Is AI your new boss? It can replace a CEO in many respects, but falls short in some places

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In 2017, Alibaba Group Holding Ltd. founder and Chinese entrepreneur Jack Ma saw a future in which artificial intelligence would disrupt the workforce, seeing AI as more efficient and better able to handle large amounts of data, leading to better decision-making ability.

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AI could take jobs, he said, but it wasn’t just employees who would be left out of work.

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“Thirty years later, the Time magazine cover for the best CEO of the year very likely will be a robot,” he said in an interview at the time. “It remembers better than you, it counts faster than you and it won’t be angry with competitors.”

Today, rapid advances in AI have brought the promises of efficiency, but have also shown a power to at least supplement certain jobs, if not overtake them entirely. The concern runs across countless industries, with trade and knowledge workers alike fearing replacement. C-suite employees may also have reason to be concerned.

An experiment run by the Harvard Business Review sought to see what, if any, components of a CEO’s job could be replicated by AI and to what degree. In a virtual game designed to simulate real-world decision-making in the automotive industry, the study tested students and executives against GPT-4o, the large language model (LLM) created by OpenAI OpCo LLC, to see how both sides fared in a range of metrics, including sustainable growth and cash flow.

The results showed an AI model consistently outperformed humans, maximizing profit and growth while minimizing risks, according to the study’s authors. But AI struggled to adapt to rare, unpredictable events, such as a global pandemic, as it often focused too much on short-term success. Its faults, however, were similar to those of human participants; it just seemed to fail more quickly.

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The study said AI cannot be ignored in the C-suite and that the risks posed by having AI in such a position are not dissimilar from the risks that humans bring.

“Despite its impressive performance, AI cannot assume the full responsibility of a CEO in markets that serve humans,” the authors said. “Instead, it can significantly improve the strategic planning process and help prevent costly mistakes.”

There is evidence that AI excels at working with data, drawing inferences and predicting success, but there is a question surrounding whether AI has the ability to actually steer a company, taking on the portion of the CEO duties that have less to do with numbers and more to do with intangible skills, such as leadership.

“AI doesn’t have all those complexities of emotion that make leaders great.” Daniel Tsai, a teacher at Toronto Metropolitan University who specializes in AI and business, said. “Lateral thinking, creativity, the desire and impulse for innovation, entrepreneurship; those human traits are rather difficult to replicate, at least at this point in time in history, in AI.”

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Tsai offers a more aspirational view of the CEO position, one that motivates employees and fosters innovation.

He references the Herrmann Brain Dominance Instrument (HBDI), a decades-old assessment tool that looks at different ways of thinking in individuals. It divides the brain into four quadrants: the rational self, the safekeeping self, the experimental self and the feeling self. AI is equipped with some of these concepts in the former categories, such as analysis and organization, but it has yet to prove it can be curious, expressive or passionate.

“The ideal CEO profile under the HBDI uses whole-brain thinking,” he said. “They’re able to go and use any of the quadrants to solve a problem. That’s the missing component here. I don’t see AI at this stage having that type of range of skill.”

While Ma argued that the lack of emotion in AI was an advantage in business, Tsai sees it the other way, citing the relentless drive of CEOs such as Steve Jobs and Elon Musk.

“We’re really missing the human emotion that makes CEOs great,” he said.

Tsai also wonders the extent to which workers would be willing and able to take orders from an AI model. Companies that have sought to institute AI models to measure productivity and even track work have often met with resistance from employees.

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“Humans are driven by humans and AI can’t do that,” he said. “You need to feel authenticity and truth and reliability, and I don’t think people have that in AI. I don’t think people trust it. There’s no emotional sentiment here.”

However, even some leaders seem to think AI can, and should, replace at least part of their job. Of 500 CEOs surveyed in 2023 by eDX LLC, an online learning platform developed by Harvard and the Massachusetts Institute of Technology, 49 per cent said that “most” or “all” of their jobs should be completely automated or replaced by AI.

“With all this discussion about AI being superintelligent, it can surpass us in certain categories,” Tsai said, “But can it be a better human than a human? I don’t think so.”

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