How AI can boost productivity

Wednesday, 01 May 2024

Steven Worrall
MD Microsoft Australia and New Zealand
    Current

    Slump to surge: How AI can help solve Australia’s productivity problem. 


    As the director audience is well aware, Australia is facing a productivity crisis and has been for some time. A recent report by the Productivity Commission found that Australia’s labour productivity fell by 3.7 per cent in the 2022–23 financial year. This came after Australia’s biggest slump in productivity growth in 60 years in the decade to 2020.

    The need for innovative solutions to reverse this trend is more urgent than ever, so it’s timely to consider how fast-changing artificial intelligence (AI) technology can help us to tackle the productivity challenge and propel our companies and economy forward.

    At a recent Australian Institute of Company Directors (AICD) event, Judson Althoff, executive vice-president and chief commercial officer (CCO) at Microsoft, shared some invaluable insights into the potential of generative AI. This latest iteration of AI uses natural language processing to create new content and solutions at incredible speed, based on vast amounts of data. But directors heard that it must be introduced thoughtfully in corporate environments.

    Althoff stressed the importance of grounding generative AI initiatives by prioritising business impact and outcomes over technology. He outlined four pivotal questions that company directors and business leaders should consider when evaluating generative AI initiatives:

    • How can generative AI enrich our employees’ experiences?

    • How can it help us engage with customers more effectively?

    • How can it enable us to reshape our business processes?

    • How can it help us innovate in substantially different ways?

    Althoff also discussed how Microsoft has been answering these questions internally while responsibly incorporating AI into everything it does. He says this has enabled the company to unlock tangible productivity benefits from the technology in several areas.

    For instance, Microsoft’s AI-powered coding assistant, GitHub Copilot, has been instrumental in accelerating the company’s software development processes and increasing developer satisfaction by making their tasks more engaging and less tedious.

    Althoff also highlighted the unprecedented pace at which generative AI is being adopted across various sectors in Australia and worldwide, including in heavily regulated areas like financial services, healthcare and telecommunications. 

    During the AICD event, directors also heard from Kim Krogh Andersen, group executive of Product and Technology at Telstra, who shared the company’s ambitious goal to integrate AI across all key processes by 2025. He said the introduction of generative AI tools like One Sentence Summary is already helping Telstra to enhance its service efficiency and customer satisfaction, including reducing the need for customers to have follow-up interactions by 20 per cent during trials.

    Commonwealth Bank of Australia is another Australian organisation seeing a transformative impact from AI. The bank has integrated the technology across its operations — from customer service to fraud protection — enhancing its performance by personalising customer interactions and streamlining internal processes. For example, its use of AI to read, analyse and process customer documentation has halved the time it takes to verify someone’s income when processing a loan.

    Althoff also advised directors to accelerate AI adoption within their organisations, highlighting the risk of falling behind in today’s rapidly evolving business landscape. Embracing AI is a necessity for creating differentiation and securing a competitive edge.

    Reflecting on these insights, it’s clear that AI will be an important part of solving Australia’s productivity problem. The path forward involves not just adopting AI technologies, but also embracing a mindset of innovation and adaptability across all levels of organisations.

    As we unlock AI’s potential to enhance productivity, we must remember that actual progress depends on widespread participation. By prioritising people over technology, we can create AI solutions that engage more individuals in the workforce and meet community expectations right from the start. This approach ensures that AI’s benefits are broadly shared, fostering equity and increasing opportunities for all Australians.

    Althoff noted that collaboration between industry and government will also be vital in fostering an AI-ready workforce that can drive the Australian economy forward. Skills such as critical thinking, data literacy and ethical reasoning are essential for using AI responsibly and effectively. By focusing on reskilling and upskilling in AI, we can ensure Australia overcomes its current productivity slump and continues to lead on the global stage.

    As leaders, we have a unique opportunity to harness the power of AI to transform Australia’s economy. Let’s embrace this challenge, armed with the knowledge that AI is not just a tool for the future, it’s the key to unlocking our productivity potential today. 

    Judson Althoff answers directors’ questions 

    Do you have any suggestions how Australian directors can get themselves AI-literate?

    Just immerse yourself in it. Find a way to try it out. Experiment and get closer to it, I always practise the things I’m not good at. The other thing that’s important to say, is to make it fun.

    Last week, I had my global leadership in town for our annual planning summit — about 100 leaders from around the world. We actually had a little competition where groups used generative AI for a hypothetical board meeting presentation and gave a pitch on responsible AI use cases. You had 15 minutes to prepare, then ready, set, go.

    Each table examined the personalities on the relevant boards, how they might think about AI responsibility, then matched that to the revenue and where there were business opportunities. Then they matched that to our products and capabilities. Finally, they told us a bit about the work we’ve done with that company so far and how that might come together, and created a presentation from it. It’s a great example of a theme around “no more first drafts”. Which is incredibly empowering for anyone in the knowledge sector.

    Given AI crosses so many functions across an organisation, what guidance do you have for boards on where accountability for AI should sit within an organisation?

    It’s very important to have a governance team established inside an organisation that is grounded in a few things. Not just AI-first, but grounded in data and data governance. Because one of the things you start discovering with these AI capabilities is that they find the chinks in your armour faster than human beings can. Kim Krogh Andersen brought it up in his scenario.

    We also saw it in our support scenario when we first started testing that AI persona in our support environment. We found the Copilot was providing some bizarre answers. Why is he giving us the wrong answer for a seemingly obvious problem?

    The cool thing with these copilots is that unlike your kids, they will actually show you their homework. Using AI and iterative refinement around data governance and privacy concerns, testing that and hardening it, that is a board imperative.

    The one question for boards to ask is, what is your data governance strategy? Closely followed by, what’s your cyber strategy? Because if you don’t have a solid cyber foundation in place — from endpoint protection, through the identity layer, and event and incident management, through exposing and digitisation and AI, business processes can be super-risky.

    Microsoft has set up an organisation-wide responsible AI council that’s feeding into the CEO — and then has a board subcommittee particularly focused on AI. What is the board subcommittee’s specific role?

    Like any board function, it’s nose-in, hands-out. Making sure you’re asking all the right questions and doing the appropriate coaching. Our work has been really grounded in transparency because it’s a two-way street. I always say, boards do a reasonably good job of solving problems they know about, but a terrible job at working on ones they don’t. It’s sort of an obvious thing.

    At Microsoft, our responsibility to the board is to have transparency on all the responsible AI work. For example, we will go through it before any product launch, any go-to-market effort or any actual co-innovation work we do with a customer. Even the work we would do with Kim at Telstra — beforehand, we would say, “OK, let’s release that into the wild”.

    The independent, responsible AI governance team evaluates that use case. Then they report against that and we submit that (report) to the board and audit committee. So that level of transparency means you might delay a product launch. It may mean you delay revenue, but if you’re serious about governing AI — and making sure that it is used for good — then that is what you have to sign up for.

    How can boards deliver productivity and employee experience gains?

    At Microsoft, we measure just about everything. We have a product called Viva that actually helps in these measurements. Viva is a product that existed before all these AI capabilities we launched in market. It was always geared around both employee productivity and satisfaction — measuring yield, efficiency, standard deviation and performance by role in an organisation. Also, measurement of KPIs around wellbeing.

    This was a big focus for the product through the COVID-19 era, because it was one thing to measure productivity, which actually spiked during COVID-19 — all records for productivity were shattered — but employee wellbeing went through the floor.

    So, how do you measure that and ensure you maintain that delicate balance? Viva helps you do that through your own KPIs and systems of record.

    We’ve turned that on the AI utilisation and measured the same things. First of all, we assess what is the daily or monthly active usage of these tools.

    Interestingly enough, we see probably the highest active usage inside teams — bringing people together more inclusively than ever before. When somebody showed up five minutes late to a meeting or missed a meeting altogether, we could summarise the meeting for them, bring them along on the journey and help them continue to work with the team on the project.

    Things like that have a high degree of utilisation, like the daily savings in your inbox. Triage this mess for me. What’s junk? What do I need to respond to fastest? Did the boss call? Those kinds of things.

    Then we have the creation assets. We measure all of those things and the output on productivity, but then we also measure the satisfaction.

    Are people, because of that, able to have more free space on their agenda, to have more moments where they can actually freely think? Rather than move from meeting to meeting to meeting and just increase the grind? Even recommendations to employees and managers, like, “Hey, your folks are working 70 hours a week, back it off!” 

    This article first appeared under the headline 'Next-Gen AI’ in the May 2024 issue of Company Director magazine.  

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