What AI-Driven Decision Making Looks Like | Eric Colson writes a provocative piece that advocates handing over data-driven decision making to AI in a strangely affectless writing style

Bringing AI into the Workflow

We need to evolve further, and bring AI into the workflow as a primary processor of data. For routine decisions that only rely on structured data, we’re better off delegating decisions to AI. AI is less prone to human’s cognitive bias. (There is a very real risk of using biased data that may cause AI to find specious relationships that are unfair. Be sure to understand how the data is generated in addition to how it is used.) AI can be trained to find segments in the population that best explain variance at fine-grain levels even if they are unintuitive to our human perceptions. AI has no problem dealing with thousands or even millions of groupings. And AI is more than comfortable working with nonlinear relationships, be they exponential, power laws, geometric series, binomial distributions, or otherwise.

This workflow better leverages the information contained in the data and is more consistent and objective in its decisions. It can better determine which ad creative is most effective, the optimal inventory levels to set, or which financial investments to make.

While humans are removed from this workflow, it’s important to note that mere automation is not the goal of an AI-driven workflow. Sure, it may reduce costs, but that’s only an incremental benefit. The value of AI is making better decisions than what humans alone can do. This creates step-change improvement in efficiency and enables new capabilities.

Colson goes on to qualify this position with a refinement that creates a ‘Centaur’ of AI + human:

Leveraging both AI and Human processors in the workflow

Removing humans from workflows that only involve the processing of structure data does not mean that humans are obsolete. There are many business decisions that depend on more than just structured data. Vision statements, company strategies, corporate values, market dynamics all are examples of information that is only available in our minds and transmitted through culture and other forms of non-digital communication. This information is inaccessible to AI and extremely relevant to business decisions.

Fine. It’s inevitable. And at some not too distant date when AI starts to perform better at the judgment step, by learning to synthesize nondigital inputs, the last human can leave the building and turn off the lights.

You’re Hired. Now Wear This Headset to Learn the Job. | Karen Weise starts out writing a piece about using a Microsoft Hololens to learn new skills in a manufacturing context, and then veers into a briefing book about Microsoft’s efforts for the frontline workforce, in general:

When Toby Bouska Jr. started assembling cabs for Kenworth semitrucks last year, he learned the ropes by observing longtime workers at the factory. But it wasn’t exactly engaging, and he didn’t get much practice doing the job himself.

“It’s them doing the job, and you just have to watch,” said Mr. Bouska, 21, who works at Kenworth’s plant in Chillicothe. “I’m not really good at just sitting there watching.”

But then his managers had him train in a new way: with a high-tech headset. They gave him a Microsoft HoloLens, a device that blends digital imagery with the real world. When he wore the headset, it overlaid digital arrows and diagrams over the parts he was looking at, helping to guide his work.

“With the HoloLens, it’s just you and the directions,” Mr. Bouska said. He said he had picked up his first new task in about 20 minutes.

After the success with Mr. Bouska’s training, Kenworth’s parent company, Paccar, has ordered 50 of the devices. Five will be coming to the Chillicothe plant, which employs more than 2,000 workers, and the manager plans to use them to train employees on at least two dozen tasks.

The frontline is rapidly being transitioned away from consumer communications into purpose-built solutions:

Technology already surrounds many frontline workers, but many of these workers do not even have a corporate email account, so they create workarounds to communicate. Team Inc., a company that performs maintenance and repairs at industrial sites like refineries and pipelines, realized last year that almost half of its field technicians used personal email accounts and cellphones to communicate, said Tracy Terrell, Team’s chief information officer. The company’s leaders decided that was too risky.

“We don’t want to be emailing to Yahoo accounts or sending technical information via text, because that’s kind of our trade secret,” Mr. Terrell said.

Any new tool has to be as easy as consumer apps for workers to adopt them, he said. His company’s field technicians can have little patience for impractical solutions, so his team has been easing them into a version of Microsoft Teams, a messaging platform, designed specifically for firstline workers.

The two billion frontline workers represent a huge new marketplace, and Microsoft is pushing hard.

I just hope they shrink the Hololens down to a regular set of safety glasses.

[I wrote about Microsoft’s frontline push in Continuously Discontinuous.]

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The Four Biggest Challenges Digital Platforms Need to Address | Geoffrey Parker, Marshall Van Alstyne, and Peter Evans, the convenors of this week’s MIT Platform Summit (yes, I will be attending), lay out their view on the challenges for platforms: new regulatory constraints, growth pressures, the shift from B2C to enterprise markets, and technology disruption. I’ve picked an excerpt of the discussion of about how established firms — incumbents in various areas — are failing to adapt to the new world order:

We continue to see significant gaps in incumbent organizations’ capacity to interface and negotiate with platform companies, and to replicate their offerings. These gaps fall into three primary areas. One is the ability to anticipate which markets will transform. Most executives struggle to fully grasp the nature of “inverted firms,” those that move production from inside the organization to outside. They also have yet to learn how to make the transformation happen.

Second is the widely noted shortage of data scientists. Platforms are naturally data rich and often grow up with robust data warehousing, analytics, and experimentation infrastructure. Incumbents have much catching up to do to replicate these capabilities and apply them effectively.

A third area where incumbents have gaps is their ability to coordinate external players as effectively as platforms. Traditional firms have long organized supply chains, but those tend to be known, stable relationships instead of the uncharted, more dynamic supply-and-demand relationships that platforms foster.

Nevertheless, traditional firms have valuable experience to draw upon. They’ve long had to navigate complex regulatory environments and tend to have a significant lead over their platform partners and competitors when it comes to dealing with government. Don’t count them out of the race yet; there’s a long way to go.

However, as the difficulties that Jet.com is having at Walmart demonstrate, it’s very hard to adopt the new business thinking and organizational evolution needed to operate in a platform economy.

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Quote of the Day

There ought to be a future we can choose. It’s up to us to find it.

| Katsuhiro Otomo, Akira

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Elsewhere

Needed: a trillion more trees | Dylan Matthews (via newsletter) reports on new revelations about carbon harvesting by reforestation:

A new Science study released last week argued that we’ve been vastly underestimating reforestation as a tool for combating climate change. The study estimates that increasing global forest cover by one-third would store 205 billion metric tons of greenhouse gases; something like half that amount could be taken from the atmosphere in the process.

Given that the Intergovernmental Panel on Climate Change has said we need to remove up to 1 trillion tons by 2100, large-scale reforestation looks like it could get us at least a tenth of the way there. It’s not a complete solution, but it’s a big piece.

Other climate scientists have argued the study is too optimistic — but there seems to be broad agreement that reforestation (and preventing deforestation) is a cost-effective solution for storing carbon. One relatively careful estimate found that donations to the Coalition for Rainforest Nations, which promotes reforestation and fights deforestation in tropical countries, can prevent a ton of CO2 from entering the atmosphere at a cost of about 12 cents, or a high-end estimate of 72 cents.

That’s really, really good compared to most other carbon mitigation methods, and it’s low both because of CfRN’s effectiveness as an organization, and forests’ effectiveness as a carbon removal and storage tool.

The authors of the Science study argue that planting 1 trillion new trees could be done for $300 billion, based on current costs and assuming “immense efficiency and effectiveness.” That’s a lot of money, and probably too low an estimate to boot. But if paying hundreds of billions of dollars to landowners as an incentive to plant trees can efficiently create a worldwide carbon storage system, it’s probably worth doing — and worthwhile for philanthropists to invest in.

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Americans Shouldn’t Have to Drive, but the Law Insists on It | Gregory Shill makes the argument that the laws in the US compel us into car ownership:

It’s no secret that American public policy throughout the 20th century endorsed the car — for instance, by building a massive network of urban and interstate highways at public expense. Less well understood is how the legal framework governing American life enforces dependency on the automobile. To begin with, mundane road regulations embed automobile supremacy into federal, state, and local law. But inequities in traffic regulation are only the beginning. Land-use law, criminal law, torts, insurance, vehicle safety regulations, even the tax code — all these sources of law provide rewards to cooperate with what has become the dominant transport mode, and punishment for those who defy it.

Another aspect of how the system is rigged, and in this case, it is rigged against the pedestrian, and by extension, all of us once we step out of the car.