Business Leaders Should De-emphasize Deterministic Decision-making in the Era of AI -- Mark Stouse, ProofAnalytics.ai

By Lane F. Cooper, Editorial Director, BizTechReports

One of the biggest problems facing business leaders in the era of AI may well be their tendency to have a deterministic perspective. Deterministic thinking among company executives is a holdover from decision-making styles that became prevalent during the industrial era when efficiency, standardization, and predictability were critical to managing large-scale, repetitive processes. Businesses themselves were often thought of — and described — as machines that built the products and services they brought to market.

Mark Stouse, CEO, ProofAnalytics.ai

While it was a perspective that effectively served leaders through the 20th century, Mark Stouse, CEO of ProofAnalytics.ai, suggests in a recent interview with BizTechReports that an inability to kick the "deterministic thinking" habit could pave the path to perdition today.

He is in good company. Research and analysis from Harvard Business Review and McKinsey – among many others – have spent years pointing out the imperative to pivot away from analytical frameworks that assume businesses can be run by iron-clad formulas.

"Too many executives rely too heavily on deterministic thinking and assume that they will always get a specific outcome if they take a certain action. However, in dynamic and complex environments, this approach is not sufficient," says Stouse. More often than not, he suggests, business decisions come down to assessing the odds and placing bets.

In the era of AI, Stouse argues that executives should adopt a more probabilistic perspective and understand that human behavior and external factors introduce significant uncertainty and unpredictability; probabilistic thinking involves acknowledging that external factors beyond our control influence a growing portion of outcomes.

This is where modern causal analytics tools come in. Properly developed, managed — and, most importantly, understood — this rapidly emerging and evolving category of technology can support decision-making by providing the mathematical means for analyzing causality and assessing probability more effectively.

Accepting this line of thought, however, is easier said than done.

As Mike Walsh, the author of The Algorithmic Leader: How to Be Smart When Machines Are Smarter Than You, wrote in a 2020 edition of HBR: "Thinking probabilistically takes some getting used to, as the human mind is naturally deterministic. We generally believe that something is simply true or false."

Stouse points out that the current challenge with machine learning — and other pattern-based AI — is that it assumes that past-is-prologue, meaning that previously manifested patterns are deterministic indicators of the future. This can lead to flawed assumptions and unintended consequences.

Assessing “Truth” in Constant Flux

When it comes to business, explains Stouse, any given situation — and therefore the "truth of the moment" — is in a perpetual state of change.

"The business environment is in constant flux and always becoming more complex. Humans generally dislike change and complexity, making it challenging for businesses to adapt. AI and analytics offer an excellent solution for better understanding and navigating the dynamic and complex business landscape to anticipate the most probable outcomes," he explains.

Providing the market with such a tool is the mission that drives ProofAnalytics.ai, which offers sophisticated analytics solutions that help businesses optimize their marketing and operational strategies.

"More to the point, it is a solution that leverages AI so leaders can challenge fundamental business assumptions, reassess ongoing strategies with fresh data, and uncover complex interactions between various business functions," says Stouse.

AI's utility extends to analyzing team dynamics, assessing the impact of different departments on each other, and optimizing business activities for better results. It can also identify roles critical to team success, potentially influencing compensation structures and organizational culture.

"As businesses continue to navigate complex markets and evolving competitive landscapes, solutions from companies like ProofAnalytics.ai not only offer critical insights but also drive more informed and adaptable decision-making processes...but only if you have the right mindset. A deterministic outlook is inflexible and brittle — and we are seeing this play out today – whereas the probabilistic view is not only reflective of reality but emphasizes the importance of agility, speed, and elasticity in our responses," concludes Stouse.

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