The new question for C-suite bosses: who’s in charge of AI?

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The client was not given the opportunity to put restrictions on the content or review it prior to publication. by BDCThe new question for C-suite bosses: who’s in charge of AI?Decisions about AI will impact how jobs and entire organizations are designedAuthor of the article:Last updated 13 minutes ago Everyone wants the potential career boost that comes from being the AI champion. Photo by JOSEP LAGO/AFP via Getty ImagesA new question is rattling global C-suites: Which executives are in charge of the company’s deployment of artificial intelligence?THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountAI stands to transform businesses, and the executives who spearhead that change put themselves at the centre of a company’s success story — and set themselves up for higher-profile roles down the road, executive recruiters say. Conversely, those who fumble an expensive AI rollout could get the boot. Those stakes, coupled with the wide scope of AI and recent calls for the big AI developers to tap the brakes, have top executives on edge.This advertisement has not loaded yet, but your article continues below.At Morgan Stanley, the bank has pivoted from having one person serve as company-wide AI chief to a more decentralized approach where two C-suite leaders, co-president Andy Saperstein and Michael Pizzi, global head of technology and operations, oversee the rollout at the executive level. The bank was an early adopter of OpenAI’s platform, but it’s now also working with Anthropic, Google and xAI, along with finance-focused AI startups like Hebbia and Samaya.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againDissatisfied with the pace of AI adoption at Pfizer Inc., chief executive Albert Bourla has shifted decision-making away from a handful of top executives and gave scientists and business-unit leaders more authority over how to deploy the technology. That coincided with changes in Pfizer’s top management, including the departure of the company’s chief digital and technology officer Lidia Fonseca, who had overseen efforts to enhance the drugmaker’s use of AI.Gartner projects that global spending on AI will likely increase 50 per cent to US$2.7 trillion this year, and half of CEOs polled by Boston Consulting Group said their jobs are on the line if they can’t get AI to pay off. Inside corporate boardrooms, CEOs and other senior leaders are debating decisions related to AI token budgets, model selection and workflow changes. Those decisions require collaboration across executive teams, involving the heads of finance, technology, operations, legal and human resources.This advertisement has not loaded yet, but your article continues below.About one in five companies has put AI strategy in the hands of a chief AI officer, according to Forrester Research. But that’s not a cure-all, according to executive advisers, because “when you put anyone in between all those groups you will cloud decision making and obscure roles and responsibilities,” said Janet Sherlock, the former chief digital and technology officer at Ralph Lauren. Such firmwide roles also “have a shelf life to them,” said Jeff McMillan, the former head of AI at Morgan Stanley who left the firm in January.Meanwhile, more than half of employees admit using unapproved AI tools on the job, according to a survey from cloud software company Okta, creating the potential for security breaches.“The drama is really high right now,” said Sherlock, who’s now an executive adviser. “I don’t know how many times I’ve been in discussions where the legal team is seen as the roadblock, or the IT department is viewed as being slow. We’ve made it way more complex than it needs to be.”Sherlock recalled a United States company listed on the Russell 3000 index that she analyzed as part of her doctoral research. The company’s chief AI officer clashed with the IT department about a platform purchased without the IT department’s approval. The supply-chain team, meanwhile, went rogue and covertly deployed its own solution. The duplication wasted millions, and the AI head later left the company. Sherlock couldn’t reveal the company’s name to protect the confidentiality of her research participants, but said such conflicts are common.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.One scenario cited by corporate AI advisers is when a CEO tells the company’s technology czar to move faster with more powerful tools. The chief financial officer, though, worries about blowing a hole in an AI budget that was set last year, before token spending skyrocketed. Ramp, which provides expense-management software for businesses, found overall spending on tokens by its customers has grown by nine times over the past year.“The CTOs are kind of caught between CEOs and CFOs,” said J.R. Storment, executive director of the Tokenomics Foundation, a consortium of companies including IBM Corp., JPMorgan Chase & Co. and Accenture Plc that was recently created to establish open industry standards around the economics of AI.At the same time, investors and boards of directors want to see returns on corporate AI investment. “That pressure generates tension” between leaders and those backing them, said Paul Cheek, chief executive of the AIDE Institute, an independent research company that measures AI adoption at large organizations.CEOs are starting to feel it. “The hard truth is that the marginal cost of productivity improvement has to match the marginal cost of the token,” Microsoft Corp. Chief executive Satya Nadella said on a podcast in June. In other words, the benefit to the business, measured by cost savings or efficiency improvements, has to equal or exceed the expense.This advertisement has not loaded yet, but your article continues below.Gaps between an emerging technology’s promise and its payoff aren’t new, said Vijay Gurbaxani, director of the Center for Digital Transformation at UC Irvine, who in that role has helped steer senior executives through big shifts for almost four decades. Historically, when a company deployed something new, like e-commerce or SaaS software, fellow executives would defer to the tech chief.AI is different, as there’s never before been a technology with such a broad scope. The CEO is the only one who can set clear expectations about AI’s potential across the business, said Eric Kutcher, chair of McKinsey & Co.’s North American operations. If that vision comes from the CTO or anyone else, “this thing is going nowhere,” Kutcher said in an interview. Not every part of the business will get the same investment, though, which requires difficult conversations with those who run lower-priority areas.The proliferation of AI agents across departments adds another level of complexity. “AI isn’t some application you log into to get work done — these are co-workers,” said Jonathan Kirschner, founder and chief executive of AIIR Consulting, a leadership advisory firm. That’s why Moderna Inc., the biotech firm, decided last year to merge its IT and human-resources departments.This advertisement has not loaded yet, but your article continues below.Decisions about AI will impact how jobs and entire organizations are designed, so HR leaders also play a big role, according to Brad Bell, who directs Cornell University’s Center for Advanced HR Studies.HR leaders have “an opportunity to showcase why we should be at the forefront of this strategy,” said Jessica Neal, the former chief talent officer at Netflix who’s now a startup adviser. “I see many CHROs stepping up to the plate, but others who aren’t ready.” According to IBM’s Institute for Business Value, a think tank, nearly half of organizations don’t involve the CHRO when defining their AI strategy.Having tech savvy helps. At consultant West Monroe, chief people officer Tanya Moore, an IBM veteran, sits on an AI steering committee with the firm’s CIO and its chief AI officer, with each responsible for one aspect of deployment: People, technology and strategy. They brief the CFO weekly and the CEO monthly, and have informal chats about deployment all the time.“The CHRO and the CIO are the new power couple when it comes to AI,” said Ted Moore, who leads the global human-resources practice at Russell Reynolds Associates, an executive recruitment and advisory firm. “They each own distinct pieces of this.”This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.Who owns which decisions isn’t always clear, said McMillan, the former Morgan Stanley AI head, who now advises corporate clients on AI deployment. But everyone wants the potential career boost that comes from being the AI champion. “It’s the ticket to the next level,” he said.One compromise approach is a hub and spoke model, where some AI decisions are made centrally — security and governance, say — while individual business units and function heads determine the best uses of AI for their particular patch, working with AI talent embedded inside each division. The chief AI officer in this case should be the CEO, and about three out of four corporate chiefs polled by BCG say they are the main decision makers on AI.“You need an orchestrator, someone who can not only set the vision but also bring the focus,” Kirschner said. “That’s the piece that is really important.”—With assistance from Madison Muller, Todd Gillespie, Jo Constantz and Nina Trentmann.We apologize, but this video has failed to load.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.