Implementation of Artificial Intelligence in business: a complex process

In this blog, I will explain the advantages and the challenges faced in implementing Artificial Intelligence* in businesses, by taking a concrete example and making recommendations in order to make the implementation successful.

  1. Artificial Intelligence nowadays

In 2018, studies have shown that 41% of organizations have already started implementing AI in their core business, while the 59% remaining were still preparing for the change and trying to find the best strategy to incorporate it (Panetta, 2018).

As a definition for Artificial Intelligence, Y. Duan, J.S Edwards and Y.K. Dwivedi (2019) explain that it is “referred to as the ability of a machine to learn from experience, adjust to new inputs and perform human-like tasks”. For example, it can help to predict market trends, propose right words to use in a marketing newsletter, or even translate real-time conversations.

AI can have such different impacts and applications that we can surely find it useful in every organization today. However, it doesn’t mean that businesses should invest right away without thinking about how it can fit in their core organization.

Moreover, it is a controversial subject. According to Ginni Rometty, CEO of IBM, the AI technologies are “technologies to augment human intelligence…By and large we see a world where this is a partnership between man and machine, and this is in fact going to make us better” (Y. Duan, J.S Edwards and Y.K. Dwivedi). On the other side, we can quote Stephen Hawking dramatically saying that AI development will mark the end of the human race (Cellan-Jones, 2014). Also, Bill Gates said that “humans should be worried about the threat posed by AI” (Rawlinson, 2015).

Such famous and successful leaders still have doubts and opposite ideas about the development of Artificial Intelligence. This leads to think that all of us, as employees, are worried about it too, and this brings a lot of uncertainty about its implementation.

2. A concrete example: Orange Contact Center

I decided to focus on the industry of telecommunications by taking the example of a contact center of Orange, the leader of telecommunications in France.

One use of Artificial Intelligence called “Natural Language Processing”: it is a “technology that reads, understands and responds to conversational language” (B. Eubanks, 2019).

A company called Audeering focused on this technology and pushed it further: they developed a machine learning able to recognize in real time the emotions transmitted through voice (Audeering, 2019). It means that, by analyzing the tone, words, variations of the voice, the machine learning guesses which emotions the person feels.

I will explain now how an Orange Contact Center could benefit from it but also which challenges the manager would face when implementing it.  

3. The advantages of the implementation

Several external and internal facts about Orange might justify the implementation of this technology into their contact centers. Using SWOT tool and a context analysis, I could find 4 main reasons:

  • Orange has a high-quality / high-price positioning on the market.
  • Many low-cost competitors are entering the market, so Orange needs to keep innovating.
  • Due to social media, complaints from customers can become rapidly viral and impact the company’s reputation.
  • Client satisfaction provides positive word of mouth which has a great influence when choosing an operator.

All of these observations lead to one conclusion: Orange needs to have a best-in-class after-service and this happens within their contact centers. This is where Audeering comes in play to improve customer satisfaction, therefore customer loyalty, and overall revenues and market share by:

  • Increasing Orange’s customer satisfaction: if the agent is able to know exactly in which state the customer is at any time, then he can adapt the way he speaks, what he says, in order to best satisfy the client.
  • Knowing exactly when a manager intervention is needed: if the machine learning shows a very high angry rate, then the manager knows he needs to interfere and take the call from the agent.
  • Using the feelings of the client to assess the agent’s performance: there will be an assessment of each single call thanks to the AI technology. The manager will be able to know if the agent has satisfied the client, and therefore done a good job.
  • Defining which agents need training and which training they need: now the training can be very specific for each feeling of the customers. For example, when the angry rate is that high, then you should react like that. If the happy rate is that high, then you can reinforce the relationship by acting like this etc.

4. Obstacles & Driving forces for the change

If an Orange Contact Center was to implement this technology, the main obstacle would be the readiness of the agents.

Indeed, most of the agents might not be aware of the need for change, they might not understand why this must be implemented while the overall company is doing well in the market. Moreover, the Artificial Intelligence might be perceived as a threat and go against the individual needs and wants. Furthermore, there is always a fear of technology in people and they might be scared that it could take over their job.

On the contrary, if a strong manager is leading the change, it can be a driving force for the implementation. Moreover, as Orange is leading the market in France, we can imagine that a big budget can be used for this project and can push it forward.

5. Recommended actions

First, as the restraining forces are mostly human beings, I would recommend the change to be incremental, done step-by-step and over a long period of time. There is no urgency to implement it, as Orange is a strong leader and is not highly threatened in the short term.

Secondly, I would recommend starting with a pilot site. It means taking one of its many contact centers in France and try it out. This allows for a mistake and Orange will be able to learn from it. Moreover, as most contact centers of Orange work the same way, have the same tasks, and might only variates in terms of size (number of agents), the result in this pilot site will likely apply to the others.

In this pilot site, there need to be a strong and trusted leader to lead the change. As I said before, the main obstacle is agents’ acceptance of the technology. Therefore, the manager needs to be inspirational, trusted and respected by employees. He needs to show that he cares about them and that the machine learning is not there to take their place, but to enhance their capacities, to make them better at what they do, and to have a positive impact on the overall company.

In order to be successful, the manager should probably use an education and delegation style. It refers to using small groups of agents in order to better explain and discuss the change. It would enhance the understanding of the Artificial Intelligence and the acceptance of this new technology in order to overcome the challenges explained above.

After the implementation, the manager should first look at the outcome in terms of behaviors and attitudes of the agents. This is the most important part and they need to have accepted the AI technology and talk about it in a positive way. When this is done, then the manager can look at the actual outputs of the implementation: did the client satisfaction increase since the beginning of the change? Did the machine learning allow to focus employees’ training on particular pain points?

As Artificial Intelligence is developing more and more, and as Orange is such a big and successful company, I am sure that they have been thinking about its implementation for years now and it will soon reach all their contact centers.

*Referenced as AI in the rest of the blog.

References:

ABC Bourse. (2019) Profil Société Orange. [Online]. Available at: https://www.abcbourse.com/analyses/chiffres.aspx?s=ORAp

Audeering, (2019). Audeering. [Online]. Available at: https://www.audeering.com/

Billot. J.“La confiance, clé du développement des usages entre l’opérateur mobile et ses clients ». Retrieved from : https://www.lajauneetlarouge.com/la-confiance-cle-du-developpement-des-usages-entre-loperateur-mobile-et-ses-clients/

Cellan-Jones, R. (2014). Stephen Hawking warns artificial intelligence could end mankind. Retrieved from: https://www.bbc.co.uk/news/technology-30290540

Duan Y., Edwards J.S and Dwivedi Y.K. (2019). “Artificial intelligence for decision making in the era of Big Data – evolution, challenges and research agenda.”, International Journal of Information Management, 48, pp 63-71.

Orange Business Services.(2019). Le Groupe Orange, un leader Mondial. [Online]. Available at : https://www.orange-business.com/fr/reussir-avec-nous/orange-leader-mondial

Panetta, K. (2018). Gartner top 10 strategic technology trends for 2018. Retrieved from: https://www.gartner.com/smarterwithgartner/gartner-top-10-strategictechnology-trends-for-2018/

Rawlinson, K. (2015). Microsoft’s Bill Gates insists AI is a threat. Retrieved from: https://www.bbc.co.uk/news/31047780

Tata Consultancy Services. (2017). Artificial Intelligence to Have Dramatic Impact on Business by 2020. Retrieved from: https://www.tcs.com/artificial-intelligence-to-have-dramatic-impact-on-business-by-2020

Uzialko, A.C. (2017). AI comes to work: how artificial intelligence transform business. Retrieved from: https://www.businessnewsdaily.com/9402-artificial-intelligence-business-trends.html

Organizational culture : When it is time to change to stay competitive.

If I asked you to think about an innovative sector, you may not first think about the bank industry. Yet, for several years now, more and more people are adopting new banking solutions provided by new entrants. I was interested in analysing the case of a well established company (the Societe Generale), in order to review how the company faces this new competition.

As most of us, I have had a bank account in the same traditional bank as my relatives since my childhood. Over the last few years, we have witnessed the growth of new actors from the FinTech, using new technologies of the Internet to revolutionize the financial sector. These new players are challenging old institutions which have to innovate to maintain and sustain their growth. In this article, we will consider how traditional banks have to think about changing their organizational culture to keep growing.

I chosed to study the Societe Generale, flagship of the French bank industry created in 1864. The company counts approximately 148,300 employees and is located in 76 countries. Its activities are separated into 3 pillars :

  • Retail banking in France
  • International Banking and Financial Services.
  • Corporate and Investment Banking.

We can see that it is a well established company. However, it doesn’t escape to the reality. In 2008, the company was affected as many of its competitors by the subprime mortgage crisis. And as if it was not enough, it was at the heart of an huge scandal, the Kerviel fraud which lost the bank €4.9 billion. For both cases, we are still looking for responsibles. Some experts will point the finger on banks and bankers whereas other will incriminate the pressure from institutions.
In 2014, a paper written by Alain Cohn and other researchers suggested another cause : the culture of the bank industry itself. Indeed, results from their study showed that “the prevailing business culture in the banking industry weakens and undermines the honesty norm, implying that measures to re-establish an honest culture are very important” (Cohn and 2014). According to them, it occurs only in the banking sector because there is a lot of focus on money and number crunching. Thus, the banking industry culture such as the Societe Generale’s culture enhance by themselves dishonest behaviours. The subprime crisis such as the fraud are consequences of this.

In addition to these financial affairs, the Societe Generale has witnessed the emergence of new entrants. Theses startup from the FinTech use new technologies to provide new solutions such as online bank and neobank. Their clients are seduced by the interactive service and the transparency. From now, it is possible to realize bank transaction directly on a smartphone. For long, the Societe Generale such as its competitors have not considered the innovation as a major topic.  Indeed, one of the consequences of the mortgage subprime crisis is that the reglementation was reinforced with the Third Basel Accord. Banks are committed to increase their capital requirements. However, the entrance of new actors from the FinTech has now change the game rules.

In a nutshell, the Societe Generale lost the trust of potential clients and innovative competitors were emerging on the market. The French bank had to operate some changes if it wanted to sustain its business.

But how should a company such as the Societe Generale consider cultural change ?

Three major steps are required to change an organizational culture. (Susan M. Heathfield, 2018).

The first one is to understand its current culture. What is the current state ?
The management team in charge of the change for the Societe Generale would argue that it is a well established company, with an important background. However the Kerviel fraud may testify that new systems of measurement and control are required. And the vertical hierarchy with heavy processes prevent fast innovation.

The second step is to define a vision. Where does the organization want go ?
The company wants to be customer-centric and innovative by taking advantages of new solutions provided by technologies of the internet. Moreover, it wants a better internal control system and promote the notion of responsibility within the company.

Last step and not least, individuals within the company must decide to change their behaviour. How does the company make its employees change ?
This is the hardest part, and explains why it is so important to manage change. The main reason why change programs fail is the RESISTANCE from employees. They have to understand why the change is required and adopt the vision. Communication is very important and leaders have to be 100% committed for the change.

Let’s go back on the example of the Societe Generale.

In 2017, the company released its strategic and financial plan “Transform To Grow”. Conscious that within an European banking sector undergoing radical change, the company had to prepare its development and transformation to maintain a sustainable growth. Regarding its strategic plan, it has made different actions to boost the innovation within the company. It launched an Innovation Lab in 2016, its Global Markets Incubator in 2018, and made some acquisition of Fintech startups such as Treezor.

The company has decided to be innovative through the integration of FinTech startups. We can talk about open innovation as defined by Henry Chesbrough. The Societe Generale is a big company, with a vertical hierarchy and heavy processes. As a consequence, innovation in this conditions requires so much time that the company needs a lot of time before launching it. In comparison, Fintech startups are more flexible, with a flat organization so it is easier to launch new products and services. Moreover, the Societe General may not have the resources required to implement such innovations. Thus, it was a great opportunity to create an incubator and integrate companies from the FinTech in order to benefits from their agility and “startup spirit”. The Societe Generale created an ecosystem by integrating these startups, which will benefit from the big database of the old bank and will bring innovation within the company. A win-win operation !

But how should the Societe Generale make its employees change ?

Remember, “The main reason why change programs fail is the resistance from employees” . Former employees may not understand why the innovation should come from the outside. That’s why communication is very important for organizational culture change.
In my opinion, it is the role of the top management to explain this strategic decision but all levels should be involved. First, Societe Generale top managers have to communicate the change to their middle managers. As it is a big company, middle managers have more legitimacy to explain the change to other coworkers. At the same time, top managers have to communicate to the whole company through a newsletter, an official announcement.

The change will require time and have to be plan. Leaders have to show the example, support the change at 100%, and new organizational cultural values and behaviours have to be accompanied by the right rewards and recognitions.

References
1. Henry Chesbrough, (2003), “Open Innovation, The New Imperative for Creating and Profiting from Technology.”
2. Alain Cohn, (2014), “Business culture and dishonesty in the banking industry.”
3. Steve Strauss, (2015), “Top 7 reasons why organizational change fails.”
4. Susan M. Heathfieldy, (2018), “You can consciously change your corporate culture.”
5. Lestavel T 2019, ‘L’innovation permanente, une culture à développer dans les grandes entreprises’ Le Figaro, viewed 24 March 2019, <http://www.lefigaro.fr/societes/2019/03/21/20005-20190321ARTFIG00001-l-innovation-permanente-une-culture-a-developper-dans-les-grandes-entreprises.php&gt;

Enabling change in situation of Merger and Acquisition: the leadership capabilities

              As you all know, the world is fast changing, so are companies. There are more and more companies which decide to adopt the strategy of merger and acquisition to stay competitive in the market. This trend is not slowing as “Global merger and acquisition activity in the first nine months of 2018 set a record”. (Financial Times- Eric Platt, 2018)

In this blog, I will try to analyze how the employees can adapt to such changes while the world is fast changing. This might be a cause of reluctance for the employees and lead to be less efficient and willing to fit in the culture and spirit of the company. This is why senior managers have to make this change understandable by the employees as they are the key actors to make this change accepted.

Isn’t it scary? Let’s have a look at this phenomenon within the cinema industry.

Are you a Simpsons’ fan? If yes, you must have been terribly affected by the huge announcement of The Walt Disney Company buying the 21st Century Fox… So might be the employees (I guess). Imagine Mickey who now owns the most famous brands like the X-Men, Avatar or even the Simpsons!

simpsons

James L.Brooks, one of the director of the Simpsons tweeted a sarcastic drawing of Homer welcoming Mickey Mouse in his family. So, what could possibly think the own employees of the 21st Century Fox?

What could they be afraid of: Switching location? Working with other employees? Losing their job?

The main challenges that the managers face is to make decisions from the top management accepted by all employees. Even if they do not necessarily agree with the decisions themselves. But “a leader is the who selects, trains, and influence the follower(s) to the organization’s mission and objectives causing the follower(s) to willingly and enthusiastically expend spiritual, emotional, and physical energy to achieve the objectives.” (Winston & Patterson, 2006). All this tends to prove that the leaders need to be competent and have certain capabilities to enable the change is such situation.

So, the leaders have to implement a strategy and a corporate plan to reassure the employees. First, the goal is to define an effective management strategy. This strategy will consist in clearly communicating the change to the employees of both companies which are merging. Indeed, “the resistance to change can be attributed to the lack of communication, no clear vision, no proper reward system, confusion and frustration, force of habit, fear of unknown, fear of insecurity, loss of competency and lack of support.” (Kansal, Chandani, 2018)

Within 5 leadership styles which can be identified: Education and delegation style, collaborative style, participation style, directive style and coercion, the manager has to decide a style to implement. This decision is a key point not to glance through. Indeed, “it has been seen that most merger and acquisition fail because of poor handling of change management” (Vaccarezza, Alessio, Rizzi, Gianluca, 2014).

This is why I advise leaders of both companies to design together their communication plan before the actual merger is announced to employees.

A complex communication process :

As the mergers and acquisitions are decisions taken by boards of directors and the top management, employees could feel forced to endure decisions taken. Mergers and Acquisition can be considered as coercion style management when it comes to prompt action like this one. So, in order to avoid fear and stress within the teams, employees need to be involved in the change. Of course, the involvement of the employees comes after the decision has been taken.

According to Souply-Pierrard and Robert, 2017 “The implementation of participative management (tools) influence positively the probabilities of success for mergers and acquisitions”. This leadership style is about involving the employees in how to deliver the changes. It means that ideas of workers are (at least) taken into account. The authors clearly explain that this management style creates more confidence and enthusiasm of the employees within their companies.

Indeed, another interesting blog written by Braden Becker (and I advise you to have a look at it) shows other forms of leadership styles. The one which is similar to the Participative style is called “strategic leadership”. This leadership style focuses on the fact that employees “accept the burden of executive interests while ensuring that current working conditions remain stable for everyone else”, all of this in a logic of “growth opportunity” like are the mergers and acquisitions.

Adapting the change path to a concrete communication plan:

A merger is a transformation for both companies in a short period of time (it takes approximately between 12 and 18 months – Big Bang) and is considered as a Revolution.

First, the managers should organize meetings between the teams. Indeed, the fact that you concretely meet your future colleagues can generate a more peaceful atmosphere and reduce stress. By just visiting the buildings of each company, people are more likely to picture themselves in the spirit of the other company and the universe which they are working in.

Then, on a second step, leaders should try to get the best from both companies by facilitating the dialogue between the teams for them to exchange their knowledge. The idea would be to make everyone understand each way of working and habits that everyone has. Employees might give good ideas on how both companies could merge in terms of mixing teams. They might even become happy to diversify their activity and discover new territories because “a full range of restructuring practices are currently being used to revitalize companies” (Gaughan, 2017). In that case, the mission of the manager would be a success in building a peaceful atmosphere while merging different universes.

Finally, the participation of people can be seen as an incremental way of making the decision accepted. As there is a limited time (Big Bang) between the official announcement of the acquisition and the concrete action, the involvement of the employees makes the change smoother than it appears.

However, all of that can only be possible if the managers are previously aware of the change after the merger. Once they know that, they can put the participative style into practice to really take the employees into account by asking their point of view. Indeed, this management style can be seen as “manipulation” as the ideas of employees are not necessary implemented because the leaders still have a strong decision-making power and are able to control what is desired by the employees.

In my opinion, the leadership style to be adopted is a mix between coercion (for the decision of merging), directive style (the top management explains clearly the strategic plan to the managers) and then comes the participative leadership style for all the employees (as I just explained before).

But each step has to be followed as soon as possible to avoid stress in the work environment of both companies.

deadpool

I also would like to point out another managerial issue which can play a role in mergers & acquisitions is the culture of the company (which is even more accurate in the cinema industry). And it can be noticed that it’s not because companies are working in the same industry that it is easier the merge. On the contrary, I think it’s worst! If we take again the example of the Walt Disney Company and The 21st Century Fox, merging, the two companies were competitors, with two different visions of the cinema industry with their own footprint and identity. Ryan Reynolds, famous actor who played the iconic anti-hero Deadpool illustrated his disappointment on Twitter with a picture of his character leaving on a Disney bus.

So, will Deadpool really become a nice guy in his next movie? To be continued in a magic world…

REFERENCES:

  • Kansal, Sugandh, Chandani, Arti, 2014, Effective management of change during merger and acquisition.
  • Gaughan, 2017. Mergers, acquisitions and Corporate Restructurings.
  • Souply-Pierrard, Robert, 2017. Participative Management as a key success factor in merger and acquisition.
  • Gandolfi, Stone, 2018. Leadership, Leadership styles and Servant Leadership.
  • Vaccarezza, Alessio, Rizzi, Gianluca, 2014. Change Management Dashboard: An Adaptive Approach to Lead a Change Program.
  • Winston & Patterson, 2006. An Integrative definition of leadership.
  • Eric Platt, 2018. Financial Times : https://www.ft.com/content/b7e67ba4-c28f-11e8-95b1-d36dfef1b89a
  • Braden Becker, 2018, Blog : https://blog.hubspot.com/marketing/leadership-styles