Could this happen in the not-too-distant future?
The widespread use of artificial intelligence by Fortune 1000 CEOs has eliminated huge numbers of jobs. This, in turn, has reduced the purchasing power of consumers resulting in year-over-year reductions in sales and profitability for the foreseeable future. Geist Products is one such company that is shrinking and has no practical means of recovery. The stock price is down so much that it cannot be used as cash for acquisitions. Mergers are unattractive as it would further consolidate economic power in the hands of a coterie of trillionaires.
The Geist Products board of directors has convened as special meeting via Zoom, without the CEO present, to considers extreme measures to cut costs. Soon one of the board members suggests a radical solution. Replace the human CEO with an AI CEO — a virtual CEO. This will save tens, if not hundreds of millions of dollars over the coming years in CEO pay and benefits. But how do you create an AI CEO? The board of directors decides to convene another special meeting without the CEO present. They have asked one of the BIG 5 consulting firms, a leader in AI technology development and use, to join and provide advice.
No longer loyal to the CEOs who had previously hired them for restructuring advice, the consulting firm quickly finds allegiance with the board of directors. They recommend a simple solution: Create an AI chatbot to replace the CEO. They describe how to train a chatbot in one or more books written by CEOs who share the board’s viewpoint on leadership and management. The cite books written by prominent current and former CEOs such as Satya Nadella, Marc Benioff, Jeff Bezos, Reid Hoffman, Ray Dalio, Martha Stewart, Charles Koch, Michael Bloomberg, Bill Gates, Larry Bossidy, Michael Dell, Howard Schultz, Phil Knight, Eric Schmidt, Jack Welch, David Packard, Alfred Sloan, Henry Ford, Andrew Carnegie, and so on.
The consultant then dives into a more thorough description. They outline how the books will be used to train the chatbot on each CEOs business philosophy and decision-making heuristics. Once the virtual CEO is trained and goes “live,” vice presidents, general managers, managers, and supervisors can ask the virtual CEO any question about their problems. The virtual CEO will then provide one or more answers based on its business philosophy and decision-making heuristics.
The chatbot could be trained on one CEOs book, if the board prefers a specific business philosophy, or it can be trained on all the books written by CEOs over the last 100 years. The virtual CEO could be a composite of all CEOs over that 100 year period, or it could be a composite based on books written by CEOs over the last 25 years. The virtual CEO could even be trained to make decisions that reflect the prevailing macroeconomic conditions; whether it is in recession or expansion!
The board is impressed! One member asks a penetrating question: “Can the virtual CEO also be trained in the economic ideology that we prefer?” The consultants reply, “That is likely already contained in the books that the CEOs have written. But yes, we can easily train the virtual CEO on classical, neoclassical, and neoliberal economics using standard texts on those subjects.” Another board member asks: “What about the social ideology we prefer? The culture of the company. By that I mean how we think employees should be treated.” The consultant replies, “Yes, that too.” A different board member states: “Make sure the virtual CEO is not trained in any of that Lean stuff!” Another laughs: “Yeah, no silly gemba walks, that’s for sure. Make sure the damn thing is trained in our CEO Playbook, you know, lay people off, close plants and offices, and squeeze suppliers when the going gets tough. It’s tradition, and it works every time!”
The board of directors is now buzzing with excitement. This innovative plan not only cuts a huge labor cost, it will preserve the leadership and management status quo for decades to come, allowing top business leaders to maintain their power and expand their wealth. Being success-oriented, the board of directors sees no problems with this plan. Now it is time to talk about money. They ask the consultant, “How much will it cost? And how long will it take to create a virtual CEO?”
The consultant explains that the process to train the virtual CEO is rather quick, a few months, but there will be ongoing maintenance training and adjustments to keep the virtual CEO up-to-date and free of hallucinations. The consultant says that the cost for creating the virtual CEO will be a half million dollars, and the service contract will cost 2 million dollars per year. One board member whispers to another and smiles, “That’s big recurring savings. More money for us and the shareholders.”
The next task is to give a name to the virtual CEO. After much deliberation, the board decides on a unisex name: “Alex Adrian.” If, for some reason, Alex Adrian needs to someday be fired, the next virtual CEO will be named “Taylor Blake” and given a new synthetic voice. The consultant notes, “The beauty of this is that while virtual CEOs may change, Geist Products’ leadership and management practice, decision-making criteria, and corporate culture will remain consistent over time.” Another board member asks, “When can we get a virtual CFO in place? That’ll save us a bundle of money as well.”
Many other large companies face the same peril as Geist Products. The BIG 5 consulting firms are one of the few growth businesses given the high demand for creating and maintaining virtual CEOs and CFOs. Some of the human CEOs who were fired landed on boards of directors. Most simply retired, seeking to maintain their social capital as they faced a loss of status and fell into irrelevancy.