We’re aware of the over-hyped nature of some discussions about AI and also the real concerns about bias in applications of the technology. At the same time, regular Charter readers know that we also believe there is the potential for significant changes to our jobs, our organizational structures, and the playbook for great leadership and management.
One of the people most consistently exploring the practical nature of that potential is Ethan Mollick, associate professor at Wharton. Mollick has a new book on this topic out this week, Co-Intelligence, which we discussed with him a few days ago. Here is a transcript of that conversation, edited for clarity:
You write in the book that in your study of the videogame industry, the quality of the middle manager overseeing a game explained over a fifth of the game's eventual revenues. That was bigger than the effect of the entire senior management team, more than the designers who came up with the creative ideas for the game itself. How can organizations use generative AI to have more high-quality middle managers?
That's a really important question and one that a lot of organizations aren't thinking about enough, which is that what this does very well is that sort of decision support and coaching. The kind of stuff we teach in MBA programs, it does quite well. There are a lot of tricks that we teach people to be good managers, about how to communicate with people, how to run sessions like pre-mortems where you imagine how a project might fail in advance and then you go through it. The AI can run some of those exercises. So it works fairly well. As a coach, we have some evidence from a controlled study in Kenya that for small- to medium-size business owners, that the best performers get 20% boosted profitability, getting AI advice. Part of this is about empowering middle managers, not necessarily replacing them, and part of this is where are the skill gaps? Middle managers strike me as almost like doctors, which is that you do many tasks, some of which are thankless, but are important for your main task. Many middle managers are good at one or two things, but not at everything. So part of the question you want to ask is: what does this free you up from? Where are your weak spots? Generalist positions are ones that can benefit the most from AI in a lot of ways.