CXO Research Insights + Vision© Newsletter; Feb. 2022: AI Hype Time Capsules, SME AI Strategy, Supply Chain GeoPolitical Risks
Forward-looking ideas from leading research for executives
February 2022’s Issue of CXO Research Insights + Vision© Newsletter offers executives actionable insights for three short one+ minute topics:
- 2022 AI: Don’t invest in projects that require 30 years to succeed! – provides SME advice and direction on today’s AI hype in emerging solutions for CXOs; Executive focus must be on a few proven AI opportunities achievable within three years and avoid AI wishes that will take 30 years to mature.
- CXO 2022 AI Innovation Strategy – SME’s ML Playbook for Fewer Risks – grounds SME corporate boards and CXO understanding beyond AI hype buzzwords to reset an Innovation AI Strategies are applying proven Machine Learning apps/platforms/models. Reshape AI-applied corporate intent to execution with a workforce AI culture.
- 2022 CXO Supply Chain Management GeoPolicial Risks – it’s not a technology way out, but CXOs must plan supply chain geopolitical dynamics risks for the rough road forward.
Here is what you need to know.
1. 2022 AI: Don’t invest in projects that require 30 years to succeed!
By Tom Austin
Most writeups of general AI trends – like the ones you see in advertisements, press releases, and thought leadership whitepapers – are great for lining the bottoms of bird cages because they ignore significant differences in enterprise size, industries, essential business processes, and useability.
The ringers urge you to learn from and emulate the AI world’s megaliths – Amazon, Microsoft, Google, Facebook, Nvidia, IBM, Alibaba, Baidu, Wipro, and Infosys. The megaliths operate in a different universe. Avoid their urgings. The megaliths have more data than you ever will and research budgets that dwarf the GDPs of many mid-size countries. Don’t try to emulate them.
- Ignore most of the clamor and press over AI emerging technology research breakthroughs. Yes, they (or some of them) will matter but not for you, not yet but plan for ones that fit your business over the next three years. Artificial General Intelligence (AGI) – super-robots replacing humans and fully autonomous driving – Level 5 – without a human in the loop, file them and others away, and reopen the time capsule 30+ years from now.
- There are significant differences in AI adoption by industry (I wrote about it in “Hiring data says most firms are not building AI-development teams.”). The biggest firms, such as Big Tech and mega-corporations, are investing far more in AI, especially Machine Learning with Deep Learning. These organizations have the deep financial pockets to develop massive big data sets for novel consumer, marketing, and e-commerce solutions. Mid-size and smaller firms invest far less than the averages suggest, making sense.
- Find peers in your industry similar to you and operating in the same geography. Track where they’re going with AI. Get specific: Who is significantly enhancing critical business processes with tools that exploit AI? Who tried and failed?
- Don’t design your own AI models. The odds are that you should leave AI model design to researchers in a different line of business than yours. Focus on proven commercial AI-based apps, models, and platforms for your business.
- Drowning in a sea of big data won’t accomplish anything of value. SMEs should seek out opportunities to use small data instead. Focus on the minimum amount of data necessary to achieve small but significant process improvements. (See Andrew Ng’s interview with IEEE Spectrum and consider how you might apply Stessa Cohen’s insights on small but significant process improvements in your industry.)
2. CXO 2022 AI Innovation Strategy – SME’s ML Playbook for Fewer Risks
By Steve Hawald
Everyday Small-Medium-Enterprise (SMEs) Boards, CEO and CXO conversations, and most media AI over-hyped articles continually apply AI to vague or misused terms such as “AI,” “AI/ML,” “AI Algorithms,” “Deep Learning,” others.
It’s no wonder that the Corporate Board, CEO, and CXOs are cross-talking and not understanding the 3-year artificial intelligence (AI) domain strategic intent and goals they expect to deliver.
“Machine learning is changing, or will change, every industry, and leaders need to understand the basic principles, the potential, and the limitations.” — Professor Aleksander Madry, MIT, Computer Science.
Let’s Fix It! Your executives must be just well-grounded in using the AI algorithmic segment of Machine Learning (ML).
Here’s what you need to know for the corporate board and CXO AI Innovation Strategy for minimizing risks.
- Evaluate/Reset/Promote Board and Corporate AI-based Innovation Strategy with a focus on attracting savvy executives and hard-to-find talent
- Reset Board and CXO Governance Compliance with controls for AI-based risk avoidance for lawsuit exposures
- Craft Ecosystem using Machine Learning (ML) and Operations (MLOps) apps/models/platforms to sustain your AI-based programs
- Leverage CIO with CHRO for comprehensive AI-based Training Playbooks supporting the board and enterprise
- Reshape and Rollout CXOs and Workforce Innovation AI-based Strategy and Culture.
How does it work?
SMEs’ leadership and enterprise culture look to balance today’s limited and practical AI-based solutions/use cases with risks/rewards. In most cases, corporations applied AI in a narrow segment to leverage computer vision, image, voice, and text for advanced Natural Language Processing (NLP) and Machine Learning (ML) algorithm types with Deep Learning (DL). Use proven commercial models/platforms – leave it to the experts for support.
Reset Innovation AI-Applied Strategy
Innovation AI strategy playbook gets it right and centers around augmenting humans to enable creativity with humans in the loop. It allows the use of any complex data – images, music, videos, voice, text. It is more robust and advanced than all the AI’s ML strategies. Be sure to showcase it externally to draw savvy executives and talent into your workforce!
The Corporation Board and CXOs should consider resetting and aligning corporate playbooks for a 3-year Innovation AI-Applied Strategy using proven solutions with an annual refresh.
Refresh Corporation Board and CXO AI-Governance Controls
Every week, there is another significate corporate lawsuit from government regulators, states, class actions, and citizens for harmful unintended consequences or gross negligence. These business exposures are a range of AI-based ML with Deep Learning to abusive data privacy.
Your governance oversight playbooks must ensure your AI innovation use cases apply proven and tested verification for:
• Discrimination, Diversification, Inclusion Teams with Peer Reviews
• Environmental-Sustainability-Governance (ESG) for auditable-based SEC reporting, especially 10Q/10Ks.
Not only do you need to apply current — and prepare for developing — AI regulations in the EU. Today’s EU’s AI draft version must change for a simplified, broad definition of AI to be helpful and add stronger protections to citizens. Furthermore, global AI-based laws are evolving faster. Now China’s AI regs go live on March 1, 2022, rollout. It has the most comprehensive AI regs for compliance. The US can learn from both AI regs efforts.
“The US is woefully behind in this (AI regulations) space, and it might need to take a better degree of leadership,” — Russell Wald, Stanford Univerisity, Director Institute for Human-Centered AI.
Notably, the US AI-based regulations are in political discord/disarray with lobbyists’ funding and could be dead last on the global leadership stage.
Create Your AI Ecosystem using Small Datasets
SME requires leveraging your tailored AI ecosystem. Its consists of proven AI apps/tools, platforms, and critical partnerships. Your ecosystem partners can include commercial firms, governments, universities, and significant data sources. Only Big Tech, mega-corporations, and large nation-states can create massive datasets to craft AI solutions for consumers/citizens. CXOs should rethink and apply specialized smaller datasets. Notably, there are new platforms for easy data cleaning/tagging tools for their ML. SMEs should use ML algorithms with cost-effective ML Operations (MLOps) applications. For example, Stanford’s Andrew Ng’s Landing AI data-centric MLOPs platform for industrial automation and manufacturing.
CIO Helps Supports Board’s Intents and CXO Teams AI-Applied Playbooks
With CHRO support, CIOs drive AI jumpstart workshops for both board and CXO executive training on the ML algorithm domain related to your AI organizational vision and goals. The CHRO effort can be shaped for the Corporate Board to set a common AI literacy language. It must clarify its investment portfolio AI intent for CXOs, especially the CIO, and expected business expectations/outcomes/ROI.
“(AI) an extraordinary tool – it is risky if humans misuse, overuse, and perhaps most importantly, underuse it” – Professor Luciano Floridi, University of Oxford, Philosophy/Ethics and CS/AI Research.
Lastly, the CRHO aligns the CXO executive AI-based training workshops with proven AI solutions for a refreshed enterprise-wide AI-enabled workforce culture, playbook, and rollout.
The corporate board must articulate, direct and enable strategic AI intent and defend/protect the entity’s assets from its risks. CXOs must lead, manage playbooks, and execute the board’s AI intent and goals for success. Don’t forget to include AI-Edge Computing opportunities in your innovation playbooks.
3. 2022 CXO Supply Chain Management Geopolitical Risks
By Dan Miklovic
The discourse in manufacturing and other heavy industries is about “how to learn from Covid and operate in the new normal.” The supposition is that now that the Omicron variant is waning, vaccination rates are leveling off at an acceptable level. Most global governments are dropping restrictions, and the supply chain issues companies have been fighting will start to trend back towards pre-pandemic models. However, there is the recognition that it will never be the same as before 2020.
Don’t be lulled into thinking that recent investments in technology that got you through the worst of the pandemic are going to suffice. Everything from the investigation into the US Capitol incident on January 6, 2021, the upcoming US Supreme Court decisions on several issues, the replacement of Justice Breyer, and numerous state and local issues have the potential to disrupt supply chains dramatically. Over the last several weeks, look at impactful events such as the Ottawa Occupation and US-CANADA Ambassador Bridge shutdown, the war in Ukraine, and hyper-polar politicization emerging over many unplanned incidents.
Several key supply chain upsets are possible:
- Add in winter weather, and it could be even worse. With politicians urging trade blockades, expect more frequent disruptions such as the one between Detroit and Windsor, which cost the auto industry around $1 Billion in one week. They are all but inevitable with an “us vs. them” approach to governing.
- Europe has the most significant economic effect as Russian natural gas supplies through Ukraine will become unstable. Transportation costs are likely to skyrocket when Russia invades Ukraine. The threat of war has driven the gas price to its highest level in eight years. Remember, natural gas is the go-to energy for more than heating. It is a significant source of fuel for electricity generation, a raw material for many plastics and other chemicals, and a part of the electronic and pharmaceutical supply chains.
- Hyper-polarization of brands based on support for socio-political positions is increasing. Your regular suppliers may take socio-political positions that do not align with yours and necessitate finding new sources. Social media makes it challenging to hide an association with a business partner that negates your positioning.
Supply Chain Planning Forward
As the mid-term elections in the US are coming up in ten months, the 2024 presidential election on the horizon and future Covid variants a complete unknown, supply chain management isn’t going to be smooth sailing. If you thought 2020 & 2021 were brutal, expect 2022 and the next three or four years to worsen. See my most recent Analyst Syndicate Research note for insights – “Managing the Supply Stream Is Going to Become a Class V Whitewater Experience.”
Copyright @ 2022, STEVE HAWALD CEO CIO ADVISORY LLC and CXO Research Insights + Vision© Newsletter©. DISCLAIMER: These articles are entirely the author’s opinion without financial payments. Each analyst does not hold any engagements and investments regarding these research notes. The peer review was by Tom Austin.