Generative AI: fear, inspiration and dilemmas from the CIO-Suite
Image generated using Microsoft Copilot AI
In May, I attended a closed-door CIO roundtable at a corporate economic forum where Fortune 100 companies gave us a peek into how Generative AI is being adopted in their enterprises. Their frank discussion showed just how disruptive the rapid pace of AI advancements and its risks have been – and what the transformative potential is for large enterprises and their supply chain partners.
Last month I participated in a closed door CIO roundtable on Generative AI (AGI) in supply chains. The session included CIOs from Fortune 100 companies, major corporations, and a few key suppliers. Industries ranged from tech firms to utilities.
My goal was to bring AI transformation insights from the C-Suite back to my B2B clients. The discussions ranged widely but centered on two poles: the fear of the unknown and the excitement of the potential for scalable value creation.
AGI risks, fears and dilemmas in the CIO-Suite
Major companies are leading and learning simultaneously, in real time.
My biggest aha from this conversation: even companies with decade+ investments at the forefront of generative AI feel they are playing catchup to the explosive pace of AI advancements, particularly with respect to consumer-available LLM capabilities. And companies at massive scale who have the potential to make serious AGI investments are grappling with where to invest and use it at scale.
A very human fear of AI often drives the corporate bus.
The conversation about Generative AI began and ended with acknowledging the very human fear of the moment. As one CIO put it, “at the lower levels of the organization, everyone thinks they're getting fired by AI.” Even the C-Suite is grappling with how to engage with AGI, starting with their personal use of LLMs like ChatGPT. But proximity to the C-Suite did not necessarily mean comfort with the notion of building infrastructure on AGI. CIOs discussed getting their peers and themselves more proximate to AGI, even in small tactical ways like greater personal use of LLMs like ChatGPT.
The Boardroom is getting noisy.
CIOs agreed that their boards of directors’ fevered demand for speedy AI adoption is leading to frequent and sometimes unhelpful board-to-business engagements. Directors, bombarded with information about AGI, are demanding progress. One CIO shared that they have participated in multiple board meetings over the span of just weeks where they had previously never participated in a live board meeting. However, most agreed that their directors struggle to understand the intricacies – and sometimes the basics – of AGI. This is a clear risk for organizations making or preparing to make significant capital investments in AGI.
Risk management in AI adoption
CIOs are managing in real-time the risk to their data security and trade secrets from the use of AGI tool implementation, whether at a corporate systems level or by individual employees using consumer-facing tools without proper governance. And that governance encompasses a number of issues beyond their own data security to the management of their customers’ personally identifiable information and compliance with standards like the EU’s GDPR. Despite some smaller-scale successes, corporate IT leaders haven’t solved the data risk and infrastructure challenges that come with widespread AI implementation.
AGI leadership, mindsets and opportunities in the CIO-Suite
It wasn’t all fear and loathing in the room. In contrast, CIOs reflected their and their companies’ leadership positions in advancing AI development and deployment. Some key themes:
Hunting for business value from AGI
CIOs are focused on how AGI can create new scalable business opportunities. Most were looking beyond what one CIO positioned as “mere optimization” of or “superficial addition” to existing workflows and operations, and towards new business opportunities that would fundamentally transform their business operations fundamentally. Most agreed this would be an important determining factor in corporations’ sustainability in the age of AGI.
AI-first leadership
Some voices in the room spoke to being all-in on the transition to an AI-centric enterprise. One CIO representing a burgeoning AI market leader made the comparison to the cloud transition of the 2010s, sharing an anecdote of their company’s successful transition to a cloud-first product company. In that transition their CEO mandated a cloud-first development environment. The prior CEO had allowed cloud-first development as an 80%-of-the-time rule. Unfortunately in that environment too many product leaders saw themselves in the 20%, which hampered the pace of change. The new CEO’s mandate of 100% cloud-first product development allowed the transformation to occur. This leadership “toughness at the top” was something espoused by a few participants looking towards the transformational benefits in the age of AGI.
Forging ahead on high ROI opportunities
Participants noted the already significant changes happening in business processes like customer development and call centers, for example, as an area to begin creating immediate benefit. CIOs discussed with both excitement and caution the prevalence of proof-of-concept projects and hackathons to kickstart AI initiatives in these areas. Noting the risk of such efforts draining focus and resources, they were supporting experimentation where warranted by the business case for future value.
How suppliers to big corporations can win
CIOs acknowledged that the collision of fierce appetite for AGI innovation and risks creates a ripe environment for informed suppliers to step in with partnership on clear, value-driven AI solutions. A few key areas that were raised for solutioning:
Skilled AGI talent: Corporations are purchasing contract labor in emerging areas like Prompt Engineering which require skills that are feasibly learnable in relatively short time periods and create an opportunity for third party firms;
Targeted Projects: Companies are getting bogged down by expensive “proof of concept” AGI projects that CIOs worry will eat organizational resources. Third party firms with known, tested, secure AGI solutions are positioned to help protect corporations’ costs while helping them find footing in their AGI transformations;
Platform participation: As companies transform with AI, they will increasingly resemble platform companies. Suppliers should understand these companies’ platforms now and find ways to build in and participate in their ecosystems;
Risk mitigation: The need to audit, measure and understand risk exposure to areas like data privacy and trade secrets is prevalent across industries and ripe for third party support.
Looking Ahead
The time is now for businesses of any size to engage and partner with major corporations in their AI transformation. Fear and risk will create pause, but they also create the opportunity to act in this space. Seeing how CIO leaders at major corporations are dealing with the Generative AI age reveals that they are far from having figured it out. Businesses who are engaging fully with their own process of AGI transformation will be able to take advantage of the opportunity to meet major corporations as partners.
– Chris Genteel
If you need help driving your company’s generative AI strategy contact Glidelane to see how we can help.