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Prediction is NOT  Decision-Making – Avi Goldfarb - New Orleans ScaleUp Summit

Posted by Douglas A Wick on Mon, Jun 4, 2018

scaleup-blueWhat is AI? How can your business take advantage of AI to be more efficient and productive?

Avi Goldfarb, co-author of the Prediction Machine, placed the public’s view of AI into two extremes:

C3PO_C3PO – Optimistic, you simply tell it what to do.


Terminator – Pessimistic, foretelling the extinction of humanity

Terminator - ArniejpgBefore you get too concerned, AI while a prediction tool, it is not decision-making.

AI is a Tool to do a particular task in a workflow.

Goldfarb shared what computers did to reduce the cost of simple arithmetic.  As the const of semi-conductors fell so did the demand for computers rise. He noted that when there is a price reduction, demand goes up.

The same is true with Artificial Intelligence. Avi Goldfarb Cost of ArithmeticAs the amount of data increases it changes the value of the inputs increases.   Prediction gets better with better data.

The car crash scene from  the movie I Robot, starring Wil Smith, offers insight into what Artificial Intelligence is helping organizations do, and how you can use it in your business.

AI is a tool.  A tool to predict.  As you can see by the definition of prediction.  It’s using information you do have to generate information you don’t have.Avi Goldfarb PREDICTION DEF (AI)

Avi Goldfarb Cost of Prediction (AI)Prediction inputs into decision making, and decision-making is prevalent everywhere in your business.  However Goldfarb noted Prediction is not decision-making.

Decision-Making relies on judgement.  Judgment is the process of determining what the reward is to a particular action in a particular environment,. 

Avi Goldfarb JUDGEMENT DEF (AI)The example in the movie I Robot, shares that a human might not have made the same choice the robot did (AI).  However this robot used it’s judgement based on the possible reward of saving Wil Smith in the particular environment, a sinking car, and the possible outcomes.    

AI Possibilities for Your Business

What we can do and will do with AI is growing.  Goldfarb indicated we are only 6 years into the emergence of AI.

Goldfarb shared an AI canvas for helping you determine where AI can help you with prediction in your business.

Avi Goldfarb Art Intel Canvas (AI)He recommended reviewing all your processes and discovering where you are currently making predictions.  At that point you can, streamline, and improve productivity in your business by replacing this portion of the process with AI.

Avi Goldfarb Art Intel Canvas Example (AI)

One example:  In 2000 at the height of its US Cash Equities trading desk, Goldman Sachs NY headquarters employed 600 traders buying and selling stock on orders from investment bank’s large customers.  Today, due to AI, Sachs has just two equity traders left.

Wouldn’t it be nice to see these kind of rewards in your business?  You can when you search for where you make predictions in your processes.

Goldfarb didn’t see AI negatively impacting employment dramatically.  What he’s seen, is, company’s removing people in the predicting aspect of their business, then placing them in decision-making roles. There, their human capabilities are utilized to make better decisions.

Avi Goldfarb Flow Chart Judgment (AI)The possibilities for AI are intriguing, and mind expanding. 

Amazon’s Predictive Use of AI

Amazon is already planning to send products to customers before they know they need or want it through AI. 

Right now when you go to Amazon, it makes suggestions on what you should buy once you put in your search item.  Currently the success rate is 1/20. When you compare this to exactly what Sears was doing 20 years ago with a catalog, it’s the same outcome.  As predictions get better, Amazon will start sending you what you want before you know you wanted it. 

Avi Goldfarb Now Hiring - You are Hired (AI)Goldfarb shared HR exists because hiring processes are bad.  With AI he predicts you won’t have to wait for people to apply. Utilizing a data base like LinkedIn’s, you can reach and hire people before they even apply.  Wouldn’t that revolutionize hiring at your organization?

AI’s Importance

As proof of AI’s growth and importance, Goldfarb shared where someone sits frequently identifies importance in an organization.  People who sit next to the boss are considered more important.  At Google’s AI researchers all have desks closest to the boss.

China's plan to BE BEST In AIGlobally China has made a goal to be the best in the world at AI by 2030.  Valdimir Putin predicts who ever controls AI will control the world.

Daniel Kahneman, Author of Thinking Fast & Slow and a Nobel prize winner for behavioral economics, predicts, “I do not think that there is very much that we can do that computers will not eventually [learn] to do.”

Growth demands Strategic Discipline.

Positioning Systems helps your business grow through the Four Decisions: People, Strategy, Execution, Cash.  We’ll help your business achieve Execution Excellence.

Each of the Four Decisions Produces a specific outcome. In our coaching process, we repeat examples and the definitions  of the Four Decisions frequently to make sure our customers remember the value and result each decision produces for your business.












If you’re business is failing to achieve industry leading results in any of these areas, that Decision should be your One Thing.

Positioning Systems helps mid-sized ($5M - $250M) business Scale-UP. We align your business to focus on Your One Thing!  To achieve growth, you need to evolve in today’s rapidly changing economic environment.  Are you avoiding a conversation with yourself on how to can successfully grow your business? Contact to Scale Up your business! Take our Four Decisions Needs Assessment to discover how your business measures against other Scaled Up companies. We’ll contact you.

David Meerman Scott New Rules of Marketing &  PRNext Blog – David Meerman Scott – Zones of Influence

Marketing and social media dynamics continue to grow and influence your business growth.  David Meerman Scott is an expert on achieving social media impact. A powerful tool to influence prospects and customers is getting into their zone of influence. What is a zone of influence? How you can use it to grow your business?  Examples in our next blog.  

Topics: Execution, Prediction, ScaleUp Summit Learning, ScaleUp Summit New Orleans 2018, Artificial Intenlligence (AI)

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The Strategic Discipline Blog focuses on midsize business owners with a ravenous appetite to improve his or her leadership skills and business results.

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