Navigating AI Transformation | OnBoard Board Management Software | Board Portal

Recognize That AI Already Has a Large Footprint

From sleep trackers to email spam blockers, artificial intelligence existed long before large language models (LLMs) such as ChatGPT came on the scene in early 2023. Driverless cars and other similar technologies have helped the technology grow at a faster rate than we’ve seen in recent memory.

AI Will Change Job Skills, Demands of Employees

Artificial intelligence will render some current tasks performed by humans obsolete, but it might not be the job types that you think. With a few exceptions, blue-collar, manual-labor jobs will be safer than white-collar jobs, but AI will aid decision-making and writing, and it won’t necessarily replace those roles.

STEM is Out; Time Management Is In

“Soft” skills such as time management, ability to prioritize, effective communication, and integrity will be more valued than STEM skills as AI continues to evolve and establish itself as a mainstream part of the workplace. Meanwhile, leaders will need to pivot from problem-solvers to problem-definers.

Webinar Recap: Artificial intelligence (AI) expert Tim Kapp explores the impact of AI and how boards can (and must) adapt to and leverage AI to drive organizational success.

In the coming year, there are a whole host of factors that will impact businesses. For board directors, AI is one factor that is top of mind. In fact, a recent survey from NACD found that one-third of board directors believe AI will be one of the biggest trends impacting the organization they serve in 2024. This puts AI on par with other major trends, including cybersecurity risk and the threat of economic recession.

AI will completely disrupt the world as we know it. As AI expert Tim Kapp put it, “[AI] is going to dwarf [the impact of] any other prior innovation based on the trends we’re seeing now.” Boards must understand the opportunities and the risks for the organizations they serve.

Kapp joined us for a recent ATLAS webinar to share insights into how boards can adapt to AI and leverage its capabilities to drive organizational success. He discussed:

The far-reaching implications of AI
Strategies for embracing AI-driven change
Leadership practices for guiding your organization through an era of change

Here, we share some of the top takeaways from this engaging session.

AI is Already All Around Us – and It’s Increasingly Powerful

There’s a lot of talk about the “rise of AI.” But Kapp pointed out, “You already use AI constantly. I counted it up – 18 instances of AI being used in my life before 7 a.m.”

Kapp cited examples including sleep trackers, tools preventing email spam, and auto navigation in the car. “Those are all forms of AI,” he said. “It surrounds us. We use it far more than people realize already.”

Of course, 2023 was the year of large language models (LLMs), including ChatGPT. ChatGPT, in particular, acquired 1 million users in five days. In comparison, Netflix took three and-a-half years to reach this milestone.

Already, AI is powerful, and its impact is increasing every day. Kapp shared several examples to illustrate this point, including:

A non-specialized ChatGPT bot correctly diagnosed patients’ symptoms at the same accuracy rate as a general practitioner.
Software developers completing coding tasks twice as fast with generative AI
Driverless cars being nearly seven times less likely than human drivers to be involved in a crash resulting in an injury

2024 Will Be the Year of the Agent

2023 was the year of LLMs, like ChatGPT and others. Kapp predicts that “2024 will be the year of the agent.” But what exactly does that mean?

Large language models can do very specific tasks – such as writing code or drafting a press release. But a human must be actively involved. “With LLMs, we have to babysit them,” said Kapp. “We have to have a human constantly looking at them.”

Agents are the next level. “Agents will connect, plan, coordinate, and organize entire processes,” he said. “That changes things significantly.”

The rise of agents will have a huge impact. For example, AI will power 80 to 95% of all customer interactions, including live conversations. In addition, the role of truck driver – which is the most common job in 29 U.S. states – may become extinct.

AI is a Huge Deal

While some professionals recognize the potential impact of AI, others perceive it as nothing more than a passing trend. So, just how big is AI? According to Kapp, “it’s enormous.”

Kapp shared several data points to illustrate this fact.

AI could automate 40% of activities in the average workday.
80% of entry-level tasks will be fully automated.
AI will help organizations lower operational costs by an average of 30%

In-Demand Job Skills are Changing Quickly

In this “age of uncertainty,” the list of in-demand job skills is shifting significantly – and quickly. In the recent past, STEM proficiency and development were some of the most in-demand skills. That’s no longer the case.

“We’ve been promoting STEM and development as some of the primary job skills we want,” said Kapp. “But look how rapidly that has dropped in the past few years.”

Increasingly, skills that support speed and trust are at a premium. Those skills include:

Time management
Ability to prioritize
Effective communication
Integrity

“We’re going into an age of uncertainty when speed and trust are the primary human skills I think we will need,” said Kapp. “Those skills engender speed and trust.”

Disruption Requires a New Kind of Leader

AI is disrupting the business world. A disruption of this magnitude requires a new kind of leader.

Organizations must identify leaders who don’t think of resources as the primary driver of success. “Whenever there is such a huge change in economic productivity, resources matter less than riding the wave,” said Kapp. “Stop thinking like a swimmer and start thinking like a surfer. If you can find the right place to jump on this wave, it’ll push you. A tiny company can scare a big company.”

Successful leaders must also focus on building strategy and capabilities. “AI doesn’t replace strategy,” explained Kapp. “It supports development of more effective capabilities.”

Kapp also explained that the skills and capabilities of leaders must shift. For example, leaders must transition from problem-solving to problem definition. “Agents are going to be better at problem-solving than us in the next five years,” he said. In addition, speed and capability will be the “critical leadership capabilities.”

AI Introduces New Risks and Challenges

AI has the potential to transform everything we know about business. Already, organizations are tapping into this technology to do things smarter and faster. However, AI isn’t without risk.

In one recent example, a finance worker paid out $25 million after a video call with a deepfake chief financial officer. Initial suspicions from a dubious email were dismissed after a realistic, AI-powered video call.

In addition, AI increases cybersecurity risk. “We may have just poured gasoline on a fire that was already out of control,” said Kapp. “AI has enabled developers to develop faster. That also means we’ve enabled cybercriminals to launch criminal activity faster.”

Boards must be aware of the risks and challenges of AI and work to mitigate these risks. In fact, Kapp feels that managing that risk is “one of your primary functions as a board.”

Now is the Time for Boards to Take Action

Boards can’t afford to ignore AI. This technology will transform the way we do business, and now is the time to actively navigate this transformation.

But how can boards get started? During the webinar, Kapp shared several recommendations for board members.

Develop an AI strategy. This should support the company’s overall business strategy and should focus on building capabilities. The strategy should include guidelines for responsible AI and a plan for managing risk.
Implement training programs for employees. Training programs should cover how to recognize and defend against AI-generated social engineering threats.
Foster AI literacy for informed decision-making. Understanding the implications of AI is key to making informed decisions. “Your everyday leaders need to be AI-aware,” said Kapp.
Conduct comprehensive AI risk audits. This will help identify potential risks related to data privacy, security, bias, transparency, and compliance with national, international, and local regulations.
Prepare a detailed crisis management plan. This plan will outline the steps to be taken in the event of AI-related issues including data breaches, ethical concerns, or legal disputes. “There are going to be data breaches. You have to have a plan in place,” said Kapp.
Engage with stakeholders. This should include customers, employees, and regulators. By doing so, you’ll understand their concerns and expectations related to AI.
Partner with the experts. AI experts, legal counsel, or consultants can help you stay informed with emerging AI risks and mitigation strategies. Kapp also encouraged attendees to join the National Artificial Intelligence & Cybersecurity ISAO (NAIC-ISAO).

Boards of directors hold a lot of responsibility. Yet, boards often aren’t as effective as they could be. Are you looking for guidance and tips on how to maximize the effectiveness of your board? Save your seat for our next session focused on boosting board effectiveness, featuring James C. Galvin, author, managing partner of the Alliance for Board Effectiveness, and President at Galvin & Associates.

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