How I learned to stop worrying and love AI

Tom Stoneman: Hi, I’m Tom Stoneman, and this is The Intelligent Enterprise, where every two weeks we take a break from the chaos of enterprise life and get inside a big idea by getting outside of it. Each episode, we meet an industry expert who helps cut through the noise from all the updates and roll-outs while exploring one of their favorite break-time activities. Things like cycling, meditation, or reading, whatever activity gives them a reprieve from the day-to-day demands of work and the distance they need to come back to a problem with a fresh perspective.

This week I’m joined by Joe McKendrick, an author and independent analyst who is widely recognized for tracking how technology innovations, specifically artificial intelligence or AI, cloud computing, and big data, impact modern markets and careers. As co-chair of the annual AI summit in New York and a longtime senior contributor at Forbes and ZDNet, he spent his career helping leaders understand not just what’s next in tech, but how to make the most of these innovations inside organizations.

Joe McKendrick: We got the most powerful technology in human history, and the first thing corporate leaders think to do is lay off people. AI has to be much more than cost-cutting.

Tom Stoneman: Joe brings a clear-eyed perspective to the show today, helping us understand why the true long-term impact of AI remains uncertain and how AI can drive real business value when people, not just platforms, are at the center.

Joe McKendrick: You’re seeing a rise in entrepreneurial thinking. You’re seeing an ability to take these tools that AI provides us and start businesses, or if you’re inside a business to start new ventures from inside that business.

Tom Stoneman: Let’s get inside the future of enterprises by stepping outside of them. I think we both agreed that there’s so much negativity out there. I think I saw some survey that only 26% of people view AI in a positive light. There’s so much gloom and doom about people losing their jobs or it’s going to take over the world and then Terminator becomes valid again and all that.

So I want to see if we can kind of shift from the in the future existential risk and tangible disruptions and see if we could talk a little more about the positive side. So I thought I’d just keep that just wide open and see what your thoughts are on the good side of AI, what you see coming that’s positive.

Joe McKendrick: Well, going back to the negativity, especially when it comes to careers, I mean, we’ve been inundated by industry leaders. You really should know better than to talk about that, but we’ve been inundated by a talk about within 12 to 18 months, all white collar professions are going to be wiped out. AI is going to do everything better and that’s not reasonable. AI may do a lot of things better. It’s very effective at performing tasks, but you’re not going to see a wholesale job wipe out anytime soon. And there’s been fears of what technology could impose upon the world for decades now. Back in the 1980s, with the advent of into the office, word processing was coming into play and so forth. It’s hard to predict the future.

And Tom Davenport in a recent article in Harvard Business Review talked about that as well. He looked at predictions about the impact of AI since 2018, what people were saying, John’s being wiped out and so forth. And none of them have come true. He looked at what was predicted back then, what’s happening now, and we haven’t seen those dire consequences. And I think what’s going on is you’re seeing a rise in entrepreneurial thinking. You’re seeing an ability to take these tools that AI provides us and start businesses.

Or if you’re inside a business to start new ventures from inside that business. If you’re going to start a business, you don’t need to hire a staff of IT people and have a staff of accountants or hire lawyers. AI provides the tools often at very low cost to start your business. It’s not to say you’re not going to lead lawyers later on. Everybody seems to need lawyers, but to start a business and start up, that’s the key. And many people fear for their jobs. And in many cases, those are the nine to five jobs, the standard employment contracts where you’re depending on a company to steer your fate and that company could lay you off because it feels rightly or wrongly that AI could do a lot of your job.

But if you can harness AI resources and build a business, again, you could be inside a company already and build a new type of business with these tools that are available now, you’ve got an advantage. And I think that’s where the future is very bright.

Tom Stoneman: It’s funny you mentioned Tom Davenport. I read your article where you were talking about Tom Davenport, and in there you described where he mentions disruptions, specifically shipping containers and how that totally disrupted the dock workers. And they all thought, “Oh man, we’re all going to lose our jobs.” And to some extent, there was a chasm where they did.

Joe McKendrick: Yeah.

Tom Stoneman: And it took a little while, but then eventually shipping logistics became a much bigger thing. So now they have a bigger pool of workers and you can ship more products and it became the thing. And so I think it feels to me that’s kind of where we’re at. We’re at the beginning of that chasm.

Joe McKendrick: Exactly, exactly. And they call it the first order transformation where you see AI replacing tasks, maybe replacing jobs. Oh God, this is the future. This is going to continue as it is. But what we can’t see, the second order transformation or the third order of transformation, what we can see is what’s going to happen down the road, how the economy’s going to change because of AI and the resources it provides us. Just as with the shipping containers, as you said, the automating the activity at the docks, it did result in pain for dock workers, but then it built a whole new industry behind it. The containers, they can plop down the trucks and trains and immediately ship to where they need to go. It changed the whole logistics scenario for the way we ship goods and add intelligence too.

Tom Stoneman: Now, I did read something too about you. I think you did an article with Andy Thrive back in 2022, and the title was AI Isn’t Ready to Make Unsupervised Decisions. So you mentioned that AI really didn’t have empathy or the ability to think of the big picture. So I wanted to just ask your opinion now after all these years, three years, which is like 30 years now, do you think AI has progressed enough to maybe be on its own a little?

Joe McKendrick: Yeah, a little bit on its own. My co-author, Andy Thurai, he’s very much a big advocate of AI and all the things AI can do for the world, but he points out that we’re talking about machines, machine logic, calculations based on predictions. There’s no empathy. AI doesn’t really think. AI just bases its output on predictions, but it’s never going to have empathy. It’s never going to be able to provide the human touch that is always necessary. And while there are people that claim that you can have a … I just heard this expression, zero human business. I think it’s some of the crypto outfits that are pushing that, but you’re always going to need a human to guide AI because AI on its own doesn’t know what a market wants. It doesn’t know what kind of need is out there in society and formulate a business. It’s just never going to happen that way.

I had lunch a few months ago with Lawrence Schiller, the photographer and producer and writer, he’s going strong at 88 and he wrote the executioner song. He co-wrote that with Norman Mahler talking about a guy who was executed in Utah and his background. He went out and spent months interviewing people, chasing these people down, getting interviews with them, getting their perspective. And AI would never, ever be able to do something on that level. AI can’t go out and chase interviews, chase down interviews, or chase down family members, or chase down politicians. It just isn’t there. And you’re always going to need people to perform tasks such as that. As with business, AI can’t sit down and come up with a great business idea and then go out to investors pitching the business idea. Then perhaps if the business launches, go to zoning boards or government agencies to get whatever permissions are needed to locate a new plant or an office or what have you. You just need people for all that stuff.

Tom Stoneman: Yeah. It’s funny. I think we’re starting to see where AI thrives and where it just emulates. So I can’t ever imagine AI writing the screenplay for taxi driver or something that was derived from the pain or joy of the actual writer. So today, just to move into the enterprise part of this, because this is the intelligent enterprise, we were talking before about AI thriving, AI thrives in cultures that are healthy enough to embrace it. So when it’s done right, it can amplify the human energy already present in an organization. And I wanted to ask you, do you see enterprise leaders using AI to work in tandem with their people to amplify their culture? Are you seeing that happening now?

Joe McKendrick: That’s a great question and it’s kind of a mixed bag when we talk about culture. Jensen Hong just said the other day in an interview with Jim Kramer’s mad money, he said that we got the most powerful technology in human history. And the first thing corporate leaders think to do is lay off people. Instead of exploring its potential with people, the first reaction is to, okay, we’re going to cut costs and save money. And AI has to be much more than cost-cutting. It’s a cost cutter indeed. It does help save costs and lower the margins for businesses, but there’s just so much potential with what you can do with the innovation you can accomplish with it. Look at what’s being done in medicine, for example, using AI to better diagnose illnesses, to develop new kinds of medications. You can develop new medications within a few cycles of a computer versus spending months researching.

So there’s a lot of benefits and a lot of innovation that can be accomplished that can be opened up with AI. It’s not a strictly a replacement strategy. As an aside as well, you think about … Do you remember the movie, The Apartment, with Jack Lemon?

Tom Stoneman: Oh yeah. Yeah.

Joe McKendrick: Came out back in 1960. Do you remember the opening scene? He worked in this humongous, gigantic hall or office. There were probably about 500 people there all sitting there at adding machines. This is a case where technology made people’s jobs better because you didn’t have that road type of work where you’re sitting in a gigantic office with 500 people just typing away an adding machine. It elevates people to be able to be free of these road tasks, to not have to worry about such road task. And they can worry about the bigger picture, what they can do, what kind of innovation they can bring to the workplaces. And that’s not emphasized enough. It’s not. The emphasis, at least from what we’re hearing, is the emphasis is on cost-cutting and companies are laying off people. They’re saying it’s AI, that may be an excuse, but the potential is just much greater than that.

Tom Stoneman: To me, it feels like there’s probably always is going to be a polarization of people who think about it purely from tactically, how can this make things faster and we make more money? And then there’s people who will think, how can they make things better? And so I think about music. There was someone here early on and we were talking about how there are a lot of people who think, “Oh, this is great. I don’t have to learn an instrument. I don’t have to do anything. I can just create music.” Or from the producer side, we can save a ton of money because we don’t need artists to create this stuff. We can just use AI.

And of course, that’s a big point of contention right now. But the ones that are more interesting than any of this are, and this goes all the way back to David Bowie before we called all this AI, where people are actually taking AI and using it to create things that could never have been created before and merging it with their creativity. And that’s where I think it really gets interesting. And it’s not much different in the corporate world. It’s what you said, that’s just a musical version of it, I think.

Joe McKendrick: The corporate world as well, the fact that you can have this essentially innovation machine to develop a product and release it. We’re talking about months and years in some cases for things to get out there. AI, you can kind of virtually develop these products and virtually test them and do virtual market tests even within the matter of weeks or whatever it takes to get some new ideas out into the marketplace.

Tom Stoneman: So as Joe illustrates, focusing on AI as a cost-cutting measure not only misses the big picture of AI’s potential, but it prevents business leaders from empowering their teams with the mindset to bring real innovation to their organizations. As we see in music and other creative pursuits, it’s the visionaries who recognize a new tool as an opportunity to innovate. They’re the ones that become history’s change makers. In the business world, perhaps it’s those of us who are willing to utilize AI as a tool for experimentation and human collaboration, rather than simple task completion who will be best positioned in an AI-driven workplace. That instinct to explore, to stay in motion to see what’s possible is familiar to Joe outside the workplace too, in his favorite off-the-clock activity, cycling.

Joe McKendrick: One of my passions is biking, bicycling, going on rides, not necessarily with the big deals with the bikeathons and 100 mile bike hikes, but just getting out, there’s local parks are in my area. I’m Bucks County, Pennsylvania. We have some nice local parks with a lot of nice bike trails, and there’s a trail, a series of trails actually interconnected now that extend from the upper reaches of near Allentown. You can follow a trail along the Schuylkill River, down into Center City of Philadelphia and beyond, all the way down to where the airport is, which is at the south end of the city. And I’ve taken that trail. Again, it follows the river, so it stays a nice, even grade. And there’s a lot of history there, of course. You can start a Valley Forge, for example, where Washington camped out back in 1776 or so.

It then goes down to the art museum, and if you’ve seen pictures of Philly, that’s one of the iconic buildings in Philadelphia, and that’s where Rocky ran up the steps and so forth. I’ve read that going out into nature where the trees and so forth are good for your mental health. And I think it really helps me in clearing my thoughts. It really does help keep in touch with things and clear your mind. And of course, as I’m riding, I’m thinking of these great ideas, but I can’t really write them down at that moment. So I have to try to keep it in my head until I get back to the office.

Tom Stoneman: Well, a few years from now when we all have implants, no problem, right?

Joe McKendrick: Yes.

Tom Stoneman: I grew up in Northern Michigan, and I remember how excited I was when I got my first … This is going back to the ’70s, so 10 speed was a big deal. And so I got my first 10 speed, and that was exciting. But I just kicked myself because it’s gorgeous up there. I mean, it’s just absolutely beautiful. We lived next to Higgins Lake, but what’s really sad is the only thing I could think about after I got that bike was, “Gosh, I can’t wait until I get a car.” Now I’m like, “Yeah, I’d do anything to get back there.”

Joe McKendrick: I know, I know. Back when I was a teenager, I’m sick of riding a bike. I finally can drive now. I’m free. I’m free. I can drive now. And just in my adulthood, I’m like, “Oh, I can ride a bike now to my office with these trails. I’m free now. I don’t have to drive a car.”

Tom Stoneman: Right, right. All right. Well, we’ll go from the past and now let’s jump into the future. So we all know AI. It’s evolving at an incredible pace. Instead of a three to five year outlook now, most leaders are looking at six months to a year because it’s just, in fact, it’s almost every day now. Yeah. So I want to ask you if AI gets culture and the progression right in your crystal ball, what’s the best case headline you think you’ll be writing in maybe six months to one year?

Joe McKendrick: AI adoption still lags. AI is disappointing because there’s so many high expectations of it now. The expectations for it are just through the roof. And we’re seeing it in surveys. Companies have implemented and it’s improved some areas here and there, but it hasn’t been this wholesale ROI that we’re seeing. I’ve seen that PWC just did a survey saying only about … Oh, I don’t have the number right in front of me. I’m going to say half, only about half the companies saw ROI so far from … And there’s that study by MIT researchers. It’s been very controversial, that study actually, that found that only 5% of GenAI projects have really shown value. And I think the proper way to interpret it is that other 95% are still in the work in progress stages. They’re still trying to figure it out. We’re still trying to figure out.

And there’s that 5% of companies who have found a killer use case for it and are applying it. And who knows, maybe there’ll be something else. We talk about a agentic AI now. We didn’t talk about that two years ago. We were talking about GenAI. And two years before that, we weren’t talking about GenAI. We were talking about machine learning. Maybe six months from now or a year from now, there’ll be something new on the horizon, quantum AI or something that everybody will be talking about.

Tom Stoneman: Well, maybe that’ll get us to the Jetsons, right? Yeah.

Joe McKendrick: Yeah.

Tom Stoneman: Finally.

Joe McKendrick: And some flying cars, finally.

Tom Stoneman: Yeah. I love this question. So is there any part of your life that you think should be kept AI free?

Joe McKendrick: Yes. Flying in an airliner, I’d rather have a human pilot up in the cockpit. I don’t want AI to be flying the planes and other touch points as well, customer touchpoints. Going back to airlines, it’s nice to have a human there who could kind of help you through things if you can’t make a connection or something like that. I have to admit, they’re doing a pretty good job of now making the connection for you and AI is doing that for you. But it’s always good to have a human to help out as well. And healthcare too, I’d rather deal with a human for healthcare issues who can explain things, not an AI telling you what’s wrong with you. So that’s another area where you still need the human touch. It’s good to have the human touch.

Tom Stoneman: It’s interesting. I watch, just for my own entertainment, there’s these airline pilots. They discuss different things, but they all discuss the need to have a pilot up there who can see the big picture. Same thing as before, right? They know there’s people back there or there’s a person next to them if it’s cargo or people on the ground.

Joe McKendrick: It’s always good to have a Sully up there, Sullenberger.

Tom Stoneman: I’m with you on that.

Joe McKendrick: You want him up there.

Tom Stoneman: That’s right. Yeah. Yeah. Make that decision the right way, right? All right, Joe, last thing here I wanted to ask. And this is more of a kind of putting you on the spot to invent an iPhone here in one minute. Can you imagine something that AI will be able to do that has never been done before, either now or in the near future?

Joe McKendrick: Well, I like to imagine a lawnmower, an AI powered lawnmower. There are remote robotic lawnmowers that are programmed to turn away when they hit an obstacle, but an AI lawnmower that knows where everything is in your yard, where a pile of wood might be laying or whatever and work its way around that and remember that it’s there. We’re close to that, I guess, in some ways with the Roomba type lawnmower, whatever they call those things, so that would be beautiful.

Tom Stoneman: But what about the cleaning? Because that’s the part everybody hates, right? Can it do that? I mean, I’m sure it can.

Joe McKendrick: I love that expression someone came out with about a year ago. I’d rather have AI doing my laundry and my cleaning and let me do the creative work versus the other way around.

Tom Stoneman: Yeah. The way I see things is I hope it’s just in the background in the future and it’s just part of day-to-day life and it just makes … We’re just used to it and it does everything better.

Joe McKendrick: Yeah. Yeah, exactly. Exactly.

Tom Stoneman: Well, Joe, thank you for being on the show. You’re busy, you’re out there doing a lot of stuff, and we really, really appreciate your taking the time to do this.

Joe McKendrick: I’m happy to do it, Tom. Thanks again for having me on. This is wonderful.

Tom Stoneman: I love the positive reframe for AI that Joe offered us in this episode. So often we hear pundits lament the ways AI is eliminating jobs, stifling creative impulses, and changing our economy for the worse. But as Joe reminds us, we’ve heard these arguments before. Anytime emerging technologies hit the market, workforces are indeed changed, sometimes permanently. But these are the first order transformations. We’ve still got the second and third orders on the horizon, and it’s a good idea for us to keep that in perspective. In the meantime, our opportunity is right in front of us. Let’s walk through the doors that AI opens and embrace what is behind them.

Thank you for listening to The Intelligent Enterprise, a podcast where we get inside big ideas by getting outside of them. I’ve been your host, Tom Stoneman. Please remember to follow the podcast and leave a comment or review wherever you get your shows. See you next time.