Strategic Agility in a World of Artificial Intelligence

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The FINANCIAL — Managers should focus on what makes them and their firms unique if they want to benefit from Artificial Intelligence (AI), according to London Business School Professor Julian Birkinshaw.

Revealing his predictions for the future of AI and its impact on the workplace right now, Professor Birkinshaw’s address focused on the social impact of tech.

AI is a very narrow form of intelligence, with each application optimised to one specific task, argued Professor Birkinshaw. So if the goal is hyper-efficiency in processing or logistics, AI can be very helpful. But when it comes to strategic planning, AI is too narrow in its thinking and it cannot offer a vision for a business or make long-term decisions.


Three tips for humans to rise above the limitations of AI:

Take a long-term view. Quoting strategy guru and former LBS professor Sumantra Ghoshal, Professor Birkinshaw said a key job of managers is to take resources from an immediately profitable area of the business and apply it to something that doesn’t generate instant monetary returns, such as research, training and development. This initially counterproductive behaviour – which AI cannot replicate – will, over the longer term, propel a firm to greater innovation, performance and profits.

Allow the unreasonable. Citing the oft-controversial founder of Tesla, Elon Musk, Professor Birkinshaw said firms needed to find room for ‘unreasonable’ people who create opportunities that change the world for good. AI isn’t a substitute for that, he said. Whatever his faults, Musk has transformed industries, according to Professor Birkinshaw.

Be contrarian. On the flip side of being ‘unreasonable’, Professor Birkinshaw said ‘robo-advisers’ in fund management were so reasonable that they risked duplicating each other’s strategies; each one conforming to an orthodox view of the market.

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