- 23 June 2025
- Dr. Chandra Bondugula
Mastering AI in Decision Making
There is growing pressure on managers and company executives to make the best choices at work. 85% of company executives have experienced decision stress, and three-quarters report that the number of decisions they must make each day has increased tenfold in the past three years, according to research by Oracle and Seth Stephens-Davidowitz.
On average, poor decision-making costs businesses at least 3% of their profits, translating to a loss of almost $150 million annually for a $5 billion company. The consequences of bad choices go beyond money, though; a single poorly handled social media exchange with a disgruntled customer, a delayed shipment to a crucial supplier, or an IT system malfunction may all quickly become out of hand.
This article is all about understanding whether AI would be helpful in decision making. If so, how will AI help in framing decisions.
The Critical Role of AI in Enhancing Decision Making
In today’s fast-paced world, AI technologies are reshaping how business leaders approach decisions. AI offers numerous advantages, from improving data processing capabilities to enabling faster, more accurate predictions.
According to a 2023 McKinsey report, AI-powered decision-making tools can increase productivity by up to 40%, offering significant improvements in decision speed and accuracy. This is crucial in high-pressure scenarios, where every decision counts.
Real-World Example:
Unilever, for example, uses AI to track palm oil production, identifying environmental risks like deforestation through satellite imagery and mobile phone data. This proactive approach helps mitigate reputational and regulatory risks while optimizing supply chain decisions.
Statistical Insight: A study by Oracle and Seth Stephens-Davidowitz found that 85% of business leaders have experienced decision stress. AI tools can alleviate this pressure by offering real-time insights and predictive capabilities that enhance decision-making under time constraints.
How Can AI Support Leaders in Making Better Decisions?
AI can significantly enhance decision-making by providing a robust framework for data analysis and prediction. Here’s how:
1. Real-Time Data Tracking and Predictive Analytics
AI’s ability to process large volumes of data in real time allows decision-makers to track business developments as they unfold. For example, the Port of Rotterdam uses AI to streamline decision-making in port operations by providing real-time data on vessel arrivals, container traffic, and safety calls.
AI’s predictive capabilities also help anticipate potential issues before they arise. Whether it’s identifying supply chain disruptions or foreseeing market shifts, predictive analytics help leaders take proactive measures.
2. Virtual Role-Playing and Simulation for Training
Many industries are turning to AI-powered virtual training tools to help employees and managers improve their decision-making skills. Verizon, for instance, uses virtual reality (VR) simulations to train customer service agents to handle difficult situations, improving both their decision-making abilities and interpersonal skills.
Similarly, AI-driven simulations are used in various sectors such as healthcare, policing, and military training to prepare individuals for high-pressure scenarios where quick and informed decisions are crucial.
What Challenges Do Leaders Face When Using AI for Decision Making?
While AI offers immense benefits, it also presents challenges. One major issue is the potential for bias in AI models. If AI systems are trained on biased data, they may inadvertently reinforce biases in decision-making. To ensure accurate and fair outcomes, it’s essential to use diverse, high-quality data when developing AI tools.
Data Security and Privacy:
Handling sensitive data raises concerns about security and privacy. Companies need to implement robust data protection measures to safeguard customer and organizational information.
Dependence on AI:
While AI tools can enhance decision-making, there’s a risk of over-reliance. Leaders must maintain their judgment and expertise, ensuring AI complements rather than replaces human decision-making.
Can Generative AI Enhance Leadership Decision Making?
Generative AI, including tools like OpenAI’s ChatGPT, Google’s Bard, and Meta’s Llama 2, can provide valuable insights and act as virtual advisors. These AI models analyze vast amounts of data and offer suggestions, summaries, and alternative scenarios that can aid leaders in making more informed decisions.
Example: In healthcare, AI tools are being used to help clinicians make decisions by sifting through large datasets to identify key information for diagnosing conditions, minimizing cognitive load, and improving patient outcomes.
Generative AI can also serve as a “sounding board” for business leaders, allowing them to test ideas, simulate different outcomes, and refine their strategies before making crucial decisions.
How Can Leaders Benefit from AI While Mitigating Risks?
Business leaders can harness the power of AI while mitigating potential risks by adhering to a few best practices:
1. Be Domain-Specific
Generative AI performs best when applied to specific, well-defined problems. For instance, AI models can be highly effective in areas like marketing, finance, and software development, where there’s structured data and established processes.
2. Understand the Experience Curve
AI adoption should be tailored to the expertise of employees. Experts may rely on AI to “sense check” their decisions, while novices can use AI to accelerate learning and gain exposure to various scenarios. Striking the right balance between human judgment and AI support is key.
3. Maintain Expertise Currency
As AI continues to evolve, leaders must ensure they and their teams stay up to date with industry developments. Just as pilots need to practice manual control, business leaders should maintain their skills and judgment alongside AI tools.
4. Focus on Effective Prompt Engineering
As AI models improve, the ability to ask the right questions becomes essential. Leaders should invest in “prompt engineering” to ensure they are getting the most relevant and useful responses from AI tools.
Turning Insights into Impact
In the complex world of data, leadership demands more than intuition—it requires intelligent, strategic insights. At SHC Technologies, we engineer AI solutions that transform information overload into clear, actionable strategies.
Our AI-powered decision intelligence platform empowers organizations by combining advanced algorithmic processing with human expertise. We also create intelligent systems that generate predictive insights, perform real-time data analysis, and provide immersive decision training.
At SHC Technologies, we don’t just analyze data—we unlock its transformative potential by putting human intelligence at the center of technological innovation.