California Management Review
California Management Review is a premier academic management journal published at UC Berkeley
by Vijaya Sunder M and Diti Joshi
Image Credit | Michael Dziedzic
In the ever-evolving landscape of business operations, the emergence of augmented intelligence, which represents human-machine collaboration, is more than just a technological leap; it’s a fundamental shift in strategy and execution. As the boundary between human expertise and artificial intelligence blurs, managers find themselves at the forefront of a transformative era. They face the challenge of making precise decisions, fostering innovation, and driving operational success in an age where human expertise converges with AI sophistication. To address this need, we introduce the Augmented Intelligence Matrix, a practical framework designed to guide managers committed to operational excellence in today’s digital era.
“Artificial Intelligence in Human Resources Management: Challenges and a Path Forward” by Prasanna Tambe, Peter Cappelli, & Valery Yakubovich
“Organizational Decision-Making Structures in the Age of Artificial Intelligence” by Yash Raj Shrestha, Shiko M. Ben-Menahem, & Georg von Krogh
In today’s digital age, machines do more than process data – they understand it. Algorithms have evolved beyond being mere tools; they’ve become collaborators in strategy and operations management. This is the essence of augmented intelligence, a concept often overshadowed by its AI counterpart.1 Unlike traditional automation, augmented intelligence represents a profound evolution of human-machine collaborative capabilities.
Managers should recognize that augmented intelligence exhibits specific characteristics. First, it enables effectiveness as the cornerstone of operational excellence. IBM’s Watson, for example, doesn’t just provide information; it enhances the precision of medical diagnoses and treatment recommendations, making healthcare more accurate and effective.2 Second, innovation, far from being stifled, is amplified by augmented intelligence. Consider AI-driven platforms like FlowMachines, which collaborate with musicians to create music that transcends traditional boundaries, paving the way for new products, services, and business models relevant to the digital world. Third, it ensures that AI systems not only make operational decisions but also comprehend the operational implications of their actions, fostering trust and ethical responsibility within their organizations.3 For example, augmented intelligence initiatives like OpenAI’s Ethics Guidelines contribute to enhanced operational consciousness within machines.
Managers should understand the need to embrace augmented intelligence both strategically and operationally for operational excellence, going beyond viewing individual human or AI capabilities separately or as competitive counterparts.4 To this end, we introduce the Augmented Intelligence Matrix, which serves as a dynamic framework to guide managers in this journey. The matrix acts as a navigational beacon, helping managers make effective decisions, foster creativity, and drive operational success while enabling trust and ethical responsibility.
The matrix stands on two pivotal axes: the Strategic Spectrum (Technological Mastery vs. Ethical Responsibility) and the Execution Spectrum (Innovation vs. Efficiency).
Strategic Spectrum - Technological Mastery vs. Ethical Responsibility: This axis signifies the balance between leveraging technological expertise and ensuring ethical responsibility in the deployment and use of augmented intelligence technologies within organizations.
Execution Spectrum - Innovation vs. Efficiency: This axis represents the balance between fostering innovation and creativity in organizational processes and optimizing existing operations for efficiency.
Each quadrant of the matrix offers a unique vantage point, allowing professionals to strategically align with organizational goals and values (see Figure 1).
Figure 1. The Augmented Intelligence Matrix for Operational Excellence
Innovative Guardians: Organizations and professionals in this quadrant prioritize innovation and ethical responsibility, combining creativity with a strong ethical foundation.
Google X: Known for its ambitious moonshot projects aimed at tackling global challenges. They’ve developed initiatives such as self-driving cars and Project Loon (balloon-based internet), pioneering innovation while upholding strong ethical standards. The self-driving car initiative by Google focuses on ensuring the safe and reliable deployment of autonomous vehicles on public roads. The algorithm assesses the probability of a particular risk, compares it with the potential knowledge or data to be acquired, and leverages this evaluation to guide an ethical decision-making process.5 Similarly, Project Loon’s mission was focused on ethical considerations to provide fast and cost-effective Internet access to underserved communities. The team collaborated with aviation and telecom industry stakeholders, adhered to the highest standards of user data protection, and engaged with local communities to recover and donate valuable equipment while ending their service.6 These initiatives not only push the boundaries of technology but also align with ethical and responsible use.
Microsoft: Pioneers of technology innovation through products like HoloLens, driving augmented reality and mixed reality technology to new heights. Their innovations set the stage for the future while emphasizing the responsible use of technology. An example is HoloLens, where they combine innovation in mixed reality with ethical responsibility. HoloLens is a mixed-reality headset combining augmented reality and virtual reality to create an immersive computing experience. The Microsoft researchers made several ethical decisions while developing HoloLens by addressing inclusiveness and privacy concerns. The team removed sensitive data and added an LED system to ensure safe social interactions and spontaneous negotiations around technology use, reducing the need for regulatory measures.7
Tesla: A prime example of technological innovation, excelling in electric vehicles and autonomous driving technology. Tesla places a significant emphasis on ethical considerations, ensuring that autonomous driving is deployed safely and ethically. Their innovation in the electric vehicle space aligns with ethical principles, promoting sustainable transportation. The electric vehicles are designed and manufactured with a focus to reduce greenhouse gas emissions and encourage renewable energy use. Tesla prioritizes energy efficiency, durability, and recycling, while their autonomous driving technology aims to improve transportation efficiency. Also, Tesla enforces a zero-tolerance policy against human rights violations in its supply chain and conducts audits to maintain high standards.8
Ethical Efficiency Stewards: This quadrant combines efficiency with ethical responsibility, ensuring that streamlined operations go hand in hand with strong ethical practices.
Toyota: A leading automaker known for its production efficiency and commitment to ethical practices. Their efficient production processes are aligned with strict ethical and environmental standards, ensuring that efficiency doesn’t compromise ethical responsibility. An example would be their efficient and eco-friendly manufacturing practices. In order to create environmentally-friendly products, Toyota follows ‘Green Procurement’ involving procurement of parts, materials, and equipment that have low environmental impact from suppliers that always give sufficient consideration to the environment.9
Unilever: Focused on operational efficiency while maintaining strong ethical and sustainable practices. Their commitment to ethical responsibility reflects in responsible sourcing and sustainable business practices, showcasing that efficiency can be harmonized with ethical practices. Unilever collaborates with suppliers and the extraction industry to enhance traceability and uphold responsible sourcing standards for social benefits and trust in brand’s supply chains. Creating strong supply chain policies is the first step, Unilever also includes audit rights in contracts to ensure ethical and sustainable practices are maintained by suppliers.10
Intel: Strikes a balance between technological mastery and operational excellence, emphasizing ethical responsibility by ensuring ethical and sustainable practices in supply chains and manufacturing processes. Their manufacturing efficiency aligns with ethical supply chain practices. They follow responsible mineral sourcing, emphasizing on ethical and sustainable practices to protect human rights within its global supply chain. Intel was an early leader in addressing conflict minerals from the Democratic Republic of Congo region and has established robust systems to ensure manufacturing products are not linked to armed groups while promoting legitimate mineral sourcing.11
Efficiency Pioneers: Organizations and professionals in this quadrant combine efficiency and tech mastery, driving streamlined processes and maximizing operational efficiency.
Siemens: Leverages tech mastery to optimize industrial processes and increase operational efficiency in various sectors, including healthcare and energy. Their tech mastery in industrial processes and healthcare efficiency align to enhance overall operational efficiency. Siemens integrates product knowledge and process innovation through a digital enterprise platform, combining the entire lifecycle of product and manufacturing processes, beginning from conception to disposal. This distinctive capability connects intelligent product and production lifecycles with virtual tools to enable comprehensive production planning and validation thereby improving the operational efficiency.12
Samsung: An efficiency pioneer in the electronics industry, optimizing production processes for quality and cost efficiency. Their tech mastery in electronics manufacturing leads to operational efficiency and high-quality products. Over the years, Samsung developed internal expertise which formed a team of designers with a comprehensive perspective. The company has launched multiple initiatives to optimize its supply chain operations, emphasizing effective inventory control, production planning, and streamlined logistics. Through these optimizations, Samsung was able to reduce costs, improve product availability, and operational efficiency.13
General Motors: Known for efficient manufacturing processes, focusing on cost-effective and lean operations in the automotive industry. Their efficient manufacturing processes leverage tech mastery for maximum operational efficiency. Over the years, General Motors has made a sustained effort to enhance operational efficiency, achieving significant benefits such as cost reduction and increased revenue through efficient throughput analysis tools, and a proven process for improving production. Success stems from early implementation by a strong management expertise, fostering collaboration between R&D and various departments.14
Techno Innovators: In this quadrant, organizations and professionals leverage their technological mastery to drive operational excellence, focusing on innovation and tech mastery.
Apple: Renowned for pushing the boundaries of technology innovation, especially in the realm of consumer electronics and software. Apple combines technological mastery with a relentless pursuit of innovation. For example, their introduction of the iPhone revolutionized the smartphone industry through both technological innovation and mastering the design and manufacturing of their devices. Apple’s innovation strategy is rooted in functional expertise and team members with deep domain knowledge have decision-making authority. This approach acknowledges the rapid technological changes in their markets, requiring informed judgments from those with expertise. By relying on technical experts over general managers, Apple predict the success of technologies and designs in areas like smartphones and computers, even before market feedback is available.15
SpaceX: A revolutionary force in space exploration, innovating with reusable rockets, Mars missions, and satellite internet projects. Their technological prowess and innovation in the space industry are unparalleled. For instance, the development of the Starship rocket demonstrates both their technological expertise and their drive to push the boundaries of space exploration. SpaceX’s affordability and heavy-lifting capabilities enable ambitious missions, such as explorations of Neptune and its moon Triton, asteroid deflection, and launching large space telescopes. Starship may also open doors for interstellar technology tests, planetary defence, and open new possibilities for space science and exploration. With the potential for numerous low-cost launches and high technological mastery, Starship is set to revolutionize scientific research in space.16
NVIDIA: A leader in graphics processing units (GPUs) and AI technology. They emphasize innovation in AI technology while mastering the complex technologies that drive their products. An example would be their development of advanced GPUs that excel in both technological mastery and innovation in the field of graphics and AI. NVIDIA’s strategy centers on its expertise in GPUs and its extensive infrastructure. The rapid iteration processes of the company convert technological designs into market-ready products at a faster pace than competitors. The experienced workforce and dedication to addressing technical challenges set their position as a category leader, allowing them to reshape the industry’s landscape.17
It’s essential to note that while I’ve highlighted specific examples in each quadrant to underscore their primary focus, the axes of Creativity vs. Efficiency and Technological Mastery vs. Ethical Responsibility aren’t isolated concepts that apply exclusively to certain organizations. Instead, these axes represent fundamental aspects that exist within every organization to varying degrees. Ethical considerations are imperative to all firms, irrespective of whether they fall into the specified quadrants. The examples provided merely emphasize the dominant attributes that set these organizations apart. In an ever-evolving landscape, every company must strive to strike a balance between these vital aspects, adapting and optimizing their strategies to leverage augmented intelligence effectively. A holistic approach that combines ethical responsibility, operational efficiency, creative innovation, and technological mastery is paramount for excellence in the age of augmented intelligence.
In the quest for operational excellence, there isn’t a solitary golden quadrant within the Augmented Intelligence Matrix, but rather a dynamic equilibrium achieved through agile movement across these realms. It’s about recognizing that these quadrants are not rigid compartments; firms encompass elements of all. Dynamically navigating this matrix is the key for managers, and the ability to seamlessly transition between these quadrants could create competitive advantages.
Intel Corporation, for example, strikes a balance between technological mastery and operational excellence through its leadership in chip manufacturing. Simultaneously, they emphasize ethical responsibility by ensuring their supply chains adhere to ethical and sustainable practices while fostering a culture of innovation that has led to groundbreaking advancements in semiconductor technology.18
In a similar vein, Procter & Gamble has masterfully navigated the matrix by introducing innovative products and marketing strategies, focusing on creativity and innovation. Simultaneously, they emphasize operational efficiency by optimizing production processes and distribution networks, all while maintaining a strong ethical commitment to sustainability and responsible sourcing.19
Similarly, Salesforce showcases a balanced approach between technological mastery and ethical responsibility, offering expertise in cloud computing and CRM solutions while maintaining stringent ethical data usage and security. They foster a culture of innovation through platforms and partnerships.20
Tesla provides a prime example of navigating this matrix’s complexity, excelling in technological advancements in electric vehicles while also emphasizing ethical considerations in autonomous driving. Their innovation extends to not only their electric vehicles but also their software, such as their Full Self-Driving suite. These companies and many others have agilely navigated the Augmented Intelligence Matrix, illustrating that it’s the balance, the synergy, and the movement across these components that lead to operational excellence and a distinct edge in today’s evolving business landscape.
In conclusion, through the Augmented Intelligence Matrix of operational excellence, we provide a strategic compass for businesses and managers navigating the complex terrain of human-machine collaboration. As augmented intelligence reshapes operational paradigms, the matrix’s dynamic framework emphasizes the pivotal balance between creativity, efficiency, technological mastery, and ethical responsibility. Through real-world examples, this article illuminates the diverse pathways to operational excellence. Embracing this holistic perspective is not just a choice but a necessity in the digital age. By seamlessly transitioning between quadrants, organizations can harness the synergistic potential of augmented intelligence, ensuring they not only survive but thrive amidst evolving global challenges toward creating competitive advantages.
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