Innovation Summit offers insights from Google and BHP

One of the striking revelations on day one of the Financial Review Innovation Summit came from the former chief executive of Google Australia, Jason Pellegrino, who is very concerned about Australia’s readiness for artificial intelligence (AI).

During a panel discussion featuring an impressive group of executives from science, manufacturing, logistics, banking and mining, Pellegrino revealed that Google, the world’s most powerful search engine and dominant force in global advertising, has struggled with implementing artificial intelligence.

He says three or four years ago the sales teams in Google concentrated all their efforts on the key words that are at the heart of Google’s advertising proposition. Now, the sales teams must get out of the office and find out what is happening inside the businesses wishing to advertise with Google.

Pellegrino, who will soon take over as chief executive of real estate listings business Domain Holdings, says it was hard to get the Google staff to change to accommodate this new way of working.

“Whilst it is quite easy to switch those (key word) systems on, it’s tough to get people to change behaviour,” he says.

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“Even when you have the smartest, most well-trained people out there, change is hard. People dislike doing something new, they like doing what is comfortable.

“We spend a lot of our time literally getting our account managers out of the spread sheets, getting their hands off the wheel.”

In getting the audience to think about the human interaction with AI, Pellegrino used the example of driverless cars.

“One of the issues that is not talked about is whether people are willing to take their hand off the wheel,” he says.

CSIRO chief executive Larry Marshall  emphasised the importance of investing for growth.
CSIRO chief executive Larry Marshall emphasised the importance of investing for growth.

Peter Braig

“Humans are the worst possible design for driving a car but try and get someone to let go of the wheel and they won’t.

“Don’t underestimate how difficult it is to get your own workforce to change even once you have dealt with skills and the life-long earning challenges.”

Pellegrino says that while it is obvious that AI will result in job losses and job creation Australia is ill-prepared for the transition involved.

“Actually, where you end up with situations with job losses and job gains it’s often because as an organisation you have not all entered into those transformations and the job changes in those transformations early enough,” he says.

“That’s one thing that I am actually quite scared from an Australian perspective because the data shows that our largest organisations in Australia are about 50 per cent behind our peers in the US and the UK in the adoption of automation technologies.

“That’s our starting point. We have to catch up quickly. If we do we can actually manage that transition very well.”

Pellegrino’s comments about the resistance to change were echoed by CSIRO chief executive Larry Marshall, who emphasised the importance of investing for growth.

“The business has a choice – you cut costs and lose people or you can free up capital to invest in a different future to do innovation,” he says.

The direct relationship between new investment and job creation was brought home by Athalie Williams, the chief people officer at BHP Billiton. She talked about the dramatic changes in the workforce at BHP’s iron ore train maintenance facility in Western Australia.

The maintenance workshop services BHP’s 2000 ore cars, which are used to move ore from the mines to the ships.

“When you think about train maintenance you probably picture a dingy dark workshop, hefty men wielding sledge hammers to get wheels off the train and that, indeed is what it used to be,” she says.

“But we have since built a brand new workshop where we use AI and robotics to move heavy equipment about so you no longer need brute strength to do the work.

“We have suspended tools from the ceiling, we have used automation to redesign and rethink how we do the work.

“That’s really enabled us to achieve a number of things. We now no longer need a full workforce that has 10, 15 to 20 years’ experience doing this work and you no longer need brute strength to do the work.

“That’s enabled us to open up and bring some of the community in. We have gone from 5 per cent women working in that workshop to over 30 per cent in a 12-month period.

“The nature and design of the work is fundamentally different.”

Tony Boyd

tony.boyd@afr.com.au

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