Advantexe is pleased to share with our Learning & Development colleagues our thoughts and insights from the floor of the ATD International Exposition and Conference. Each day we will share three megatrends and provide some insights and observations.

Day 2

1) Understanding the inherent bias of AI

@tarynfoye, Advantexe’s Director of Business Leadership Solutions attended an informative session on the interesting and potentially harmful impacts of the current way AI talent development solutions are being developed.

Here are some interesting facts:

• 12% of AI researchers in 2020 were women
• 80% of AI professors are men

The implications of these data are profound. As AI continues to proliferate in the world of talent development key stakeholders and decision-makers need to understand that it all has built-in inherent bias. As we know, all humans have implicit bias and if humans feed data to AI engines, the AI data is inherently biased.

Here are a few thoughts on the impact and implications of these AI-supported biases:

Advantexe is pleased to share with our Learning & Development colleagues our thoughts and insights from the floor of the Association for Talent Development (ATD) International Conference and Exposition. Each day we will share three megatrends and provide some insights and observations.

Day One

“We have the only real AI”

The Advantexe team arrived on Saturday in New Orleans to set up for the Conference kickoff on Sunday. As we were setting up, we took a quick glance around the Expo Hall and there was one very significant trend: everyone thinks they have the only AI-driven HR solution. I literally saw 2 companies with booths right next to each other claiming they have the only solutions with “real AI.”

The takeaway from our perspective is there are a lot of Training and HR solution vendors making a lot of claims without really understanding what their claim is, or worse, what the AI solution really is. It seems like they are throwing the words out there to see what sticks but as most L&D organizations have learned, real AI is not easy and there must be a well-defined application.

One of the best sources of inspiration for my blogs is actual learning moments coming directly from the classroom. This afternoon one of my teams engaged in a very complex high-tech industry business simulation asked for a “micro-lesson” around the concept and importance of the Contribution Margin. I shared some insights with the participants, and I promised I would turn the conversation into a blog.

What is Contribution Margin?

At the highest level, Contribution Margin is a financial metric used to assess the profitability of a product, service, business line, or an entire business.

Conceptually, it presents the amount of revenue remaining after variable costs have been subtracted, which contributes to covering fixed costs and generating profit.

Here's a breakdown of what you should know about Contribution Margin:

• Definition: Contribution Margin (CM): Is the difference between sales revenue and variable costs.
• Formula: Contribution Margin = Sales Revenue - Variable Costs

Key Concepts

Here are two important key concepts related to understanding Contribution Margin; variable costs and fixed costs:

• Variable Costs: Costs that vary directly with the level of production or sales volume (e.g., raw materials, direct labor, sales commissions).
• Fixed Costs: Costs that do not change with the level of production or sales volume (e.g., rent, salaries, insurance).

One of the most frequently asked questions in our Business Acumen training sessions is about large companies selling off business units or brands. It inevitably happens after a discussion on frameworks of strategy where we share that the most successful companies on the planet choose a strategic value proposition to their customers, execute it flawlessly, and most of all, stick with it over time.

After the introduction of the framework, the typical question sounds like this, “Hey Rob, so if I understand this correctly, the best companies look at their entire portfolio and have the same value proposition for each business unit or brand? Do they have to? You see, here at XYZ Corporation, we have one business unit that is the Product Leader and has the most innovative products, another that is all about great customer service, and a third that competes as a value brand on price. Oh, but sometimes that is switched around based on region.”

What could possibly go wrong with a business strategy like that, I say.

Which brings me to today’s news that Kraft Heinz is exploring the sale of its Oscar Mayer business. Oscar Mayer is world renowned for meat and its biggest seller of the good old Oscar Mayer wiener. The reason? Kraft Heinz is reconfiguring its portfolio to target a more health-conscious, nutritious consumer and unfortunately, hot dogs and other processed meats don’t fit that goal.

Some analysts thought a fast-food slowdown would never happen, but it is here and a lot of economists and business leaders are trying to make sense of it.

KFC, McDonald's, Starbucks, Pizza Hut, and many other similar fast-food retailers are reporting significant sales slowdowns and it should be very concerning to all business leaders.

Starbucks, in particular, experienced a notable drop in same-store sales for the latest quarter, sending its shares plummeting by 17% on Wednesday. Joining the fray, Pizza Hut and KFC also reported shrinking same-store sales figures. Even industry stalwart McDonald's acknowledged the challenging landscape, adopting what it terms a "street-fighting mentality" to retain value-minded consumers.