Responsible leadership in the age of AI
(Part 1)
Call it serendipity or Divine Providence. During the week of May 5 to 11, I accompanied a group of top Philippine business people to take a short upskilling course at one of the top business schools in the world, the IESE Business School in Barcelona, Spain.
This was part of the Executive Education course at the University of Asia and the Pacific called the Strategic Business Executive Program that upgrades the economic literacy of top executives of both private and public institutions. With the ongoing thrust in the business world of upskilling, reskilling, and retooling the work force, the very first example has to be set by the CEOs and top executives themselves. Among other knowledge and skills, they need an appreciation of how Artificial Intelligence (AI) can enhance their ability to lead.
I often remind top executives that even those who obtained their MBAs or other advanced degrees from the best business schools five or more years ago are already obsolete today in their knowledge of the tools and technologies of what is called the Industrial Revolution 4.0 which encompasses AI, Robotization, the Internet of Things and Data Analytics, among others.
We were fortunate to learn of the IESE Custom Program for top executives that is considered the best in the world. IESE professors conduct specialized programs on specific topics that address the upskilling needs of management personnel of corporations all over the world. Those interested in this very valuable training program can contact Dominique Hudson, Program Manager of the IESE Custom Program at DHudson@iese.edu.
Little did we anticipate that in the very same week during which some of the top professors of the IESE Business School would be helping us attain a minimum understanding of AI and its responsible use in business, the whole world would be waiting with bated breath the election of a new Pope during the Conclave that was held after the death of Pope Francis the week before.
Even less did we expect that a little known Cardinal by the name of Robert Francis Prevost, whose chances of being elected Pope was rated by the pollsters at 1%, would be elected Pope. And that he would choose as his papal name Leo XIV because, following the example of Pope Leo XIII, he would give the highest priority to proclaiming to the world the social doctrine of the Church concerning AI and all matters related to the Industrial Revolution 4.0 in the same manner that Pope Leo XIII wrote the first social encyclical, Rerum Novarum, that delved deep into the ethical issues involved in the First Industrial Revolution (1790 to 1830), especially about the obligations of employers to their workers.
The workshop participants from the Philippines spent one whole day under the supervision of Professor Oscar Gonzalez-Peralta of IESE who wrote the case used for the workshop. As in all case discussions inspired by the Harvard Business School methodology, we were reminded that cases are designed to promote class discussion rather than to illustrate effective or ineffective management of a given situation. Before the actual case discussion, the participants were asked to read some materials defining some key concepts. First, AI was defined as a machine’s ability to perform the cognitive functions we associate with human minds, such as perceiving, reasoning, learning, interacting with the environment, problem-solving, and even exercising creativity (McKinsey and Company, 2024).
At the present state of technology, AI capabilities are as follows: perception, including audio, visual, textual, and tactile (e.g., face recognition); decision making (e.g., medical diagnosis); prediction (weather forecasting); automatic knowledge extraction and pattern recognition from data; interactive communication (e.g., chatbots, virtual personal assistants); logical reasoning (e.g., theorizing from premises); and creativity (e.g., text, images, sounds).
These capabilities can be deployed through the use of a long list of AI technologies such as chatbots (natural language processing); LLM or large language models (ChatGPT, Copilot, Gemini): text-based knowledge generation; virtual personal assistant; image and video classification; object detection and localization; language understanding; sound detection and recognition; sentiment analysis; language translation; face detection; person identification; LLM image and video generation; speech to text; emotion recognition, physical devices (IoT or the Internet of Things); recommendation; targeting; autonomous vehicles; and virtual reality and optical character, handwriting recognition.
There is no question that all these capabilities enabled by AI technologies can do much good to enable human beings to be more productive in their work, home, and leisure.
In the case chosen for the workshop to probe into the ethical principles that come into play in the use of AI, the industry involved was the healthcare sector, and in particular residential care homes. In the demographic transition that occurred over the last 20 years, especially in Western Europe and East Asia (Japan, South Korea, Taiwan, Hong Kong, and Singapore), the rapid ageing of the population and the need for ever increasing care for the aged made residential care homes more profitable for healthcare entrepreneurs. The Philippine workforce has especially benefited from this ever-increasing need for caregivers, nurses, physical therapists, and other healthcare professionals. A significant portion of the Overseas Filipino Workers (OFWs) work in this industry. It may take time before this industry becomes a major component of the healthcare sector of the Philippines itself because of the cultural preference of Filipinos to minister to the needs of their ageing relatives in their respective homes. The increasing participation of our OFWs in residential care homes all over the world, however, makes it necessary for us to understand the ethical principles at play in the application of AI to the important humanitarian work of taking care of the ageing population in residential care homes.
The case discussed by our business delegation was about a family enterprise called “Old Tree: Residential Care Homes,” written by IESE Senior Lecturer Oscar Gonzalez-Peralta. The residential long-term care industry has experienced rapid growth over the last three decades as a consequence of the increased demand for long-term services and support (LTSS). Especially in countries like Japan, South Korea, Taiwan, and Singapore, the population of older adults has grown, and life expectancies have increased for people with disabilities and chronic conditions. Care work, however, must increasingly turn to technologies that can be provided by AI to lighten the burden on the human workers.
As described in the case, care work can be incredibly taxing, both mentally and physically. In addition to monitoring health, planning care, administering treatments, dressing, preparing meals, and helping users with small tasks, care workers perform many other functions that can be physically demanding. LTSS care workers are expected to use their own bodies to move patients many times a day — including in and out of bed, to and from the bathroom, and in and out of bathing chairs. As a result of the high physical demands of this work, the caregivers experience significantly higher rates of on-the-job injuries.
It is very understandable that those who own and manage residential care homes are among those who are most eager to use AI to improve their margins and offer a differentiated value proposition, given the evolution of society and the sector. If one considers the vast potentials of the technological offerings of IR 4.0 (AI, Robotization, IoT, and data analytics), it is understandable that a sector like the residential care homes industry would want to waste no time in adopting the use of robots, AI, and data analytics in serving their clients and patients.
(To be continued.)
Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.
