What AlphaGo Means to the Future of Management

AI as management assistant: The artificial intelligence program AlphaGo got a lot of attention for beating 18-time Go world champion Lee Sedol four out of five games last week. The significance of this achievement is rooted in the extraordinary number of possible moves in Go: 2.08168199382 … × 10¹⁷⁰, reportedly more than the number of atoms in the universe.

That’s too many possibilities for brute computing force to handle (which is how IBM’s Deep Blue beat chess master Garry Kasparov 20 years ago). Yet AlphaGo, created by Google DeepMind, formerly British AI company DeepMind Technologies, mastered the 2,500-year-old board game on its own in a matter of months. “It started by studying a database of about 100,000 human matches, and then continued by playing against itself millions of times,” reported science correspondent Geoff Brumfiel at NPR.

Go bragging rights are nice for Google, but what does AlphaGo’s victory mean for management? “These machine-learning methods will also have significant impact on how we perform unstructured and complex business processes and decision-making tasks in day-to-day work,” explains Lei Tang, chief data scientist at Clari, a sales analytics company, in VentureBeat. “AI routinely considers options ignored by human beings … In this sense, AI is creative, helping humans achieve more.”

Tang says that “self-driving” enterprise applications will be managerial assistants that “detect relevant context changes (location, target customer, timing) and deliver relevant information at the moment it is most helpful.” Better yet, like AlphaGo, they will “become smarter as they analyze the results of ongoing operations, such as marketing campaigns, lead conversions, sales meetings, email flows, interactions with customer success teams, or customer churn.”

Buying digital capabilities, the smart way: There’s a piece of stock advice that comes along with every digitization manual: Develop your company’s digital capabilities. Like any other capability, there aren’t a whole lot of choices for following that advice: You can build, borrow, or buy it. That’s it.

Unsurprisingly, many companies are choosing to buy digital capabilities. Consulting firm Strategy& figures that 20,000 digital deals were announced between 2011 and 2015. Further, more and more of the buyers are non-tech companies — 48% more in 2015 than 2011. Making these acquisitions pay is likely to be a challenge, especially when buying outside your industry. “In the red-hot market for digital M&A — M&A in which the target is either a hardware, software, IT service, or Internet company — leaders of traditional companies must not only pick the right deals but figure out how to leverage them,” warn consultants Joerg Krings, J. Neely, and Olaf Acker in an article in strategy+business.

The authors advise that in order to identify the right target, buyers must first know how they will create value, the technologies that will be required, and where they might be found. To pay the right price, companies need to quantify the value being created and be willing to walk away from the deal if the bidding gets overheated. And, to retain the talent being acquired, buyers need to “go beyond money and try to identify goals the technologists can best accomplish with the help of their new, bigger organization.”

Videocasting for transparency: If you are seeking a tip on how to utilize social media to enhance organizational transparency from the top down, you need look no further than Jakarta. When Basuki Tjahaja Purnama was deputy governor of the Indonesian province and capital, he had meetings with the Jakarta city council and local government agencies videotaped and posted on YouTube. “The objective, according to Purnama — who is now governor — is for citizens to be able to understand exactly why certain decisions were made or not made,” writes Jim Brumby, director of Public Service and Performance, Governance Global Practice, at the World Bank.

Brumby calls out the videos as a means of promoting deliberative transparency, to “open up the very processes of decision making themselves, not only of decisions that have taken place, but also of those that are taking — and will take — place. With the low costs involved in streaming information, there is no technical reason why more deliberative processes could not be opened up and streamed live; the benefits seem to outweigh the costs.”

Obviously, there is information in both government and business that can’t be openly shared. But it also seems obvious that videocasting to communicate strategy and goals to employees and other stakeholders can enhance communication — and, more so, sharing how decisions are made and considerations involved can engender collaboration and commitment. It might improve management, too. “We know that this will change the behavior and incentives of those involved, as we have seen with the broadcasting — and now telecasting — of some parliamentary proceedings and parliamentary meetings with industry associations,” says Brumby. “Rather than stifle the decision making process, deliberative transparency can in fact strengthen it.”