Generative AI for CEOs: How to think about AI today, and how to get the most ROI from it

Summary

In this insightful video, David Shapiro discusses the transformative impact of generative AI on businesses, emphasizing its potential as a new kind of software that offers enhanced automation and decision-making capabilities. He outlines the importance of integrating AI into existing workflows and processes, highlighting its ability to offload cognitively demanding tasks and improve efficiency. Shapiro also stresses the ethical considerations leaders must keep in mind when adopting AI, advocating for trust, dignity, and respect in the face of potential disruptions.

Takeaways

• 🤖 Generative AI is a new kind of software that can be seen as an extension of existing automation and decision enhancement tools.
• 📈 Generative AI can be applied at a high level through the lens of people, processes, and tools, affecting organizational transformations.
• 🧠 It serves as a cognitive force multiplier, offloading high-performance cognitive labor and preserving human cognition for essential tasks.
• 🚀 Generative AI excels in activities that are menial, tedious, and time-consuming, offering solutions for pain points in businesses.
• 💡 By focusing on activities that add value and align with business outputs, generative AI can enhance revenue streams.
• 📊 Measuring success with generative AI may require a shift from quantitative to qualitative assessments.
• 🛠️ Tools that integrate seamlessly into existing workflows, known as drop-in tools, are more likely to be adopted and effective.
• 💡 Generative AI can improve existing systems by reducing the need for human intervention and enhancing decision-making.
• 💰 Investments in generative AI should be evaluated based on its ability to perform tasks better, faster, or cheaper than humans.
• 🌟 Executives should use generative AI to augment their own skills, develop empathy, and practice introspection for better leadership.
• 🛡️ Ethical deployment of generative AI, prioritizing trust, dignity, and respect, is crucial in maintaining integrity and public trust.

Q & A

How does the speaker define generative AI in the context of business?

The speaker defines generative AI as a new kind of software that brings new capabilities to businesses. It is categorized primarily as a new form of automation and decision enhancement, designed to take workload off humans and allow for more efficient, faster, and more reliable work processes.

What are the three main lenses through which generative AI should be viewed for CEOs?

The three main lenses for CEOs to view generative AI are people, processes, and tools. This framework helps organizations understand the transformational impact of generative AI on their workforce, operational procedures, and technological requirements.

How does generative AI function as a tool for cognitive offload?

Generative AI functions as a tool for cognitive offload by taking over tasks that are mentally demanding, such as decision-making, problem-solving, and learning. By offloading these tasks to AI, humans can conserve their cognitive energy for other problems that AI is not yet capable of solving.

What are the baseline capabilities of generative AI technology?

The baseline capabilities of generative AI technology include text and image generation, with other modalities like video and audio coming soon. As a language model, it can ingest and process vast amounts of text, making it useful for tasks like reading, summarizing, transforming information, and brainstorming.

How does generative AI enhance decision-making?

Generative AI enhances decision-making by ingesting and processing large amounts of data rapidly, providing insights and potential solutions that would be difficult for humans to achieve alone. It can also help mitigate decision fatigue by taking on some of the cognitive burden involved in continuous decision-making processes.

What are some activities that generative AI can automate?

Generative AI can automate activities such as reading and summarizing large texts, drafting and revising documents, brainstorming ideas, and planning. It can also be used for tasks like SWOT analysis, customer service interactions, and content creation.

Generative AI can be integrated into existing business workflows by adopting it as a drop-in tool that fits seamlessly alongside current tools and processes. It can also be used to improve existing systems by automating certain tasks, providing cognitive offload, and enhancing decision-making at key decision points.

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What are the ethical considerations leaders should keep in mind when adopting generative AI?

Leaders should prioritize trust, dignity, and respect when adopting generative AI. This includes being transparent about how AI is used, respecting human rights and privacy, and making decisions that will not be regretted in the long run. Ethical use of AI can help maintain customer trust and employee morale.

How does the speaker suggest executives use generative AI for self-improvement?

The speaker suggests that executives use generative AI to augment their own capabilities, such as developing a better sense of empathy, improving diplomatic communication, and practicing introspection. AI can also be used to learn more quickly and make smarter decisions, thereby staying competitive in the market.

What is the potential impact of generative AI on high-priority, high-stakes tasks?

Generative AI can significantly impact high-priority, high-stakes tasks by providing cognitive augmentation, reducing the need for human intervention, and improving decision-making processes. It can help address key risks and business activities that are responsible for a substantial portion of income and expenses.

How can generative AI contribute to better, faster, and cheaper business outcomes?

Generative AI can contribute to better business outcomes by performing tasks with superior accuracy and insight than humans. It can work faster by automating processes that would typically take a long time for humans, such as reading and summarizing large documents. Additionally, it can lead to cheaper outcomes by reducing the need for human labor in certain tasks, thus lowering costs associated with those activities.

Outlines

00:00

🤖 Introduction to Generative AI for CEOs

The speaker, David Shapiro, introduces the topic of generative AI, emphasizing its significance for CEOs. He positions the discussion away from narratives about AI and towards its practical applications in business, particularly focusing on generative AI. Shapiro mentions his availability for consultations and engagements, then delves into the concept of generative AI as a new kind of software, highlighting its role in business automation and decision enhancement. He compares the impact of generative AI to past technological disruptions like virtualization and cloud computing, and outlines the two primary ways of viewing generative AI: as a tool for automation and as a means for decision enhancement. The speaker encourages CEOs to consider where in their organization they can implement generative AI to improve efficiency and decision-making.

05:02

📚 Baseline Capabilities of Generative AI

This paragraph discusses the foundational capabilities of generative AI, especially as a language model. It can process vast amounts of text, including emails, chat logs, scientific papers, and more, enabling rapid extraction of information. The speaker emphasizes the importance of asking the right questions to leverage this capability effectively. Technical limitations, such as window size, are mentioned, but the potential for text summarization and transformation is highlighted. The paragraph also touches on brainstorming and planning, where generative AI can aid in generating ideas and working through complex plans, saving cognitive energy for other tasks. The speaker shares personal experiences using generative AI for creative writing and slide deck creation, noting how it has improved his communication skills.

10:03

🧠 Cognitive Offload and Problem Solving

The speaker explores the concept of cognitive offload, explaining how generative AI can help delegate mentally demanding tasks, thereby preserving human cognitive energy for more critical problems. Decision fatigue is introduced as a phenomenon that reduces the quality of decision-making over time, and the speaker suggests that generative AI can mitigate this by offloading parts of the decision-making process. Problem-solving is also discussed as a cognitively demanding task that generative AI can assist with, either by providing solutions or aiding in the problem-solving process. The speaker emphasizes the value of using generative AI to enhance the overall intelligence of an organization and to conserve human brainpower for tasks AI is not yet capable of solving.

15:04

🎓 Learning and Creativity with Generative AI

The speaker discusses how generative AI can streamline learning and creativity within an organization. Learning is presented as a natural and instinctive human activity that can be augmented by AI. The speaker suggests that generative AI can act as an interactive tutor, making training more engaging and effective. The cognitively demanding process of synthesizing new ideas is also addressed, with the speaker noting that generative AI, while not creating entirely new content, can remix existing knowledge to find effective solutions for various business challenges. Planning, a highly cognitive task, is the final aspect covered, where the speaker advises using generative AI to augment planning capabilities rather than replacing human planners.

20:05

🚀 Maximizing ROI with Generative AI

The speaker focuses on how to get the best return on investment from generative AI initiatives. He advises asking three key questions: what can generative AI do better than humans, what can it do faster, and what can it do cheaper. The speaker emphasizes the transformative potential of generative AI as a cognitive force multiplier, distinct from previous industrial revolutions that focused on communication and physical force multiplication. He encourages finding activities where AI is demonstrably superior to humans and using it to augment human abilities, rather than replacing them. The speaker also highlights the importance of using generative AI to accelerate time-consuming tasks and to lower costs where possible, while acknowledging that human oversight remains necessary.

25:06

🌟 Ethics and Courage in the Age of Generative AI

In the concluding paragraph, the speaker addresses the ethical considerations and the need for courage when embracing generative AI. He emphasizes the importance of not compromising ethics and principles in the face of technological disruption. The speaker advises executives to use generative AI to augment their own skills and decision-making, warning that failure to do so will result in being outpaced by competitors. He also highlights the potential for job loss and tough decisions but encourages leaders to prioritize trust, dignity, and respect in their strategic decisions involving AI. The speaker concludes with a call to action for executives to make bold decisions and to choose the path of least regret when dealing with the challenges and opportunities presented by generative AI.

Keywords

💡Generative AI

Generative AI refers to artificial intelligence systems capable of creating new content, such as text or images. In the video, it is described as a new kind of software that can automate tasks and enhance decision-making, with applications ranging from text generation to image creation.

💡Cognitive Offload

Cognitive offload is the concept of delegating mentally demanding tasks to external tools or systems, such as generative AI, to reduce the cognitive burden on humans. The video emphasizes using generative AI to offload decision-making and problem-solving tasks, preserving human cognition for when it is most needed.

💡Automation

Automation refers to the use of technology to perform tasks without human intervention. In the context of the video, generative AI is seen as a new form of automation that can take over menial, tedious, and time-consuming tasks, allowing humans to focus on higher-value activities.

💡Decision Enhancement

Decision enhancement involves using technology to aid in making better, more informed decisions. The video describes how generative AI, particularly language models, can ingest vast amounts of data quickly, providing insights that can lead to improved decision-making.

💡People, Processes, and Tools

This concept refers to the three key components of organizational transformation. 'People' refers to the individuals within the organization, 'processes' are the methods and procedures for doing work, and 'tools' are the technologies and resources used to facilitate these processes. The video uses this framework to discuss how generative AI can impact each of these areas.

💡Workflow Integration

Workflow integration is the process of incorporating new tools or systems into existing operational processes. The video emphasizes the importance of choosing generative AI tools that can be easily integrated into current workflows without requiring significant changes to how work is done.

💡Better, Faster, Cheaper

This phrase encapsulates the potential benefits of generative AI in improving business outcomes. 'Better' refers to enhanced quality, 'faster' to increased speed and efficiency, and 'cheaper' to reduced costs. The video encourages identifying areas where generative AI can outperform human labor in these aspects.

💡Ethics and Courage

Ethics and courage are highlighted as essential qualities for leaders in the age of generative AI. Ethics involves making principled decisions that respect human rights, privacy, and dignity, while courage is about making bold decisions in the face of technological disruption and potential job losses.

💡Cognitive Force Multiplier

A cognitive force multiplier refers to the ability of generative AI to amplify human cognitive capabilities, similar to how physical force multipliers like machines have increased human physical capabilities. The video positions generative AI as a new era of technology that enhances cognitive labor rather than just communication or physical tasks.

💡Self-Improvement

Self-improvement, in the context of the video, involves using generative AI to enhance one's own skills, knowledge, and decision-making abilities. Leaders and executives are encouraged to leverage AI not only for business advantages but also for personal growth and staying competitive.

Highlights

Generative AI is a new kind of software that can be viewed through the lens of people, processes, and tools in organizational transformations.

Generative AI can be seen as a new form of automation, allowing businesses to do more with less and enhancing decision-making capabilities.

Language models within generative AI can aid in judgment, creativity, appraisal, brainstorming, and drafting by ingesting vast amounts of data quickly.

Generative AI can perform checks and interlocks, improving the quality and consistency of work.

The technology can automate and accelerate business processes that have been manually intensive, such as combing through financial reports or consolidating knowledge from chat logs.

Generative AI can offload cognitively demanding tasks like problem-solving and learning, allowing humans to focus on areas where AI is not yet capable.

The use of generative AI can lead to cognitive offload, treating human cognition as a scarce resource to be preserved for when it is truly needed.

Generative AI can help in synthesizing new ideas and planning, which are cognitively demanding tasks, by providing insights and suggestions based on data and trends.

The key to using generative AI effectively is to preserve human cognition for when it is most needed, such as in high-priority or high-stakes tasks.

Generative AI tools should ideally be drop-in solutions that fit seamlessly into existing workflows to maximize their value and ease of adoption.

Executives and leaders should use generative AI to augment their own abilities, such as developing empathy, making better decisions, and introspection.

Generative AI can be used to improve existing systems by automating parts of the process, reducing the need for human intervention and increasing efficiency.

When adopting generative AI, focus on activities that are most menial, tedious, and time-consuming, as these are prime candidates for automation.

Generative AI can be applied at every level of business, from internal processes to customer engagement and vendor management.

The best return on investment from generative AI initiatives comes from finding activities it can do better, faster, or cheaper than humans.

Ethical considerations are crucial when deploying generative AI, with trust, dignity, and respect being the guiding principles.

Leaders should not compromise their ethics and principles when embracing generative AI, as these values will be crucial in navigating the future.

Transcripts

good morning everybody David Shapiro

here with another video so today's video

is going to be a little bit less about

the narratives around Ai and that sort

of stuff and it's going to be a little

bit more uh down to Basics uh let's talk

let's talk business with artificial

intelligence uh particularly generative

AI

uh real quick plug before we get started

uh I am available for one-on-one

consultations on patreon and I'm also

available uh for for different kinds of

engagements uh reach out to me on

LinkedIn if you'd like to talk about any

of the things that I'm talking about

here

all right so getting right into the show

let's talk about generative AI for CEOs

and we're going to look at it at a very

high level so first we're going to look

at it through the lens of people

processes and tools uh all organizations

go through Transformations and one of

the ways to look at organizational

transitions is through people processes

and tools what kinds of people do you

need and how does that how does that

change what kind of expertise training

that sort of stuff how do your processes

change uh within the business and then

what tools do you use so this is just

kind of the the the background framing

we're not going to unpack these in any

particular order we're just going to

kind of talk about generative AI through

this particular lens

so one thing that you can think about

generative AI is that it's just more

software

at a fundamental level generative AI is

just a new kind of software but it is

still just software

one thing to keep in mind is that uh

technology you know computers uh

software that sort of stuff has

automated and accelerated business for

decades this is nothing new it's nothing

different this is just the next flavor

for those of you in the technology space

you might remember how virtualization

was a very disruptive technology for the

data center and that ultimately led to

uh the the

preeminence of cloud computing which is

now pretty much standard and so the

combination of virtualization and apis

and stuff that made cloud computing uh

you know the viable business model that

it is today this is no different from

how Oracle and SQL Technologies

transformed uh the way that businesses

handled data and then of course there's

everything that Microsoft did for for

business productivity from their office

suite to Microsoft Windows and

everything else team Foundation

everything

so

from that perspective from a software

perspective you can think of a

generative AI in two primary categories

the first category is that generative AI

is a new kind of automation

and so you know again business

automation nothing new uh and business

automation is also it doesn't really

change the idea is that you just do more

with less you do it faster and you do it

more reliably so looking at generative

AI through the lens of automation the

idea is that it can take some of the

workload off of humans and put it onto

machines and then it can allow you to

get more done faster with less and more

reliably that is the entire point of

automation

another thing that you can look at it is

and this is kind of the fundamentally

new aspect is it has to do with decision

enhancement and what I mean by that is

that the particularly language models

they can Aid with all kinds of things

whether it's judgment creativity

appraisal brainstorming drafting they

can also read a tremendous amount in

very short periods of time which can

allow you to make better decisions by

ingesting more data than ever before

so by thinking of generative Ai and

these two uh like I guess categories

Automation and decision enhancement that

can really help you target where in your

corporation where in your organization

to look at using generative AI again the

idea of automation is that you get more

done faster and of course time is money

another thing is that you can do it with

less you might be able to do it with

less head count or you can take the

ideally you take the head count that you

do have because we don't want to see

anyone get laid off if we can avoid it

and then you you Empower your existing

staff to do twice as much four times as

much 10 times as much so that is and

then of course you can also use

generative AI to perform checks and

interlocks which can raise the quality

of work and make it more consistent so

those are a few uh kind of off the cuff

ways to think about it like yes

generative AI is just more software but

there's it does give us a couple new

capabilities of this software

So speaking of new capabilities uh

generative AI mostly right now is text

and images but there's other modalities

coming soon namely video audio and a few

other things so what are the what are

the Baseline capabilities that this

technology has first of all as a

language model it is primarily based on

text which means it can read everything

it can ingest email chat papers

scientific papers articles laws

protocols reports logs tribal knowledge

in the form of KB articles documentation

that sort of stuff

so when you think when you have a

machine that can read at a thousand

times faster than any human think of the

text Heavy aspects of your business

whether that is combing through

financial reports or consolidating

Knowledge from from chat logs customer

feedback there's all kinds of stuff that

is text based or could easily be

rendered as text that you can then just

read and get a tremendous amount of

information from now the problem there

of course is you have to be asking the

right questions and there are also still

technical limits namely the window size

of some of these things

you can summarize and transform text and

information and so what I mean by that

is you can take a large block of text

and you can either make it smaller or

change the formatting or that sort of

thing which again this is one of the two

one of the new tools in the toolbox

that allows you to engage with the data

that you do have in a different manner

uh brainstorming and planning so this is

one of the most powerful aspects of

tools such as chat gbt it's like hey I'm

addressing this problem help me

brainstorm how to approach it uh I've

used brainstorming everything for uh

writing fiction you know it's like hey

I'm working on this scene uh help me

brainstorm a few ways to approach the

scene so that it you know ticks these

boxes right you give it you give it some

constraints and Technologies like chat

GPT will absolutely surprise you in

terms of what they're capable of helping

you brainstorm because they it has a lot

more information than than you will ever

have and so if you give it the right

constraints and the right problem space

it will surprise you and it'll add

information to uh what you're trying to

do planning one of the things that's

really good at is helping you think

through every step of a plan

brainstorming and planning are among the

most cognitively demanding tasks and

we'll talk about cognitive demands and

cognitive offload in just a moment but

basically you know there are some things

that chat GPT and similar Technologies

can do that can save you a tremendous

amount of mental energy which then you

can allocate to other things other

problems that AI is not yet capable of

doing and then finally Drafting and

revising uh you know whether you're

writing a legal document or an agreement

or a contract or even just drafting an

email I mean I use chat GPD it's like

hey I need to respond to this email I

want to do it diplomatically and explain

it clearly and you know like yes I am

good at writing but it's just easier to

have the machine write the first draft

for me and then I can clean it up and

then revisions as well

in some of my previous videos you might

have seen where I use uh the chat GPT

API to provide feedback on my fiction

and and plenty of other things I often

use chat GPT for uh helping actually

even make these slide decks although I'm

getting better at making these slide

decks so I actually need it less which

is a really interesting phenomenon it's

like okay I've actually gained new

skills by using this tool and I am

better at communicating now and I need

this tool less really fascinating I

don't know if that's going to keep up

but anyway so here these are four basic

categories of new capabilities that you

can think of in terms of okay what is it

that generative AI is actually capable

of right now and then from there these

are kind of the low level building

blocks that you can slot into other

products other services whether it's

internal or external right because you

might have internal facing tools you

might have external facing tools and

these are things that you can just kind

of pipe into existing Frameworks

existing processes to make them better

you can also think about these when

creating new products and services

okay so as I promised cognitive offload

most humans are capable of two to maybe

four hours of high performance cognitive

labor per day many people less so an

average a rule of thumb is about two

hours

so the idea of cognitive offload is that

it's like okay whatever it is that's

difficult you uh delegate that to

someone else you delegate it to a

machine

excuse me you delegate it to a machine

you uh you do something to make it

easier you create a process or you

offshore it or whatever

so what are some things that are

cognitively demanding decision making

there's a phenomenon called decision

fatigue if you follow hbr uh and or

scitec daily or whatever there's plenty

of research that goes into decision

fatigue and basically what this means is

that the cognitive demand of making

decisions all day is very very taxing

it's very draining and so what happens

is that after making too many decisions

once decision fatigue takes over people

will just kind of go with the default

answer or whatever they're most

comfortable with or they'll use simpler

and simpler heuristics and objectively

speaking decisions get worse with with

time and fatigue so any place that you

can use generative AI to offload some of

the decision-making process from humans

or to augment it right because it

doesn't necessarily mean taking it from

Human but instead instead of having to

have a human synthesize all the things

and think through it you can have the AI

generator report like okay based on the

problem space that you're addressing

here's the top three choices you know

think through this and again this is

something that I use chat GPT for all

the time it's like okay help me think

through what you know what are the

questions that I'm forgetting to ask

myself that sort of thing and by by

having the machine do some of the

thinking for me it preserves my

cognitive energy for other problems

speaking of problem solving

problem solving is also very very

cognitively demanding whether you're

trying to solve a financial problem a

legal problem a technology problem

having something that you can bounce

ideas off of or ideally actually just

pipe it into your existing products and

services and platforms where either it

can solve the problem for you or it can

help you solve problems again this is

going to be a high value ad where the

overall intelligence of your

organization will go up if you use

generative AI to help your organization

solve problems better but it also save

your employees brain power for the

problems that AI is not yet capable of

solving

learning learning is something that uh

All Humans Do it's natural it's

instinctive it's reflective sorry

reflexive you don't even need to think

about doing it but when you put yourself

in a position where you're deliberately

learning and stretching your mind that

is very exhausting it's very taxing uh

and so what you can do is you can use

these tools to help streamline your

training your learning

and what that does is that you uh can

meet everyone where they are for your

training programs and you can also often

learn faster because then you have an

interactive modality and you can

basically create an internal uh

customized tutor that says okay here's

the company's training material let's

get through it and then instead of just

like watching a brain dead boring video

that nobody actually cares about anyways

you can have an interactive experience

which one will make the training more

engaging uh and that that level of

Engagement means that people will enjoy

it more and they'll retain it better

and then of course that's you know

corporate training is one thing but

there's also there's also the uh

acquisition of new skills so let's say

you're bringing you're onboarding a new

product or a new service or you're

shipping a new product and service and

you need to teach people about it so

remember that learning is very

cognitively demanding and AI chat Bots

are already good at tutoring and

teaching and so this again is a way

where you can use the AI not to replace

humans but to augment humans and bring

them to the next level

creativity synthesizing new ideas is

also very very difficult it's very

cognitively demanding and while

Technologies like chat GPT and others

are not technically creating anything

new most humans don't create anything

new anyways we just remix stuff that

we've experienced which is not any

different from what generative AI does

and also within the context of business

you don't necessarily need to create

anything entirely 100 new what you do

need to do is take the things that you

know and then deploy them with with good

application you need to find the right

solution for the problem that you're

facing

whether it's a marketing problem legal

Finance HR right if you need to come up

with a creative solution for an HR issue

again chat GPT knows enough about the

human condition and emotions and all

this other stuff to help you think

through and come up with Creative

Solutions uh whatever it is that you're

doing and then finally planning as I

mentioned planning is very cognitively

demanding and this is this includes

forecasting anticipation or even

predicting the future and so basically

one thing that you can do is you can ask

chat gbt say like hey uh you know the

these are the business trends that I'm

seeing this is what the Market's doing

help me think through this and it it's

not necessarily going to be 100 right

but that's not the point what I'm saying

is you're not using it to replace your

ability to plan you're using it to

augment your ability to plan

so the golden rule for all of this one

of the best ways you can use generative

AI this Golden Rule is preserve human

cognition for when you really need it so

this design principle goes uh it one

it's it's relatively old this is one of

the chief design principles in the Unix

operating system which treats human

cognition as a scarce resource but also

this is how jet fighters work so the

avionics research industry uh for

particularly for military realized that

you needed to treat a pilot's cognitive

attention as the scare as a very scarce

resource and so the avionics in jet

fighters only gets their attention when

they absolutely need it

and so if you watch the top gun Maverick

movie

um one of the scenes where the plane is

like spiraling towards the ground and it

the alarm starts where it's like you

know pull up pull up pull you know and

then as the uh as the level of danger

Rises the alarm changes right and so

that change in tone uh what that does is

it calls the Pilot's attention to

something that is at that they need to

pay attention to immediately uh and so

that is an example of how uh attention

engineering can be used for good rather

than the way that it's used in social

media and this is just an example but if

you the the whole point here is that the

the point of cognitive offload is to

treat your employees brain power those

those two hours of high performance

cognitive labor as a very scarce

resource so that instead of you know

using their raw brain power to do the

work manually instead they use a machine

to offload as much of that as possible

so that then they can protect their

productivity for or elsewhere

so here's some questions to ask so these

are based on questions that I often ask

when I'm Consulting uh and this is these

are the questions that I ask to zoom

into and find okay where is it that you

need to use generative Ai and how do you

employ it so the first question what

activities are the most menial tedious

and time consuming what do you avoid

doing because it's just too painful

so this is a really good question I

usually start with something like this

especially if if uh you know my client

or whatever doesn't really know what

they need or know how to deploy

generative AI it's like okay what are

your pain points and of course this is a

business practice that is as old as

business itself what are your pain

points let's see if we can address those

pain points with generative AI

and you know the the way that it can

address it is you know look at cognitive

offload and new capabilities

the second question is what activities

actually add value what is the

objectively uh beneficial business

output of a given activity or in other

words what is the value proposition what

is what is the activity that you're

doing that is actually giving something

to your customers what are you getting

paid to do what is the outcome that

they're looking for because if you apply

generative AI directly to your outputs

to the things that bring in Revenue

obviously that's good for business what

a lot of startups are doing right now is

trying to invent new products and new

services to create entirely new revenue

streams but there's plenty of existing

businesses out there that could probably

help their Top Line you know get the get

the net uh income up by

providing more goods and services either

at a cheaper price or adding some novel

features to their products and services

but by by actually paying attention to

the objective business value of any

activity and this it doesn't necessarily

have to be the business outputs it could

be the outputs of a given Department the

HR department your legal department your

it Department your marketing department

right because one of the what is the

output of the marketing department you

generate you generate leads which can

lead to revenue

so that's what I mean by outputs what is

the objective value added number three

how do you know that an activity is

successful

whether it's a kpi intuition experience

what is it that you actually pay

attention to to know that you have been

successful the reason that this is a

good question for generative AI is

because sometimes it's not obvious how

generative AI can help you be more

successful so if they're like you know

if you're looking for an intangible

right like maybe you need to build

customer trust or build rapport that is

something that uh that might surprise

you but chat GPT and other similar

Technologies can actually help you with

you say like uh hey I you know I'm gonna

I've got a customer that I'm cultivating

um let me feed you in the profile for

this customer let's talk about this

customer and let's connect with what

they actually need right how can I how

can I make this customer trust me how

can I earn their trust right and so

that's just one example of where if it's

a marketing a sales sales team

it can generative AI can help them

increase their level of success if you

pay attention to what it is that

actually makes them successful and it

does not necessarily have to be

something that you can put a number on

in fact a lot of business is something

that is very difficult to measure

objectively now that being said chat GPT

doesn't necessarily need metrics this is

one of the biggest differences between

conventional machine learning and

artificial intelligence and generative

AI it operates in qualitative space not

quantitative space this is the biggest

fundamental difference between data

science in the past and data science

today is that pivot from quantitative

data numbers forecast linear regression

that sort of thing to qualitative

information what is it that this person

likes and why and how do you earn their

trust and finally question number four

what activities are the highest priority

or highest stakes in other words where

would having an extra brain or an extra

set of eyes make the most difference

so this is something where uh often if

something is high priority or high

stakes that is where that's like the

sweet spot right that is that is the

meat and potatoes of your business

because that is the that is the set of

tasks that only humans can do right now

and they are they're going to be the

bottleneck right so what I mean by that

is uh I used to work at managed service

providers and so you know one of the

biggest things was uptime if the if the

data center goes down or a service goes

down that's money out the door so that

means that's a very high priority task

and so if I were Consulting for a

managed service provider and they said

Dave how can we use generative AI to

help our bottom line I said what are the

what are the biggest uh priorities that

you have and it's like well if we have a

severity one let's you know we need to

all hands on deck and one thing this is

just from my experience in technology

one thing is that a lot of people are

very reactive

I actually had to leave a job because my

boss did not understand the value of

eliminating technical debt and so he's

just like oh well we have fire alarms on

a daily basis and that's just the way

things are and I said no the hell it

isn't like prevention is what we should

be doing right if if your fire

department is over taxed because

everything is burning down maybe you

need new fire code he didn't get that so

I left that job but my point is is that

there there are going to be key risks

and key business activities that are

responsible for a good chunk of the

money coming in and the money going out

so that's what I mean by high priority

and high stakes you pay attention to

those things first and you fix them as

much as you can by adding generative AI

uh to make you know to to change those

ratios so they got more coming in and

less going out uh you know you can ask

and as a CEO you can ask these questions

of every department head you can also

look at it from an internal perspective

or an external perspective how do you

engage with your customer your vendors

your clients how do you engage with your

internal stakeholders how do you engage

with your uh your financial stakeholders

your shareholders

these are you can generative AI can

apply to literally every level of

business

okay so on the tool side so we talked

about the people in the processes let's

talk about the tools

uh first one thing that you can do the

best one of the approaches is that you

can create drop-in tools so one thing is

that a lot of people get wrong is

they're trying is they try and build

tools that require a fundamentally

different workflow and it's a

fundamentally different approach to

business and I this is something that I

often talk about with uh for startups

where they're like oh we've got this

great new tool that we're building it's

you know based on generative Ai and I'm

like okay great but how are businesses

going to use it is this gonna is is this

gonna require them to adopt an entirely

new workflow is it going to replace

existing tools or ideally it's a drop-in

tool that just goes in alongside every

other tool in their toolbox so for

instance in the marketing department

they already use file servers they

already use Photoshop they use Adobe and

and image services

stock image services so in that case

image generators like stable diffusion

and mid-journey and adobe's Firefly

these are all drop-in tools where they

fit into the existing workflows

perfectly and so when you're whether

you're looking at adopting a generative

AI tool or service make sure that it

will fit into your existing workflows

because that's where you're going to get

the most value out of it if it's a tool

that requires a fundamentally different

approach the the path to adoption is

just that much harder and I you know I

saw this on the back in my it

infrastructure days all the time where

it's like yeah there's a great new

powerful tool but like we can't really

use it because it doesn't integrate with

anything else that we do and it's going

to fundamentally change the way we do

business which just means it's not a

good fit and this is this is something

for startup CEOs to keep in mind it's

also something for CEOs that are not

Tech Centric or AI Centric when adopting

AI tools

make sure that you make sure that you

get those drop-in tools one another

thing to keep in mind is that general

purpose tools like chat GPT are often

the hardest to use because you have to

know a lot about the tool you have to

know a lot about what it is that you're

trying to do and you have to interact

with it in a very fundamentally

different way than you've ever

interacted with any uh technology tool

in the past

so because of that part of what makes a

a drop-in tool is going to be the

affordances and user experience design

that says oh this is just like this

other piece of software that I use this

other app that I use all the time it

just has some AI baked into it and it's

really easy to use this is one of the

things that I consulted with in the

early days

was there was a lot of people just

putting together generic dashboards of

AI tools and I'm like you have no

coherent strategy there's nothing about

this that just stands out and says Ah I

know exactly what this tool is for and

you know so basically what you're trying

to optimize for is make your generative

AI tool as intuitive as possible where

you can just pick someone off the street

put them in front of the app and they

say oh I know I one I know exactly what

this does and I know exactly how to use

it just by guessing if you can if you

can do that then you uh almost certainly

have a drop in tool

now the other thing that you can do is

you can improve existing systems so this

could be you know if you've got teams if

you've got slack if you've got exchange

you know or or even log services or

whatever and of course that's just all

looking at it from the I.T side there's

plenty of other business platforms

whether it's your financial workflows

your marketing workflows

whether if you if you if you're not

trying to add a new tool what you can do

is if you have access to the code base

uh for you know your internally

developed tools you can add generative

AI uh for at some of these uh decision

points in order to make it just a little

bit better a little bit faster so the

primary example I have in my head is

servicenow and other

um internal management things like that

so let's say you have ticket routing

you've got uh follow-ups you've got

emails so basically like you know

instead of having uh humans do a lot of

the work you can have the machine do a

lot of the work for the humans and to

say hey which one of these emails do you

want to send to this customer as a

follow-up uh or if there's a if there's

a ticketing system you can have the

ticketing system ask a few obvious

questions before a human even looks at

it so that there's by the time your

ticket gets escalated to an actual

engineer or whoever it gets to a few

questions have already been asked

immediately and so there's more context

which can reduce your mttx

another place that you can look at it is

human intervention where in uh and it

can either be routing to the correct

human so I was actually just talking to

a friend about this on the medical side

uh who's at a startup trying to use

generative AI which is uh if there's a

if there's a patient need how do you

write it to the route it to the correct

medical provider that is a that is a

great use case because you can feed a

whole patient chart into the llm and say

what what exactly competency what

competencies does this person need right

now

um and then you get the you get the

exact right thing and then you make sure

that uh that that uh you know nurse or

or specialist also gets the exact notes

that they need uh without having to go

talk to a you know a bunch of other

people because I mean heck one of my one

of my patreons several of my patreon

supporters are in the medical field and

they talk about just how annoying it is

when charts aren't updated correctly and

when uh Physicians and nurses don't talk

to each other or they you know forget to

pass something on so again you can

reduce human interaction uh or sorry you

can reduce the need for human

intervention by having some of these

interactions automated

and then finally cognitive offload if

you if you go hunting across your

organization for the things that are

really demanding those are ways that you

can improve existing systems because you

know you reduce the frustration that

will increase productivity increase

satisfaction and that also just all

speaks to the bottom line

okay so that was people processes and

tools let's talk about better faster and

cheaper otherwise uh how do you get the

best return on investment from any

generative AI initiative whether it's a

product or service that you're thinking

about adopting or one that you're

building uh internally

so the the primary three questions here

that you should ask yourself is uh what

can generative AI do better than humans

what can it do faster than humans and

what can it do cheaper than humans and

so this is what I mean where it's like

okay if you can offset some of the labor

costs uh you can ideally hopefully you

preserve your existing head count but

you take your organization to the next

level and you can double triple

quadruple productivity while also doing

cognitive offload so your your human

employees are happier

so this is a universal truth of

technology technology has always been a

force multiplier so you know the the

Industrial Revolution example that I

always love to give is the tractor

tractors are very complicated they're

expensive heavy pieces of equipment but

we still use them because they have the

physical power output of literally

hundreds of horses uh and so you get rid

of the you instead of feeding and

providing veterinary care for hundreds

of horses you have a tractor that all it

does is drink gasoline need some oil and

some replacement parts every now and

then

generative AI is a cognitive Force

multiplier so let me say that again the

the first industrial or the first three

industrial revolutions were more about

uh communication Force multiplication

and physical Force multiplication

generative AI is the first example of a

cognitive Force multiplier it doesn't

just send email faster right because you

know email came around in the 80s or

whatever which is like okay cool

communication now happens faster that's

not really cognitive labor or crunching

numbers right math definitely very

cognitively demanding but this is a new

era of of cognitive labor force

multiplication so that's why this video

has cognitive offload as a central

lesson as something to look for when

you're trying to integrate generative AI

into your business

better

so uh keep your ear to the ground but

you know basically chat GPT has already

demonstrated Superior uh clinical

judgment than many doctors and this is

according to Harvard research it also

has better uh executive judgment

executive reasoning uh than many people

and this includes managers and some CEOs

and so in this case look for the

activities where generative AI is

demonstrably superior to humans this

will give you obviously a competitive

Advantage but if it is better than you

use the machine right humans can go use

a rake and a hoe and and and and and

plow uh the field but we don't have

humans doing it by hand anymore because

the machine is better so just because

you can do something doesn't mean that

you should especially if the machine is

better than you at it now again this

doesn't necessarily mean get handed over

to the machine entirely but you should

be using the machine to augment your

abilities so in the case of doctors if

there is any room for doubt maybe

doctors should be required or maybe not

required but you know as part of the the

medical resourcing system like you know

epic and Cerner and stuff

you integrate some uh some language

model technology into that where it's

like okay cool uh based on this

patient's chart and test results have

you thought of X Y and Z uh just enough

just enough to clue in that the

physician on the direction that maybe

they need to go in order to augment

human judgment and augment human

executive reasoning now one thing about

this is that unless you have a you know

a product or service where they've done

the work and they can say look this this

AI service that we've built is

demonstrably better than humans you're

going to need to figure that out for

yourself through experimentation and

consultation

um

and also as I mentioned earlier you will

need to start measuring some things

qualitatively rather than quantitatively

so if if the objective is patient

satisfaction or customer satisfaction or

trust or any number of those other

intangible things they can be a lot

harder to measure but fortunately

language models can help you measure

those things through approximations

and so what I mean by that is just ask

chat GPT

um you know how can I measure customer

satisfaction or trust or whatever and

it'll give you some cool ideas about how

you can measure that and then you say

well what's the difference between

quantitative and qualitative trust me if

you do that experiment you'll see what

I'm talking about

uh but again this is no different from

using machines to do things that humans

either couldn't or shouldn't do uh you

know a forklift right yes a human could

you know unpack a pallet and put

everything in the you know on a new

palette in the truck but it's easier to

just use the forklift to pick up the

pallet as a whole and put it in the

truck for you likewise there's going to

be some things that generative AI it can

just do that a human can't

um or that would take a human way too

long to do so just offload those things

and let the machine do it because it's

already better than the human

faster so generative AI is super super

fast it can read literally like 20 pages

of text in a few seconds no human is

capable of that and then it can use that

text it can either summarize it

brainstorm extend it it can draft a new

version all of this happens really

really fast and of course time is money

right velocity is speed plus Direction

so you got to make sure you're going in

the right direction but basically so

this is another thing that I do when I'm

Consulting is I say what takes the

longest you know so when I consult with

scientists and academics it's like oh

well you know writing grants is takes

forever

um you know Grant proposals Grant

reviews that takes forever or writing

research papers and revising research

papers takes a long time

whatever business activities take the

longest those might be good targets uh

for generative AI uh not related to

generative AI but many many years ago

earlier in my it infrastructure days I

was working at a small uh medical

startup medical software startup and I I

we got a couple new servers and I added

these new servers to their build Network

and so then their software builds took

went from 26 hours to two and they said

well Dave you threw off our entire

workflow because instead of kicking off

a build and then just coming back the

next day we just go to lunch and come

back and now we have to keep working

but again if you can I mean and

Technology can do this you can shorten

things by a factor of 10x or 100x I

usually look at the things that can

happen that we can shorten by 100x say

okay what takes the longest here

we've got some lawyer friends right the

you know there's there's a bunch of

active lawsuits out there and I said

okay given that we have generative AI

that can read and summarize you know

hundreds of pages of legal documents

really fast how can I build a tool that

is going to really help you get to the

bottom of these things really quick uh

so again looking looking at ways that

generative AI can speed up really basic

stuff just reading right don't

underestimate the power of speeding up

really basic tasks

uh so another example is that I have I

I've built my own tools that I use for

uh for helping revise my writing

um Chad GPT still sucks at writing by

the way

um but so I don't use it for writing I

use it for revisions and providing

feedback because that's something that

is really good at it says Hey I just

read this whole chapter let me give you

some feedback on it and it gives really

good feedback

I know because I've paid a professional

editor and it gives me uh feedback at a

very similar level as a professional

editor now that being said it does miss

a lot of stuff but instead of a two

month turnaround I get a 30 minute

turnaround so that's what I mean by look

for things that you can accelerate by a

factor of 10x or 100x so let's see going

from two months or 60 days to 30 minutes

that's you know 60x and then instead of

hours it's minutes like so I mean you're

looking at a 200x speed up by using chat

GPT API for getting uh feedback rather

than using a human so again like you

know those that level of speed up is

absolutely possible with generative AI

look for those and you're going to

really make a a very good difference in

some departments

and then finally cheaper uh here's the

thing is that a lot of stuff costs a lot

and human labor is one of the most

expensive parts of of uh many businesses

and the best expense is no expense so

what I mean by that is unfortunately we

are seeing where like many many

companies are doing huge huge layoffs as

they pivot and I don't know if those

jobs are ever coming back but that kind

of goes outside of the scope of this

video but

what I mean by that is that if there is

something that you can do cheaper with

AI than paying a human or you can

Empower a human to do some to do the

same task faster and therefore cheaper

that is kind of the direction to look at

so where can you lower costs with

generative AI this one is actually a lot

harder to do

because uh again it's it's better at

some things and it's certainly faster at

some things uh but you still need human

oversight you still need human uh you

know guess and check or whatever uh you

need experts supervising these systems

um but with that being said there are

ways that you can probably lower costs

because again chat gbt has a 20 a month

assistant it can do the work of

literally like thousands of dollars

worth of cognitive labor for you per

month

um so that you don't need to hire like a

research assistant or that sort of thing

which then frees up the you know

cognitive labor of other humans but

again look at where it's cheaper uh

generative AI in the form of image

generators much much cheaper than

graphic artists which is really really

unfortunate for the graphics artists out

there and I don't have a solution but

from a business perspective this says

like okay hey we can get a lot more art

done uh much faster and much cheaper uh

than than with the humans you still

often need humans to do touch-ups and

and that sort of thing and to even Drive

the machines but again much cheaper

because it is faster

you can also use it to do a SWOT

analyzes and that sort of thing again

that goes back to the cognitive

reasoning where you can use generative

AI to help look at and control those

outflows

and then so this is uh we're closing in

on the end of the video one thing that I

really want to point out particularly

for the for the managers middle managers

and the executives watching is that you

need to be using generative AI to

augment yourself

um whether this is using tools like chat

GPT to develop your sense of empathy and

to be more diplomatic uh to even be more

vulnerable to learn to be more

vulnerable with your customers your

employees uh your star players that sort

of thing you use that and you will

develop better relationships and and

you'll develop more trust and have a lot

more of that intangible benefit of

working with your employees and but

employees inside the company and then

customers outside the company

introspection so this is one of the most

unsung things that all leaders need to

do is using these tools whether it's

chat GPT or the reflective journaling

tool that I built or anything else

understanding how your own mind works

and What Makes You tick is absolutely

critical to being a good leader because

if you're doing things for the wrong

reason you need to be aware of that so

that you can fix that and make sure that

you're doing things for the right reason

introspection and the way that

generative AI can help with that is

really really good and then finally

smarter if you're not using generative

AI to learn more faster to make sure

that you have good understanding you

will be left behind and so this is

something like I know I'm saying that

like really bluntly but the fact of the

matter is if you're not using generative

AI to make yourself smarter to make

smarter decisions your competition is so

it's that simple

and then lastly ethics and courage

I've mentioned a few times during this

video that in some cases I think

generative AI will inevitably lead to

layoffs job loss and that sort of thing

uh there's going to be really tough

decisions ahead for a lot of people and

the competition May undercut you and you

might feel like you have to compromise

your principles and your values in order

to stay competitive the thing is it's a

foregone conclusion that technology will

will disrupt markets do you remember

borders borders imploded because of

Amazon that's just the name of the game

so if you need to close the doors and

pivot maybe that's what you need to do

and it really sucks because nobody wants

to go out of business nobody wants to

lay off you know hundreds or thousands

of employees because you're going out of

business that being said it's probably

going to happen

now even if you don't go out of business

layoffs and pivots are coming they're

actively happening

um you know like you remember telephone

operators telephone industry didn't go

away telephone operators did and so

going through these pivots is going to

be very difficult and and very painful

for some people

so what I want to leave you with is this

idea that there are three guiding

principles that you should probably keep

in mind as you Embrace generative Ai and

that is Trust dignity and respect so

first make decisions that prioritize

earning and keeping trust once trust is

lost it is very difficult to get back

and if you look at some of the

technology or tech companies out there

that have abused the markets trust abuse

their customer trust by violating

privacy and that sort of stuff I gotta

tell you like I'm never going back to

those platforms I don't know I don't

care what they do and so if you sell

your trust if you if you sell your

trustworthiness in the age of generative

AI you will probably not be able to get

that back because Above All Else a lot

of people are are caring more and more

about privacy and not being abused and

manipulated uh by the corporations that

we engage with if you watch my my

channel you know that I am very very

skeptical of corporations that being

said I also understand that corporations

are here for a reason and they provide

uh critical goods and services to all of

us

so make sure that you put trust front

and center with the way that you deploy

and use uh generative Ai and the

decisions that you make a strategic

decisions you make around generative AI

dignity so this is something that is one

of those more intangible things which is

you know how do you prioritize human

dignity this means

um this means treating people with

respect respecting the Dignity of their

time off respecting the Dignity of their

competence Their Fear so this is another

thing A lot of people are absolutely

Paralyzed by fear because they don't

know what's coming and as a CEO you

might not know what's coming either but

if you treat people with dignity and you

say you know what I'm not going to

compromise on this value then they're

gonna like you more they're gonna

they're gonna give you more of the

benefit of the doubt and and trust you

to see it through and then finally

respect respect for human rights respect

for privacy respect for the way that

people feel if you prioritize respect as

well as trust and dignity then you know

even if your company implodes or even if

you have to lay off people you're not

gonna you're you're you won't regret it

put it that way you will not ever regret

prioritizing trust dignity and respect

no matter what else happens

and so with this my my caution to all

Executives and leaders out there in the

age of generative AI is do not

compromise your ethics and principles

but also be courageous and make some

bold decisions because if you're not

making bold decisions other people will

so for a quick recap we talked about the

people processes and Tools around

generative AI this is you know

generative AI is just like any other

software it provides new capabilities

new opportunities but also new threats

one of the key ways to look at

generative AI is look at where it's

better faster and or cheaper than humans

this is where you're going to get the

most bang for your buck when you're

either building your own generative AI

tools or you're buying or procuring

generative AI goods and services

uh and then second to last with

self-improvement as an executive leader

if you're not using generative AI to

improve yourself somebody else is namely

your competition and you're gonna get

left behind and then lastly the slide

that we just did was ethics and courage

which means whatever happens whatever's

coming if you if you compromise your

ethics you might regret it but if you

don't compromise your ethics you will

not regret it so choose the path of

least regret this is um actually a

mantra that I live by is what decision

will I regret least in the long run and

then be courageous about it because

again this is a bold time with a

tremendous amount of opportunity but uh

you know fortune favors the Bold so

thanks for watching I hope you got a lot

out of this thank you very much and uh

again reach out on LinkedIn or patreon

and let's talk if you want to if you

want to talk about any of these topics

cheers