The Automated CEO: Is AI the Superior Manager?

It’s thanks to the US company OpenAI’s tool ChatGPT, which is owned by, among others, Microsoft, that the possibilities afforded by artificial intelligence have become palpable also for those who are definitely not digital experts – and it also gives us an idea of what’s yet to come in this sphere. As mounting evidence of the extremely advanced development of AI is making headlines, some people find themselves gripped by a sense of panic: no wonder, considering the prediction that this technology will make millions of jobs around the world redundant. And there’s no doubt that some fields of work, particularly those characterized by repetitive tasks that algorithms and machines can easily handle, are bound to change considerably through the use of AI.

But there seems to be an exception to this overall development: the work of managers and company leaders seem unaffected by the advance of machine learning at first glance. Is that really the whole truth, though?

Reporting to the CEO Bot?

At NetDragon Websoft, a Hong Kong-based online game company, an AI robot was recently appointed to replace the human CEO of a subsidiary. The CEO bot is now making the very decisions we used to think could only be handled by human beings, such as weighing entrepreneurial risks and designing efficient workplaces. And it hasn’t done a bad job so far: the company’s key figures clearly outperform those of competitors on the market.

Sheer luck or a sign of a trend? In fact, some traditional management duties are, excuse the pun, virtually destined to be at least in part handled by AI.

Which Leadership Tasks Can Be Left to AI?

Bodo B. Schlegelmilch, Dean of the WU Executive Academy, has the answer: “In principle, a machine will never be able to replace a person’s innately human qualities, but it can certainly support them in doing their job.” Data analysis, particularly where large volumes of data are concerned, and a structured preparation of information to serve as the basis for decision-making are just two examples of where AI can be deployed.

So how exactly could AI support management tasks? And in which areas could it replace human CEOs at least in part? The leadership expert has answered these questions based on the most significant tasks of managers:

• Strategy and Planning

“At the end of the day, artificial intelligence is simply a tool,” Bodo B. Schlegelmilch says. The data analysis that AI can perform, where necessary at the blink of an eye, can provide a good foundation for making strategic decisions, which, however, will have to be made by people in the end. After all, a strategy is also about values, visions, and convictions that must be defined and pursued by the respective organization.

• Organization

“There is a lot of potential for putting KI to good use in areas requiring standardization and optimization,” Bodo B. Schlegelmilch explains. Machines have a structured approach to tasks, but they fall short where creative ideas, innovative thinking, and novel approaches are required. In a business environment, solutions often require a combination of qualities people possess, such as a sound grasp of the situation coupled with an understanding of its emotional qualities.

• Controlling and Finance

This is a field in which AI would be able to contribute in manifold ways as large data volumes, which are sometimes hard to manage, must be analyzed and important details crucial for sound decision-making are sometimes hidden in the mass. At the same time, experience and human intuition are hard to beat, Bodo B. Schlegelmilch points out: “A seasoned auditor who has reviewed financial statements for 30 years can often put their finger on the problem right away.”

• Human Resources

HR has relied on AI for some time, for instance to search for given keywords in CVs and cover letters to make a pre-selection or decide who to invite to the next round. “Machines are less biased than people, which is a clear advantage in staff management,” Bodo B. Schlegelmilch says. But also here, the final decision must be made by a human being because the chemistry between colleagues just needs to be right. Identifying a good fit, motivating existing staff, or successfully conveying an organization’s vision should not be left to algorithms.

• Communication

AI can definitely be trusted to pre- and post-edit material used for decision-making, such as an analysis of customer data. But when it comes to communicating the results, both inside and outside of the company, managers must step up. Transparent, clear communication, an active feedback culture, and (constructive) criticism can only be provided by human beings. “For any task that requires good rapport, trust, and appreciation, a machine will never be able to replace people. Just think about performance reviews or sales negotiations,” Bodo B. Schlegelmilch says.

AI vs. Human Beings in Times of Crises

A pandemic, a financial crisis, a war: regardless of the kind of emergency, in some cases AI might be able to sound the alarm bell early on. But deciding which measures to take and all aspects of crisis communication will remain the job of managers made of flesh and blood.

“Some situations require a paradoxical intervention. In other words: an action that is the total opposite of what you would normally do in a similar situation. This helps us gain a fresh outlook on things and get ready for a new start. I really don’t see a machine ever accomplishing that,” Bodo B. Schlegelmilch says.

In general, managers – just like employees and students – will be well advised to focus on what machines cannot provide: empathy, compassion, critical thinking, and social understanding.

In Defense of Human Leaders

For Bodo B. Schlegelmilch, the fear caused by the advance of artificial intelligence is exaggerated. “This is no different to when computers entered the world.” He emphasizes that there is no way back and that we should instead focus on using AI in meaningful ways that serve our (human) needs.

“People have so many traits that make them superior to machines.”

And that’s not all: “The future use of AI is a great opportunity for Europe.” The continent now has the chance to adopt a differentiated approach and, in this way, set itself apart from the US and China. “Not simply ‘the winner takes all’ or big-brother-like surveillance but thinking of employees first. This will enable us to use technology in a way that serves people and not the other way around. This European approach has been referred to as digital humanism or corporate digital responsibility. It’s about using new technologies while honoring our values. And this is another key job that will require human managers.”

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