How digital technologies change the future of leadership
State-of-the-art technologies such as blockchain, artificial intelligence (AI) and cyber security are becoming commonplace. But are management professionals adequately prepared to embrace them?
China's and America's economies will benefit the most from the use of artificial intelligence. The EU is eager to keep up: Over the next two years, some 20 billion euro will be invested in making AI better. According to a recent study by the Boston Consulting Group, Austria alone may see its GDP increase by approximately 1.2 percent thanks to self-learning and autonomously operating machines. For quite some time, the question has no longer been whether the most important digital technologies will change business but how fast change is going to happen. Apart from AI, blockchain technology and cyber security, in particular, will fundamentally transform day-to-day business operations, structures and modern forms of collaboration.
While management professionals are up to speed when it comes to dealing with strategic issues, for instance, many CEOs do not yet give this technological development the attention it ought to receive.
Prof. Barbara Stöttinger
Reading financial statements and developing complex business models are undoubtedly finger exercises for CEOs. They know how to expertly accomplish these tasks, which is not surprising considering that we are talking about the most fundamental areas of business management. But when it comes to new technologies such as blockchain, cyber security or AI, many CEOs are having a hard time because the repercussions on business in general and on their companies in particular are as yet unclear and difficult to predict. So, they have indeed some catching up to do.
Topics like artificial intelligence and blockchain have long ceased to be of enormous relevance to only certain industries or specific parts of companies such as IT divisions. Today, top managers in many different lines of business need to give them serious consideration as they have become key pillars of change. Management professionals do not have to understand all the technical intricacies of blockchain technology, nor are they required to develop AI algorithms. But they need to bring a basic understanding of these things to the job and must be willing to proactively explore possible applications in the environments they are working in; otherwise, they will not be able to achieve executive success. “That is not to say, however, that they should put machines before people. Bringing together the strengths of humans and machines provides a particularly fertile ground for change and innovation,” explains Prof. Stöttinger.
Hence, employees need to be able (and motivated) to manage data, take advantage of digital tools and keep in mind potential risks associated with their use (think, for instance, of data protection requirements). But all of this can happen only if executives proactively concern themselves with these technologies.
A short while ago, AI expert Anastassia Lauterbach, who consults businesses around the globe on this topic and has provided plenty of material for discussion with her new book called “The Artificial Intelligence Imperative”, payed a visit to the WU Executive Academy. According to her, all organizations urgently need a long-term AI strategy, given that the requirements for skills are changing as a result of automation. She says AI is just a technology, adding that businesses must address operational questions before thinking in greater detail about what they intend to achieve by harnessing its potential. That is the key point: AI, blockchain technology and cyber security are no panaceas but technological tools that will be vitally important for companies. And top-level management professionals have to understand, manage and use these tools properly.
Artificial intelligence: As a result of the enormous wealth of data available today, computers can, to some extent, think and learn like humans already. Currently, this ability is being harnessed and used in many different settings: in medicine, in logistics, in the automotive industry or in the context of speech recognition. Machines cannot (yet) outperform human intelligence, but the rapid advances in AI will open up many new applications, for instance when it comes to investment, production or the analysis of the needs and wants of customers.
Blockchain: Blockchain technology is to make a wide variety of transactions easier, faster and, most importantly, safer. The data stored in the blockchain cannot be altered, and no intermediaries, such as banks, are needed to carry out transactions. The sender and the recipient are always clearly authenticated. Hence, the technology has huge potential, for instance in the context of capital transactions (cryptocurrencies), smart contracts or the energy sector.
Cyber security: Constantly networked devices, self-thinking machines and direct transactions—all of this requires a significantly higher degree of security than the current precautions can provide. In modern companies, cyber security will thus not be a side effect but a concern of utmost importance—technically, financially and in terms of organization.
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