What AI will do to corporate hierarchies – Thomas Malone

Thomas W. Malone is the Patrick J. McGovern (1959) Professor of Management, a Professor of Information Technology

From The Wall Street Journal 

Ask people about artificial intelligence, and the discussion will most often turn to jobs: which ones will be eliminated and which ones will be created.

But regardless of what happens to the number of jobs, there’s another question that is less often discussed but crucial for maximizing both productivity and employee morale: How is AI likely to change the structure of business hierarchies themselves?

The obvious answer may be that the management structure is likely to get more centralized and rigid. After all, AI will help managers track more detailed data about everything their subordinates are doing, which should make it easier—and more inviting—to exercise stricter controls.

This will no doubt be true in some cases. But look more closely, and I believe the opposite is much more likely to happen in many cases. That’s because when AI does the routine tasks, much of the remaining nonroutine work is likely to be done in loose “adhocracies,” ever-shifting groups of people with the combinations of skills needed for whatever problems arise.

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Are you ‘virtue signaling’? – David Rand, Jillian Jordan

David Rand, Associate Professor of Management Science and Brain and Cognitive Sciences, MIT Sloan School of Management

From The New York Times 

Expressions of moral outrage are playing a prominent role in contemporary debates about issues like sexual assault, immigration and police brutality. In response, there have been criticisms of expressions of outrage as mere “virtue signaling” — feigned righteousness intended to make the speaker appear superior by condemning others.

Clearly, feigned righteousness exists. We can all think of cases where people simulated or exaggerated feelings of outrage because they had a strategic reason to do so. Politicians on the campaign trail, for example, are frequent offenders.

So it may seem reasonable to ask, whenever someone is expressing indignation, “Is she genuinely outraged or just virtue signaling?” But in many cases this question is misguided, for the answer is often “both.”

You may not realize it, but distinguishing between genuine and strategic expressions of indignation assumes a particular scientific theory: namely, that there are two separable psychological systems that shape expressions of moral outrage. One is a “genuine” system that evaluates a transgression in light of our moral values and determines what level of outrage we actually feel. The other is a “strategic” system that evaluates our social context and determines what level of outrage will look best to others. Authentic expressions of outrage involve only the first system, whereas virtue signaling involves the second system.

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The battle over the driving experience is heating up and will be won in software – Lou Shipley

MIT Sloan Lecturer Lou Shipley

MIT Sloan Lecturer Lou Shipley

From TechCrunch 

Sirius XM’s recent all-stock $3.5-billion purchase of the music-streaming service Pandora  raised a lot of eyebrows. A big question was why Sirius paid so much. Is Pandora’s music library and customer base really worth that amount? The answer is that this was a strategic move by Sirius in a battle that is far bigger than radio. The real battle, which will become much more visible in the coming years, is over the driving experience.

People spend a lot of time commuting in their cars. That time is fixed and won’t likely change. However, what is changing is the way we drive. We’re already seeing many new cars with driver-assist features, and automakers (and tech companies) are working hard to bring fully autonomous cars to the market as quickly as possible. New cars today already contain an average of 100 million lines of code that can be updated to increase driver-assist options, and some automakers like Tesla already offer an “autonomous” mode on highways.

According to the Brookings Institute, one-quarter of all cars will be autonomous by 2040, and IHS predicts all cars will be autonomous after 2050. Those are conservative estimates, as we are likely to see major changes in the next 10 years.

These changes will impact the driving experience. As cars become more autonomous, we can do more than simply listen to music or podcasts. We may be able to watch videos, surf the web and more. The value of car real estate is already valuable, but it’s going to skyrocket as we change the way people consume media while driving.

The Pandora acquisition was a strategic move by Sirius to gain the necessary assets so that it won’t fall behind in this space — and to get into the fast-growing music-streaming business, where users consume music at home, work and play. While Pandora’s music library is arguably second-tier, it’s also good enough that it can provide pretty much every artist most people want. This is often how high-priced mergers happen — one party is concerned about falling behind and pays a premium to purchase the other company’s assets. It’s also a bet by Sirius about the driving experience of the future.

Read the full post at TechCrunch.

Lou Shipley is a Lecturer at the MIT Sloan School of Management. 

Why great leaders focus on mastering relationships – Douglas A. Ready

MIT Sloan Senior Lecturer Doug Ready

MIT Sloan Senior Lecturer Douglas A. Ready

From MIT Sloan Management Review

Great leaders are distinguished by their ability to master personal relationships.

“Without mastering collaborative relationships, both inside and outside the company, we won’t produce the outcomes needed to win our customers’ business.”

— Lori Beer, chief information officer, JPMorgan Chase

Mastering personal relationships that build trust and create a collaborative work environment is central to leadership effectiveness in the digital economy. This skill set distinguishes great leaders from merely good ones, based on my interviews with C-suite executives in companies around the world.

In a digital business environment, great leaders are those who appreciate and understand the power of technology and analytics. But that alone is insufficient. They must also have the skills and mindsets to bring together people from diverse businesses and functions to deliver superior customer outcomes. As Lori Beer, CIO at JPMorgan Chase, says:

“We don’t need everybody to know how to write the perfect API, but we do need people with a passion for working together to create an understanding of how those APIs, a blockchain, the cloud, AI, and machine learning can change the way you think about delivering services to our customers.”

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Christian Catalini: “Breaking Down the Libra Cryptocurrency”

Christian Catalini, co-creator of Libra and a professor at the MIT Sloan School of Management (on leave)

We hope you’ll tune in to the next installment of the MIT Sloan Experts Series

Join us on November 7 at 12 noon ET for a live conversation with Christian Catalini, co-creator of Libra and the Head Economist at Calibra, the Facebook subsidiary developing a wallet for Libra. Catalini, a professor at the MIT Sloan School (on leave) and an expert in blockchain, will explain how Libra works, how you will be able to use it once it goes live, and what Calibra is doing to address issues around privacy and security.

Michael Cusumano, Professor of Management at MIT Sloan and co-author of the book, The Business of Platforms: Strategy in the Age of Digital Competition, Innovation, and Power, among others, will weigh in on the political and regulatory challenges that Libra faces.

Scott Onder, Senior Managing Director, Social Ventures, at Mercy Corps, the humanitarian aid organization, also appears on the program to talk about Libra’s potential to bring financial services to the many people around the world who don’t use banks or other traditional institutions.

You will be able to view the live show by bookmarking this page and tuning in November 7 at 12 noon ET.

At the end of the show, Catalini will take questions from social media. If you’re joining us on the MIT Sloan Facebook page, submit your question in the comments. On Twitter, tag your questions with the hashtag #MITSloanExperts. Your question could be answered live on the air.