How to replace your CEO with a robot

Drop-in business talent (from DLR on Flickr — https://www.flickr.com/photos/dlr_de/14221643946)

First: Changing the time horizon

We don’t have an Internet of Things; we have a lot of things, on the Internet. But that’s quickly changing. Big industrial companies like General Electric and Siemens are connecting all their devices, providing real-time data on the state of an organization.

Dirty Data Lake — Pic by Michael S on Flickr — https://www.flickr.com/photos/mjsciald/15151747766

Second: The new liability

When the company can know everything immediately, new kinds of liability emerge.

  • Insider trading: Financial filings have to happen constantly. Insider trading is when someone with foreknowledge of matters that might affect stock price acts on those things before the general public can do so. The window of opportunity for insider trading is huge when insight happens in real time but filings happen quarterly.
  • Negligence: Courts generally recognize negligence when someone didn’t exercise best practices based on what they knew at the time. Real-time, connected companies no longer have the excuse, “I didn’t know this was happening.” Whether it’s fraud, or discrimination in HR, or embezzlement, or antitrust violations, or myriad other white-collar crimes, as algorithms get better it will be harder for executives to use lack of knowledge as an excuse.

Third: Conditions of insurance

In 2014, in the U.S. alone, companies spent $2.9B to insure their directors and officers against “alledged wrongful acts.” The number of ways that officers can be held liable increases vastly when the enterprise is connected and running in real time, but its humans are disconnected and running at human speed.

Fourth: From fear to greed and power

A smart, cynical salesperson I once knew told me people do things for four reasons: They want to get laid, paid, made, or unafraid. The initial motivation for bringing this kind of company-wide algorithm is the fear of punishment or retaliation when someone is wronged. But given what such an algorithm might do, it will quickly appeal to other motivations.

Fifth: The machine board member

By this point, algorithms will have a seat at the boardroom table. Executives will increasingly check with those algorithms, which will handle much of the productivity-centric busy-work. Kevin Kelly talks about this in his new book, The Inevitable:

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Writer, speaker, accelerant. Intersection of tech & society. Strata, Startupfest, Bitnorth, FWD50. Lean Analytics, Tilt the Windmill, HBS, Just Evil Enough.

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Alistair Croll

Alistair Croll

Writer, speaker, accelerant. Intersection of tech & society. Strata, Startupfest, Bitnorth, FWD50. Lean Analytics, Tilt the Windmill, HBS, Just Evil Enough.