Hey, What a great article you wrote! This is actually going to be a great complimentary piece of a topic on my to write list (not my personal Substack, but for my consultancy). A CEO or any leader they would never be able to make the absolute correct decision, But only the best they know under the circumstances (not to mention they are under stress most of the time, which, as you said in your article will limit their ability to process information).
A lot of times you only need a few wrong decisions to be made to waste few millions of funding. So the question is, is there anyway for us to resolve this problem or should we started to consider using AI as our CEOs?
You question is simple but the answer is complex. One of the biggest problems of a CEO is that the information they receive is sanitized and filtered. That problem is compounded by subordinates, subconsciously or consciously, tailoring their input to what they think the CEO wants to hear. For the CEO, the core lesson from the first two foundation essays is to gather information from other perspectives and to be humble about one’s own knowledge. As for the last issue I mentioned, it’s important that a CEO has some high agency voices around them that aren’t afraid to give contrary input in meetings.
My top advice for any CEO or leader, which will be part of a future essay, is to know that errors are inevitable given the state of imperfect information. The ‘solution’ is to build error-correcting mechanisms into the company culture and practices. Decision makers should be searching for mistakes and fixing them. A compatible situation is top stock pickers. They will have more clunkers than stars. They dump the clunkers quickly and hang onto the stars.
I’ve seen this philosophy in top performing offices. They will quickly fire new hires that aren’t panning out and focus their resources on training the new hires that are showing potential. Most corporate cultures tend to hang onto their clunker decisions due to rose tinted glasses or due to a perceived need to save the decision maker’s reputation.
As for AI, at least in the short term it would make for a poor CEO. The output tends to be homogenized and leans toward conventional wisdom. That would make it a poor candidate for recognizing changes in the market and initiating new strategies. Granted, that’s a problem with human CEO’s as well.
Seconding this. 'The problem is compounded by subordinates who, subconsciously or consciously, tailor their input to what they think the CEO wants to hear.' Additionally, I question how much 'other perspective' a person can truly adopt, considering we are all born and raised with inherent biases.
I wrote an article on how to address laziness within a company. I suggested that the best approach is to exploit human nature, specifically self-interest. Rather than concentrating power in the hands of a few C-level executives, incentives could be used to encourage employees to contribute more and think in the company's best interest, allowing them to thrive alongside the company.
'They will quickly fire new hires that aren’t working out and focus their resources on training those showing potential.' This approach might work better in the US than in Europe :D. Here, we need proper justification to fire someone, even if they are a low performer.
Regarding AI as a CEO, I've been exploring this for a while and believe it's more likely to happen within the next three years than most people think. It's not just me; some experts in AI share this view. I'm happy to share more if you're interested in knowing more.
Crikey this is fascinating stuff. Thank you.
Hey, What a great article you wrote! This is actually going to be a great complimentary piece of a topic on my to write list (not my personal Substack, but for my consultancy). A CEO or any leader they would never be able to make the absolute correct decision, But only the best they know under the circumstances (not to mention they are under stress most of the time, which, as you said in your article will limit their ability to process information).
A lot of times you only need a few wrong decisions to be made to waste few millions of funding. So the question is, is there anyway for us to resolve this problem or should we started to consider using AI as our CEOs?
Thank you for the kind words!
You question is simple but the answer is complex. One of the biggest problems of a CEO is that the information they receive is sanitized and filtered. That problem is compounded by subordinates, subconsciously or consciously, tailoring their input to what they think the CEO wants to hear. For the CEO, the core lesson from the first two foundation essays is to gather information from other perspectives and to be humble about one’s own knowledge. As for the last issue I mentioned, it’s important that a CEO has some high agency voices around them that aren’t afraid to give contrary input in meetings.
My top advice for any CEO or leader, which will be part of a future essay, is to know that errors are inevitable given the state of imperfect information. The ‘solution’ is to build error-correcting mechanisms into the company culture and practices. Decision makers should be searching for mistakes and fixing them. A compatible situation is top stock pickers. They will have more clunkers than stars. They dump the clunkers quickly and hang onto the stars.
I’ve seen this philosophy in top performing offices. They will quickly fire new hires that aren’t panning out and focus their resources on training the new hires that are showing potential. Most corporate cultures tend to hang onto their clunker decisions due to rose tinted glasses or due to a perceived need to save the decision maker’s reputation.
As for AI, at least in the short term it would make for a poor CEO. The output tends to be homogenized and leans toward conventional wisdom. That would make it a poor candidate for recognizing changes in the market and initiating new strategies. Granted, that’s a problem with human CEO’s as well.
Seconding this. 'The problem is compounded by subordinates who, subconsciously or consciously, tailor their input to what they think the CEO wants to hear.' Additionally, I question how much 'other perspective' a person can truly adopt, considering we are all born and raised with inherent biases.
I wrote an article on how to address laziness within a company. I suggested that the best approach is to exploit human nature, specifically self-interest. Rather than concentrating power in the hands of a few C-level executives, incentives could be used to encourage employees to contribute more and think in the company's best interest, allowing them to thrive alongside the company.
'They will quickly fire new hires that aren’t working out and focus their resources on training those showing potential.' This approach might work better in the US than in Europe :D. Here, we need proper justification to fire someone, even if they are a low performer.
Regarding AI as a CEO, I've been exploring this for a while and believe it's more likely to happen within the next three years than most people think. It's not just me; some experts in AI share this view. I'm happy to share more if you're interested in knowing more.