The Three Envelopes Joke Applied to AI…
Remember the Three Envelopes joke? An update in the time of AI…
A company’s newly hired CEO sits down for the first time behind the desk of his terminated predecessor feeling quite satisfied at having arrived at the top. Clambering through things at the desk he opens the top drawer to discover a note accompanied by three, numbered envelopes.
The note reads:
“When you encounter your first emergency, open letter one. Open the subsequent letters as needed if other emergencies arise.”
While curious about this message, he suddenly realizes that he is late for his first leadership team meeting, closes the drawer and rushes out, completely forgetting about the letters.
Things go well at first, but within three months the company slips into the red. The board is not happy. After a particularly bruising board meeting the CEO sits slumped behind his desk trying to decide what to do when his memory of the three letters suddenly surfaces. He pulls open the drawer, grabs the first envelope, and reads its message:
“Announce an AI transformation initiative to increase efficiency and effectiveness across the organization.”
His eyes pop wide with excitement at the brilliance of this advice. He starts immediately to draft his grand AI plan.
Staff quickly embrace the idea and the board is duly impressed. He is back in their graces.
Optimism floods the company at first, but within six months profitability has not improved and the board is again impatient. Another bruising call leaves the CEO slumped behind his deck again to ponder his next move when he remembers the letters. He yanks the drawer open, seizes the second envelope, opens and reads its message:
“Announce layoffs and explain to staff and investors that AI efficiency is reducing the need for people.”
With renewed energy he goes right to work on his RIF plan and on the message that he’ll have the HR and PR teams use to explain it. Immediately, the board is impressed with the CEO’s ability to act decisively to leverage the gains of new technology.
Again, he is the golden boy.
But several months later, even with the pain of the RIF now behind them and loads of AI initiatives underway, company revenues are sinking and profitability is slumping to new lows. A board meeting looms the following week, so the anxious CEO again seats himself behind his desk, opens the drawer with great anticipation, pulls out the third letter, and opens it.
The letter reads:
“Make three envelopes.”
By Bill Haines, Partner