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THE JOURNAL OF PEOPLE + STRATEGY

Neal Sample, Brad Winn

Meet the New Boss: Should You Add an AI-Powered Program to the Leadership Team? | People + Strategy | Winter 202

January 8, 2024

This People + Strategy article discusses the advantages, disadvantages, and limitations of having a virtual executive and AI-powered CEOs.

By Neal Sample and Brad Winn

In late 2022, NetDragon Websoft, a Chinese video game firm, became the first known company to appoint an artificial intelligence bot as its CEO. The company named the AI program “Ms. Tang Yu,” and its leaders now use the AI tool to support the decision-making for its daily operations. Last year, the CEO of Mobeon, a California-based streaming company, made waves by stepping aside and handing the company’s strategic and operational reins to a ChatGPT-based AI tool.

While these groundbreaking examples don’t signify a trend, these first AI CEOs do symbolize a significant evolution in the sphere of leadership, and they spark broad new questions for the C-suite, HR executives and boards of directors.

 

Virtual Executives

When attracting talent, we typically want to recruit the smartest person possible who fits the position and compliments the competencies of the existing team. As we careen into a futuristic world of generative AI, does that person need to be an actual person?

The competencies and attributes required for virtual executives to thrive—and how HR can leverage and foster these capabilities within its talent pools—are novel considerations. As these virtual executives take their “seats” at the leadership table, HR assumes the additional role of change orchestrator, tasked with deftly navigating the innate uncertainties and resistance often associated with these transformative shifts. Addressing concerns, nurturing acceptance and cultivating a culture of collaboration are paramount responsibilities.

As the prevalence of AI and virtual executives grows, ethical and legal considerations loom large on the HR horizon, encompassing issues such as algorithmic bias, accountability and transparency in decision-making. The formulation of robust guidelines and frameworks becomes essential to ensure ethical governance in this emerging domain.

The few groundbreaking examples of AI-based CEOs don’t signify a trend. But they do symbolize a significant evolution in the sphere of leadership, and they spark broad new questions for the C-suite, HR executives and boards of directors.

In tandem, HR professionals must grapple with the acquisition and retention of talent well-versed in the intricacies of generative AI and technology, supporting the endeavors of virtual executives across industries. HR’s role also extends to safeguarding the job satisfaction of employees impacted by AI-led decisions, necessitating agile adaptation of policies to ensure the continued welfare of the workforce.

In essence, the rise of virtual executives heralds a paradigm shift in leadership, and HR professionals are at the forefront of navigating this uncharted territory.

 

How Generative AI Can Power an ‘AI-CEO’

Generative AI refers to a category of artificial intelligence systems that have the capability to generate new content or data that is similar to, but not directly copied from, existing data. These AI systems use techniques such as deep learning and neural networks to analyze patterns and structures within large datasets and then produce original content based on what they’ve learned.

An AI tool that assumes the role of virtual executive should be a leader that leverages data-driven decision-making and continuous learning to guide an organization strategically. Like any good leader, it should also communicate effectively, adhere to ethical principles and learn to scale its capabilities. This AI-driven executive represents a fusion of advanced technology and established leadership acumen, shaping the future of organizational leadership.

The virtual leader can be prompted with questions and provide seemingly thoughtful answers nearly instantaneously. When you look under the hood of a generative AI (e.g., GPT-3), it looks like a highly sophisticated text generator.

Here’s a slightly deeper view into what happens when you ask your virtual executive a question, as compared to your human executive colleague.

 

STEP 1

Human CEO: Perception and comprehension.

The brain processes the sensory input and activates to decode the question’s meaning.

Virtual executive: Input analysis.

AI analyzes the question leveraging a complex system of algorithms to extract meaning and context.

 

STEP 2

Human CEO: Memory retrieval.

The brain searches long-term memories and retrieves relevant information based on strength of memories.

Virtual executive: Language generation.

AI considers words sequentially based on patterns it has learned from extensive pre-training.

 

STEP 3

Human CEO: Information integration. The brain integrates and assesses the relevance of information using critical thinking and pattern recognition.

Virtual executive: Probability-based selection. The AI tool assigns word probabilities and selects the highest probability of random words to enhance creativity.

 

STEP 4

Human CEO: Decision-making and reasoning.

The brain uses higher-order cognition in the prefrontal cortex to evaluate various perspectives.

Virtual executive: Sequential composition.

AI builds an answer iteratively until it reaches a predefined length or designated endpoint.

 

STEP 5

Human CEO: Language production.

The brain activates language production centers to articulate responses and convey thoughts accurately.

Virtual executive: Post-processing and quality assurance.

AI engages in post-processing to correct grammar or improve coherence.

 

It’s essential to keep in mind that while generative AI can produce impressive responses, it doesn’t possess true comprehension. Its responses are generated based on patterns from training data, and it may produce plausible but incorrect answers.

For that reason, the process of getting answers from virtual executives will have both significant advantages and disadvantages when compared with human executives. Given this, when should we turn to a virtual executive for answers?

 

Characteristics of the Virtual Executive

The integration of artificial intelligence into corporate structures has become increasingly prevalent in different forms, from interactive voice response (IVR) that answers customer calls to robotic process automation (RPA) eliminating manual labor.

Virtual executives (VEs) may be a humorous nonstarter idea for most companies (for now). But as organizations strive to remain competitive and adaptable, inviting a VE onto the senior leadership team may be the strategic disruption they need.

Before acting on this trend, it’s important to understand the potential strengths and weaknesses of incorporating a virtual member into a senior leadership team. That includes examining the implications for everything from decision-making and innovation to ethics and potential liabilities. (See Strengths and Weaknesses box at left).

The future of leadership may indeed involve a blend of human and artificial intelligence, where each complements the other to achieve organizational goals. The prospect of inviting virtual execs onto the senior leadership team of a large corporation is a fascinating and complex one. Ultimately, the decision to integrate an AI decision-maker into leadership requires careful consideration of the organization’s specific needs, industry and values.

To harness the strengths of a virtual executive effectively while mitigating its weaknesses, organizations will need to strike a balance between human and AI leadership, combining the strengths of both to drive innovation, ethical decision-making and key business outcomes.

 

What about a Virtual HR Executive?

As custodians of talent management, employee well-being and business results, HR professionals continually seek innovative ways to enhance their impact. One intriguing thought experiment is to invite an AI executive onto the senior leadership team specifically to help run HR. Here are some of the potential pros and cons of having a virtual HR executive leader, and how that may apply to talent management, ethics, compliance, employee engagement and more.

STRENGTHS

Unbiased talent assessment.

HRVEs can be trained to reduce human biases from hiring and promotion decisions and help create a more diverse and inclusive workforce.

Efficient training.

HRVEs can streamline the onboarding and training processes for new hires by providing instant access to company policies, training materials and FAQs.

Data-driven employee engagement.

HRVEs can analyze engagement surveys on a large scale, providing data-driven insights into employee satisfaction and suggestions.

Compliance.

HRVEs can assist in ensuring that employees adhere to company policies and compliance standards. It can monitor policy-related queries and provide guidance.

 

WEAKNESSES

Lack of empathy.

HRVEs are poor at dealing with sensitive issues. The absence of empathy in a virtual executive could hinder the resolution of employee concerns and conflicts.

Ethical considerations.

HRVEs have access to employee privacy and data security. Ensuring that an HRVE respects and safeguards sensitive employee information is paramount.

Employee resistance.

Employees may be wary of interacting with an AI-driven HRVE. Managing employee perceptions and addressing concerns would be challenging.

Limitations in handling nonstandard cases.

HRVEs excel at handling routine and standardized queries but may struggle with unique cases that require creative problem-solving.

 

The future prospect of a virtual executive on the senior HR leadership team is both promising and challenging. VEs offer undeniable strengths, such as unbiased talent assessment, efficient onboarding and training and 24/7 employee support. That said, they also come with notable weaknesses, including a lack of empathy, ethical considerations and potential employee resistance.

For HR professionals, the decision to integrate VEs into their teams should be driven by a clear understanding of the organization’s needs and HR’s specific role in fostering organizational success. To harness the strengths of a VE effectively while mitigating its weaknesses, HR leaders will need to strike a balance between the use of AI-driven solutions and human judgment.

 

Summary

As generative AI technology continues to advance, the role of AI in leadership teams will become more compelling, offering a new capacity to navigate organizational challenges. The future of executive leadership itself is likely to involve a synergy between technology and human insight, where virtual executives complement human professionals in creating a more inclusive, efficient and compliant work environment.

As AI evolves, leaders will have a unique opportunity to leverage AI “peers” as a powerful tool for enhancing their distinctive strategic contributions to the success of their organizations.

 

Neal Sample is a tech-focused business enhancer who has served as a board director, CIO, startup advisor and executive coach. He is currently focused on AI and its impact on innovation, leadership and productivity. Contact: nsample@gmail.com.

Brad Winn is a professor of leadership and strategy in the Huntsman School of Business and executive MBA director at Utah State University. He serves as senior editor for People + Strategy and is principal of Winn Consulting Solutions. Contact: brad.winn@usu.edu.

 

This article was originally published in the Winter 2024 issue of The Journal of People + Strategy, where the ExCo Group’s CEO, David Reimer, and senior managing director, Adam Bryant, are editors.

Click here to download the full winter 2024 issue.