Customer Experience Depends On Structuring People to Manage Information
I first heard about “it” in a Harvard Business article in 2016 and subsequently have been asked about “it” by clients and colleagues alike. “It” is yet another entrant into the C-suite. “It“ (actually a she or he) is a Chief AI Officer (CAIO). That’s right a human Chief Artifical Intelligence Officer (not a machine or robot occupying an executive office).
The Transformational Power of AI
In his thought-provoking HBR article, Andrew Ng suggested artificial intelligence will produce social transformation on par with electricity from 100 years ago and the internet from approximately 20 years back. Andrew, the chief scientist at Chinese internet behemoth Baidu Inc., also linked the emergence of the internet with the evolution of the essential corporate position of Chief Information Officer (CIO). All of which set the frame for Andrew’s central argument:
“To the majority of companies that have data but lack deep AI knowledge, I recommend hiring a chief AI officer or a VP of AI. (Some chief data officers and forward-thinking CIOs are effectively taking on this role.) The benefit of a chief AI officer is having someone who can make sure AI gets applied across silos. Most companies have naturally developed siloed functions in order to specialize and become more efficient.”
We’ve Been Here Before
It is this “same logic” that drew my support for the chief customer officer (CCO) concept around 2006. For historical reference, the first customer officer, Jack Chambers, was appointed in 1999 at Texas New Mexico Power but the role didn’t gain significant visibility for many of us until at least 2003, when a small but impressive group of CCO’s began to surface (e.g. Jeff Lewis at Monster.com and Marissa Peterson at Sun Microsystems). In the early days of the CCO movement, the case was being made (and continues to be made today) that Chief Customer Officers are needed to “break down silos” and “focus on enterprise-wide strategy placing the customer at the center of all corporate decision-making.”
Decentralized and Nimble
Despite the general attractiveness of placing senior level leaders at the helm of enterprise-wide efforts, I’ve found myself resistant to the slowly emerging Chief Artificial Intelligence Officer (CAIO) movement. It wasn’t until I read 2017 HBR article from Kristian Hammond that my unsettled feeling was given voice. Here is Kristian’s key thesis posited in his article so aptly titled, Please Don’t Hire a Chief Artificial Intelligence Officer:
“It’s not that I doubt AI’s usefulness. I have spent my entire professional life working in the field. Far from being a skeptic, I am a rabid true believer. However, I also believe that the effective deployment of AI in the enterprise requires a focus on achieving business goals. Rushing towards an ‘AI strategy’” and hiring someone with technical skills in AI to lead the charge might seem in tune with the current trends, but it ignores the reality that innovation initiatives only succeed when there is a solid understanding of actual business problems and goals. For AI to work in the enterprise, the goals of the enterprise must be the driving force.”
From my vantage point, AI is a monstrously powerful tool baked into the fiber of all aspects of data-savvy companies. It is best managed by agile teams that leverage Artificial Intelligence as a solutions and innovation tool. Neil Jacobstein the head of artificial intelligence and robotics at Singularity University went further by telling the Wall Street Journal that:
“It’s very important to match the speed of the technology with the nimbleness of the teams. And having a centralized AI guru at the top, where everybody has to ask questions of that person, is unlikely to be as fast and effective as having a decentralized organization with powerful teams. Centralizing AI across an enterprise might prove unwieldy compared to having small teams.”
AI Itself Can’t Solve This
Invariably large, data-rich organizations will wrestle with the question “to add or not to add” a CAIO. Until I hear a more convincing case for this new position in the C-Suite I doubt I will be recommending the change.
The big takeaway for all of us is an appreciation of the transformational power and potential of big data, machine learning, and artificial intelligence. Also, it is the awareness that machines won’t likely solve issues like how to structure our teams and leaders to use that very data as we pursue key business objectives. Some things can only be left to the intuition and modifications of people!
Here’s Why Bitcoin Won’t Replace Gold So Easily
What a week it was.
First and foremost, I’d like to acknowledge the horrific mass shooting that occurred in Las Vegas, the deadliest in modern American history. On behalf of everyone at U.S. Global Investors, I extend my sincerest and most heartfelt condolences to the victims and their families.
The memory of the shooting was still fresh in people’s minds during last Tuesday’s Hollywood premiere of Blade Runner 2049, which nixed the usual red carpet and other glitz in light of the tragedy. Before the film, producers shared poignant words, saying that in times such as these, the arts are crucial now more than ever.
I had the distinct privilege to attend the premiere. My good friend Frank Giustra, whose production company Thunderbird Entertainment owns a stake in the Blade Runner franchise, was kind enough to invite me along. Despite the somber mood—a pivotal scene in the film even takes place in an irradiated Las Vegas—I thought Blade Runner 2049 was spectacular. Even if you’re not a fan of the original 1982 film, it’s still worth experiencing in theaters. Hans Zimmer and Benjamin Wallfisch’s synth-heavy score is especially haunting.
CNET recently published an interesting piece examining the accuracy of future tech as depicted in the original Blade Runner, from androids to flying cars to off-world travel read the article here.
Still in the Early Innings of Cryptocurrencies
Speaking of the future, I spoke on the topic of the blockchain last week at the Subscriber Investment Summit in Vancouver. My presentation focused on the future of mining—not just of gold and precious metals but also cryptocurrencies.
Believe it or not, there are upwards of 2,100 digital currencies being traded in the world right now, with a combined market cap of nearly $150 billion, according to Coinranking.com.
Obviously not all of these cryptos will survive. We’re still in the early innings. Last month I compared this exciting new digital world to the earliest days of the dotcom era, and just as there were winners and losers then, so too will there be winners and losers today. Although bitcoin and Ethereum appear to be the frontrunners right now, recall that only 20 years ago AOL and Yahoo! were poised to dominate the internet. How times have changed!
It will be interesting to see which coins emerge as the “Amazon” and “Google” of cryptocurrencies.
For now, Ethereum has some huge backers. The Enterprise Ethereum Alliance (EEA), according to its website, seeks to “learn from and build upon the only smart contract supporting blockchain currently running in real-world production—Ethereum.” The EEA includes several big-name financial and tech firms such as Credit Suisse, Intel, Microsoft and JPMorgan Chase, whose own CEO, Jamie Dimon, knocked cryptos a couple of weeks ago.
To learn more about the blockchain and cryptocurrencies, watch this engaging two-minute video.
Will Bitcoin Replace Gold?
Lately I’ve been seeing more and more headlines asking whether cryptos are “killing” gold. Would the gold price be higher today if massive amounts of money weren’t flowing into bitcoin? Both assets, after all, are sometimes favored as safe havens. They’re decentralized and accepted all over the world, 24 hours a day. Transactions are anonymous. Supply is limited.
But I don’t think for a second that cryptocurrencies will ever replace gold, for a number of reasons. For one, cryptos are strictly forms of currency, whereas gold has many other time-tested applications, from jewelry to dentistry to electronics.
Unlike cryptos, gold doesn’t require electricity to trade. This makes it especially useful in situations such as hurricane-ravished Puerto Rico, where 95 percent of people are reportedly still without power. Right now the island’s economy is cash-only. If you have gold jewelry or coins, they can be converted into cash—all without electricity or WiFi.
Finally, gold remains one of the most liquid assets, traded daily in well-established exchanges all around the globe. Every day, some £13.8 billion, or $18 billion, worth of physical gold are traded in London alone, according to the London Bullion Market Association (LBMA). The cryptocurrency market, although expanding rapidly, is not quite there yet.
I will admit, though, that bitcoin is energizing some investors, especially millennials, in ways that gold might have a hard time doing. The proof is all over the internet. You can find a number of TED Talks on bitcoin, cryptocurrencies and the blockchain, but to my knowledge, none is available on gold investing. YouTube is likewise bursting at the seams with videos on cryptos.
Bitcoin is up 350 percent for the year, Ethereum an unbelievable 3,600 percent. Gold, meanwhile, is up around 10 percent. Producers, as measured by the NYSE Arca Gold Miners Index, have gained 11.5 percent in 2017, 23 percent since its 52-week low in December 2016.
Look Past the Negativity to Find the Good News
The news is filled with negative headlines, and sometimes it’s challenging to stay positive. Take Friday’s jobs report. It showed that the U.S. lost 33,000 jobs in September, the first month in seven years that this happened. A weak report was expected because of Hurricane Irma, but no one could have guessed the losses would be this deep.
The jobs report wasn’t all bad news, however. For one, the decline is very likely temporary. Beyond that, a record 4.88 million Americans who were previously sitting out of the labor force found work last month. This helped the unemployment rate fall to 4.2 percent, a 16-year low.
There’s more that supports a stronger U.S. economy. As I shared with you last week, the Manufacturing ISM Purchasing Managers’ Index (PMI) rose to a 13-year high in September, indicating rapid expansion in the manufacturing industry. Factory orders were up during the month. Auto sales were up. Oil has stayed in the relatively low $50-a-barrel range, which is good for transportation and industrials, especially airlines. Small-cap stocks, as measured by the Russell 2000 Index, continue to climb above their 50-day and 200-day moving averages as excitement over tax reform intensifies.
These are among the reasons why I remain bullish.
One final note: Speaking on tax reform, Warren Buffett told CNBC last week that he’s waiting to sell assets until he knows the plan will go through. “I would feel kind of silly if I realized $1 billion worth of gains and paid $350 million in tax on it if I just waited a few months and would have paid $250 million,” he said.
It’s a fair comment, and I imagine other like-minded, forward-thinking investors, buyers and sellers will also wait to make huge transactions if they can help it. Tax reform isn’t a done deal, but I think it has a much better chance of being signed into law than a health care overhaul.
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