The Signal November 28, 2023

5 Lessons Supply Chain Leaders Can Learn from the Sam Altman Scuffle  

What does AI mean for supply chain strategy? Sam Altman’s recent scuffle with the OpenAI Board surfaces five key takeaways: 1. AI Is for Everyone, 2. Go Faster, Immediately, 3. People Matter More than Tech, 4. Challenge Governance, 5. Build Followership.

Strategy
Kevin O'Marah Avatar
Kevin O'Marah

The drama that unfolded last week with OpenAI CEO Sam Altman will be the stuff of legend decades into the future. For leaders focused on what AI means for supply chain strategy, the story has important lessons – ones to start applying now before your digitization roadmap is rendered obsolete. 

Here are the top five. 

AI Is for Everyone  

Zero100 published a piece with this title in May and has since been proven right. The main message is simple: AI is a technology that everyone can and should use. With over 100 million weekly active users at present and 12+ billion all-time website visits, ChatGPT is proving that everyone is.  

As a productivity tool, generative AI is already transforming creative supply chain work, like writing sourcing plans, designing business process logic, and assessing risk. Meanwhile, traditional AI and machine learning (ML) in planning, manufacturing, logistics, and e-commerce are suddenly under a spotlight. Zero100 members are now conducting “AI Census” reviews to get a clear view of how much AI is already at work in their operations.  

Many are finding they’re farther along than they thought. 

Go Faster, Immediately 

The entire Altman saga took barely 72 hours to unfold. Speed is key in the world of AI for supply chain. Accelerating hardware development (Altman has plans for an NVIDIA rival, plus longer horizon plays for quantum computing are showing promise), exploding data sets, and millions of new users mean that falling behind on AI now is a bad move. 

Former Googler and AI legend Geoffrey Hinton recently sat for a lengthy New Yorker interview, the tone of which was stately, thoughtful, and maybe even a bit ponderous. It was a great read but for supply chain leaders expected to get more done with less, little help figuring out which initiatives to fund and which to kill.  

This is a learn-by-doing situation. Go faster immediately if you want to catch the wave. 

People Matter More than Technology 

Satya Nadella’s willingness to hire all 770+ OpenAI staff shows how important people are in this story. Within the realm of supply chain roles, Microsoft has hired for AI/ML skills at the second highest rate of the nearly 200 leading supply chain organizations Zero100 tracks. About a fifth of their supply chain job posts mention AI/ML skills, while 65% mention digital skills of any kind. The same is true of other prominent digitization leaders like Alphabet, Nike, and General Mills, who use AI not to simply eliminate jobs but to make them more valuable to the business.  

Graph showing correlation between AI/ML-focused hiring and revenue growth.
Source: Zero100.

These digitization leaders have been shown to grow revenue at more than twice the rate of their peers, who are hiring less aggressively for AI/ML skills, demonstrating how technology improves labor productivity and supports better pay for employees who master it in operations. UPS’s new Chicago warehouse, for instance, will include 3,000 robots that improve safety, retention, and performance, while helping to fund generous pay packages for unionized drivers. 

Start here when thinking about AI and job design, and you’ll end up with better people and better profits. 

Challenge Governance 

The OpenAI Board created this mess by firing a respected and very visible leader with little explanation. As a non-profit BoD on a mission “to ensure that artificial general intelligence benefits all of humanity,” maybe some board members felt things were going too fast or that Altman was getting too close to the dark side – who knows. What matters is that Altman stood his ground and challenged his own board. 

Boards are meant to take an independent long view, but this is no guarantee that they are always right. Chief supply chain and operations officers are closer to day-to-day realities, which carries a responsibility to speak truth to power. Organization designs that hamstring operational effectiveness, short-sighted capex budgets, and cost-only views on supply chain value creation are things to push back on. 

Altman did, and it worked. 

Build Followership 

Sam Altman was described in a recent Financial Times article as having “ferocious ambition” and an “ability to corral support.” The fact that his entire team publicly threatened to quit unless the board resigned shows a level of followership rarely seen in business. Legendary tech leaders like Steve Jobs, Bill Gates, and Jeff Bezos have done this to great success. 

Altman, though, seems to take it up a notch by building followership outside his organization and even customers, with broad coalitions of support. The FT quotes him on this: “I think there is this loose fabric of companies coming together, that are all kind of going to work together to point in the same direction. OpenAI-Microsoft is one such example.” 

Think big about your audience when painting a transformative vision. You may have more followers than you think.