When José Esteves talks about AI, C-suite leaders sit up and listen. As head of the Porto Business School, he already has their ear. But it’s his past as a professional hacker that really commands their attention.
For the first 15 years of his career, Esteves drew on his insider knowledge of the internet’s dark side to advise governments and businesses about their cyber-related vulnerabilities – and occasionally, on how they could steal a march on their competitors.
Fast forward 15 years and he’s still a sought-after voice in leadership circles. But now executives ask less about cybersecurity basics and more about how to adapt to an increasingly AI-dominated world.
Esteves doesn’t downplay the immense changes coming down the track. Nor does he hold back on the unpreparedness of most business leaders, particularly when it comes to decision-making.
“Everyone is talking about automation, but no-one is really analysing the impact of AI on decision-making,” he argues. “We take it for granted that human beings will be the ones making decisions in organisations, but actually it’s not so true.”
Better information, better decision-making
It’s not that business leaders will be stripped of their decision-making roles as organisations come to depend more and more on generative AI (GenAI), he says. The real risk is ignoring the influence that AI exerts – and will increasingly exert – on the decision-making process.
Consider all the data-mining, number-crunching and scenario-planning that leads to ‘option A’ or ‘option B’ arriving before the board. AI’s contribution here is no bad thing, Esteves says. Business leaders like to boast of ‘going with their gut’, but what is often interpreted as bold or instinctive decision-making is often merely a suboptimal response to imperfect information, Esteves maintains.
The return on investment here cannot be seen in the short term; it’s in the knowledge you gain, the culture and the way of working
“Very few organisations can provide sufficient levels of analytical information to top leaders, so ‘gut instinct’ was created as a way of surviving. But AI can help to create scenarios, assist with planning and enable better foresight than before,” he states.
In a similarly positive vein, AI can give leaders the kind of unbiased, straight-talking advice that colleagues and consultants are often unwilling to give. As Esteves points out, AI has no fear of missing out on that must-have promotion or losing that critical contract: it just says “what you need to know” as a leader, not “what you want to hear”.
Esteves describes this aspect of AI almost as an ‘executive coach’ – it’s there 24/7 to offer candid and unvarnished insights based on real-time developments. “It’s absolutely indifferent to managing the politics within the organisation,” he says.
Building trust in AI
If that sounds like tough love, think again. AI’s status as a machine doesn’t prevent it from learning human-like traits such as empathy. Indeed, Esteves argues that the discourse of early generation systems like ChatGPT is in fact very positive and friendly. AI machines also have infinite time to listen, something busy humans all too often lack.
“It’s not talked about much, but many leaders feel lonely, especially in times of crisis, because they cannot share what’s worrying them or because they are not willing to trust in anyone. With GenAI, people know they are talking to a machine, but they trust it all the same,” he maintains.
When it comes to people management, however, AI’s impact on leadership has a more unsettling edge. Leaders need to get used to the idea of managing a workforce with two types of workers: human and machine.
Clearly, there’s an organisational challenge around redeployment: who does what job where? More importantly, however, a shift in mindset is required, says Esteves. Leaders can no longer assume that humans are the smartest or even the most creative resource available to them.
Don’t expect all human employees to be comfortable working alongside machines, he warns, especially if the latter are perceived as bringing greater value. Esteves suggests that managers and employees ‘co-create’ a culture where people see AI as a complement rather than a competitor.
“If you’re going to put a machine competing against a person, then that person is not going to feel very happy with that. But if I feel as a human employee that the machine is helping me to improve the overall performance and experience, then it’s good,” he says.
Start preparing today
So how should leaders best prepare? It’s tempting to defer any substantive action, Esteves admits. For all the talk about AI’s disruptive impact, the dramatic changes to leadership that he envisions are still a few years away, he says.
For Esteves, however, leaders can’t start prepping soon enough. “Typically, companies wait for the technology to mature, but that’s a mistake. We know from experience that the best companies give their employees and organisation time to experiment and understand it.”
The key word here is ‘experiment’. Most advice that crosses business leaders’ desks relates to procedural matters: establish an AI policy, set up an AI ethics committee, appoint a chief AI officer, develop an AI strategy and a parallel data strategy to go with it, and so on.
Few organisations can provide sufficient levels of analytical information to top leaders, so ‘gut instinct’ was created as a way of surviving
These are all on Esteves’ to-do list. However, he says leaders must focus on shifting their mindsets for an AI age, something that will take time.
Learning to be comfortable with experimentation is key. It’s an insight drawn from his hacking days. In the face of a new system, Esteves says hackers always start with an exploratory phase, looking for weak spots and testing possible avenues for attack.
“By experimenting, you’re going to start perceiving the potential future impact of AI. The return on investment here is not in sales and cannot be seen in the short term: it’s in the knowledge you gain, the culture and the way of working,” he argues.
Be brave and collaborate
Courage is a related aspect of the hacker mindset. Many leaders are really managers rather than true leaders, says Esteves, hence the importance placed on adapting to the slowly changing status quo rather than uprooting it altogether. In an AI age, in contrast, leaders must be brave enough to follow where their curiosity leads them and “do things in totally new ways”.
Another key step revolves around radical collaboration. This is the only viable route to competitive advantage, Esteves reasons. His logic is simple: most companies lack the resources required to develop sophisticated AI solutions themselves, relying instead on a very similar core set of AI technologies, which reduces their distinctive edge. Only by collaborating with others can they hope to break out and contextualise AI tools to their market realities.
“The question many executives ask me is, ‘If everyone is going to use OpenAI, how can I use AI to compete with other companies?’. I see a great potential in select banks or marketing agencies, say, creating industry-specific AI solutions for their domain.”
Leaders shouldn’t fear AI, Esteves insists. Yes, their roles will change, but for the better: they will spend less time managing the day-to-day and more exploring the exciting ‘what ifs’ of tomorrow.
Could AI become the chief executive? Is that too far-fetched? Not necessarily, says Esteves. “It could, yes, especially if humans don’t change the way they lead.”
