Thinkers & Ideas Power and Prediction with Joshua Gans
Nov 15, 2022
Joshua Gans, a Professor of Strategic Management at the Rotman School of Management, discusses the transformative potential of AI alongside Martin Reeves. They delve into the need for organizations to rethink decision-making processes, cautioning against overreliance on rigid rules. Gans emphasizes the interplay between prediction, human judgment, and AI, asserting that effective decision-making requires human involvement. The conversation highlights the gradual shift in AI integration and the necessity for quality insights over data access to drive successful outcomes.
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AI Is Primarily Cheaper Prediction
- Recent ML advances are essentially huge reductions in the cost of prediction.
- Joshua Gans argues businesses should view AI as cheaper prediction, not magic intelligence.
Rules Hide Missed Decision Opportunities
- Organizations convert hard-to-predict decisions into rules to stay resilient.
- Gans warns AI forces firms to re-open those rules because prediction becomes available.
Reopen Rules When Prediction Improves
- Do reassess routine rules and consider turning them back into decisions when prediction becomes viable.
- Focus first on clear decision points, then tackle rule changes that could yield transformational returns.