Our Entire Approach to AI Is Flawed

When we talk about AI, we typically focus on one metric: productivity. That metric has been used in every technology announcement since the beginning of the current tech age.

Going back to when I first became an external tech analyst and during the ramp-up to the launch of Windows 95, the argument was that it improved productivity so much that it would provide a return on investment (ROI) within a year of its purchase. It turned out that during the first year, the product broke so much it had an initial negative rather than positive impact on productivity.

AI’s ROI is potentially far worse, and ironically, much of our problem this century is not the lack of productivity or performance but poor decision support.

Last week, I attended a Computex prep event. As I watched the presentations, I noticed a familiar undercurrent of productivity. I remain concerned that if we improve speeds significantly but do not also improve the quality of the related decisions, we’ll be making mistakes at machine speeds, which may not be survivable.

Let’s talk about that this week, and we’ll close with my Product of the Week, which is the airline I just took to Taiwan. It was so much better than United, which I usually use for international trips, that I figured I’d point out why so many non-U.S. airlines are significantly better than U.S. carriers.

Productivity vs. Quality

I am ex-IBM. During my tenure there, I was one of a small group that went through IBM’s executive training program. One of the principles that was driven into all the employees was that quality mattered.

The most memorable class I took in this regard was not from IBM but from the Society of Competitive Intelligence Professionals (SCIP). Its focus was speed vs. direction. The instructor argued that most companies focus on speed first when it comes to new processes and technology.

He maintained that if you do not focus first on direction, you will end up going in the wrong direction at an ever-faster pace. If you do not first focus on defining the goal, speed will not help you. It will make things worse.

While at both IBM and Siemens as a competitive analyst, I had the annoying experience of providing decision support and having our recommendations not only ignored but actively fought and then not followed. It resulted in catastrophic losses and the failure of several groups I worked for.

The reason was that executives would rather appear to be right than actually be right. After a time, my unit was disbanded (a trend that cut across the industry) because executives didn’t like the embarrassment of being called on the carpet after a catastrophic failure for ignoring well-founded advice because their “gut” told them their predetermined direction must be better, yet repeatedly wasn’t.

After I stopped working inside companies and became an external analyst, I was amazed to find that my advice was more likely to be followed because executives didn’t feel my being right created a threat to their careers.

Decision-Making Challenges

From our personal to our professional lives, we can make decisions faster with AI, but the quality of those decisions is degrading. If you were to look back at Microsoft and Intel, two of the principal backers of the current AI technology wave, you would see that for much of their existence, particularly this century, the firms made bad decisions that cost them both one or more CEOs.

My old friend Steve Ballmer was cursed by bad decision after bad decision, which I still think was as much the result of the people or person supporting him rather than anything inherent to the man himself.

The guy was top of his class at Harvard and arguably the smartest person I’ve ever met. He is credited with the success of the Xbox. Still, after that, despite husbanding Microsoft’s financial performance well, he failed with the Zune, Microsoft Phone, and Yahoo, crippling Microsoft’s valuation and resulting in his being fired.

Along with a few other analysts, I was initially assigned to help him make better decisions. However, we were all sidelined almost immediately, even though I authored email after email, arguing that if he did not improve the quality of his decisions, he was going to get fired. Sadly, he just got angry with my attempts. I still think of his failure as my own, and it will haunt me for the rest of my life.

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