answer the simple question that often has a complex answer with platitudes, evasion, or some other form of ‘non-answer’.