István Szabó, director at PwC, argues that corporate leaders must develop organizational, strategic preparedness for the spread of generative artificial intelligence (AI). Results from PwC’s most recent global CEO survey show that 45 percent of leaders worry about their company’s long-term viability; this concern is linked to rapidly changing economic and political risks as well as the rise of new technologies.
Szabó points out that while the long-term effects of generative AI are hard to predict today, its disruptive potential is comparable to the historical spread of electricity — when costs fell, the technology permeated nearly every aspect of life. Early market examples already exist (for instance, AI-enhanced electric toothbrushes), and adoption is expected to accelerate.
Three levels of AI impact on business processes
Szabó distinguishes three basic ways AI can affect corporate processes:
- AI can take over processes that follow existing rule sets (for example, automatic email categorization).
- AI can map and analyze processes and propose decisions while leaving final judgment to humans (for example, personalized recommendations by streaming services).
- AI can replace the human factor and autonomously perform entire processes and make critical decisions without human intervention (for example, autonomous vehicles).
Current trends predominantly follow the first two levels, but some specialized companies have already moved toward the autonomous level.
Five practical recommendations for leaders
As a PwC expert, Szabó István recommends five considerations for leaders:
- Make AI and the resulting adaptive capability an integral part of corporate strategy — otherwise AI use risks remaining siloed within functions, and efficiency gains may not materialize across the organization; lack of coordination can even create cybersecurity risks.
- Inventory corporate data assets and verify data quality — generative AI’s effectiveness depends heavily on the quality of input data; erroneous or contradictory data will produce flawed conclusions.
- Identify corporate functions where generative AI can quickly and easily create value — this also helps employee acceptance of new methods.
- Invest time and energy in employee training — new job roles will likely emerge and some roles will disappear; long-term success depends on employees’ ability to adapt and on their capacity to treat AI-generated information critically.
- Leaders themselves must lead the change — they need to reconsider their own roles and decide on fundamental questions such as when and to what extent to deploy a technology, when to augment or replace human roles, and how to use technology to reshape core corporate functions.
Szabó emphasizes that leaders will be responsible for aligning employees’ creativity, knowledge and diverse experience with the constant presence of technology. Algorithms cannot fully replace the human factor, with all its importance and fallibility.
Practical challenges and leadership responsibilities
The biggest challenge will be reconciling the constant presence of generative AI and AI more broadly with employees’ limited time and attention. Another key question is what kinds of collaborations leaders will need to support employees in redefining their roles within or beyond the organization.
The article by Szabó István appeared in PwC’s biweekly newsletter “A jövő vállalata” and is available on hvg360. PwC’s newsletter issues are accessible free of charge to hvg360 subscribers until the end of September.
