Brian Evergreen is the author of the upcoming book Autonomous Transformation: Creating a More Human Future in the Era of Artificial Intelligence which will be published in August.
Evergreen is best known for his work advising Fortune 500 executives on artificial intelligence strategy. Building on his experiences working at Accenture, Amazon Web Services, and Microsoft, he guest lectures at Purdue University and the Kellogg School of Management and is a Senior Fellow in the Economy, Strategy, and Finance Center of The Conference Board. He is the founder of The Profitable Good Company, a leadership advisory company that partners with and equips leaders to create a more human future in the era of artificial intelligence. Evergreen recently spoke to The Innovator about his new book and how leaders can shift their leadership methodologies and organizational culture to harness the economic and societal potential of AI and adjacent advanced technologies to achieve Profitable Good.
Q: What was the inspiration for your book and could you tell us why you chose that title?
BE: In Web 2.0, no one knew what the impact would be on people and society. I think it is fair to say it has been a net negative. With the next wave of transformation, corporate leaders want to do better, and societal impact is top of mind. They want to certify that their products are 100% ethically sourced and to be able to guarantee there is no child labor in their supply chain. The question is how do we use powerful tools like AI and blockchain to do that? Time and time again, senior executives –many of whom work for the most valuable companies and have immense resources–dream up all the things that would have a positive impact on their people, the communities in which they operate, and their customers. Almost without exception those initiatives do not get funded. Many leaders are passionate about using technology and the resources at their disposal to address large systemic societal problems, but it isn’t working. The very systems that make up our organizations, and our system of leadership need to change, and it’s up to leaders to redesign and rebuild those systems from the ground up.
Q: In Autonomous Transformation, you emphasize an imperative for the future of all organizations to replace the entrenched way of doing business inherited from the Industrial Revolution. How does that work and just how would it transform an organization’s products, services, processes, and culture?
BE: The way companies work today is mechanistic, like a large machine. This is something we inherited from the Industrial Revolution, and not only is it a dehumanized way of working, but it is holding us back. We are now approaching a paradigm shift and need to rethink the day-to-day practices and the presuppositions we hold as leaders and managers that are inherently mechanistic as opposed to social or human-centered if we’re going to re-humanize work and, counterintuitively, get more value out of machines.
Q: This sounds great in theory, but companies are still very focused on making their next quarter. How do you change that?
BE: Shareholder primacy and focusing on quarterly results naturally incentives leaders to make small improvements and to focus on problem solving, which is the craft of getting rid of what you don’t want but doesn’t necessary get you what you want. If the measure for choosing a path is that it needs to be proven already, then your company will have no differentiation, because the only way a new technology can be a sure bet for you is if other organizations already took the bet and it paid off. Breakthrough innovation requires a new system of measurement and investment criteria.
Q: What would that look like?
BE: Everyone knows the story of Blockbuster, which had many opportunities to acquire Netflix and didn’t do it. In 2010 it filed for bankruptcy protection. I think there is one store left in the whole world. I had the opportunity to interview someone who worked as an outside consultant for Blockbuster and was responsible for piloting a streaming service, called Blockbuster On Demand, in Texas in 1995- 12 years before Netflix introduced streaming. The pilot went extremely well, and when he returned home and got a phone call from the Senior Vice President, he anticipated celebration and requests for how quickly he could scale it. Instead, the executive told him he needed to shut it down because the service would threaten the 12% of Blockbuster’s revenues that came from late fees. You can bet when this senior vice president had his quarterly performance review, he highlighted that he had “protected 12% of revenue this year.” When Blockchain later went bust, he didn’t have to account for his decision.
The point is that the choices people make are often the safest bets so they can get their next promotion, but the options left on the table- the risks not taken- are not recorded anywhere. We not only need a new system of leadership we need to update our accounting to include decisions and record the other options. Then we need to check in half a year later and review the decisions based on the data we had at the time. This will be far more representative of the portrait of a leader than only recording the risks taken, enabling us to determine when individual leaders are risk averse and whether they have left money on the table. This is an example of the difference between a mechanistic versus a social approach. In a social system you need to understand the people who make your company as opposed to regarding people as cogs in a machine.
Q: You contend that the economic potential of AI and its adjacent technologies can be harnessed to achieve Profitable Good. Please explain.
BE: People make the mistake of conflating profit with greed. Greed is obtaining money at any cost whereas altruism is doing good at any cost. In the middle you have most corporate leaders today who are just trying to make an honest living and would do good if they could. So how do we incorporate profitable good into the system? One example is creating an autonomous AI agent that optimizes HVAC systems to generate 17% annual reduction of carbon emissions. If every commercial building in the world were lowered by 17% carbon emissions, it would mean a 2% global reduction in carbon emissions. The technology company that built the autonomous agent benefits from selling the solution, organizations that implement the solution benefit from lowering their energy bill, and there is a material positive impact on society at large. These are the kinds of projects that can get sign-off because they allow companies to do well by doing good.
Q: What would you most like C-suite executives and senior managers to take away from your book?
BE: People come to me and say this human stuff is nice but how do I capture the economic potential of AI? The two are in fact intertwined. The best example of that is the Microsoft story. [Former Microsoft CEO] Steve Balmer was a product of the prevalent 20th century system of leadership. He ruled with an iron fist. [Current CEO] Satya Nadella instead talks about things like empathy and social traits,or shifting Microsoft from a know-it-all culture to a learn-it-all culture. His leadership team worked with neuroscientists and social scientists when redesigning their leadership principles. He implemented a new business strategy, a new people strategy, and a new tech strategy and the three were intertwined from the start. The organization is doing better than it’s ever done because its employees are being treated like people.
Q: What advice do you have for leaders?
BE: The first question I ask every leader I work with is “What is your vision?” Next, what is your strategy to make achieving that vision inevitable? In this era of artificial intelligence, creating and executing an AI strategy according to the leadership systems we’ve inherited from the Industrial Revolution is a recipe for failure. Your business, technology, and people strategies are interdependent, and should be developed as such. If they were not, then it’s time to refresh those strategies cohesively and at the top level of the organization. This is how organizations can move into an unprecedented era of harnessing the economic and societal potential of these technologies.
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