AI is a conundrum. 1000 new applications a month.
More caps (“Problems” Solutions”) than I like. More bold than I like. Goal: short responses.
Quick review of last 3 issues.
PROBLEM: No controls on AI. From AI companies or government. AI companies are making the best products/services possible. Challenge comes when AI users (our company employees) combine AI Applications with other software. None of us know the outcome.
SOLUTIONS:
Make sure your company liability policy has strong clause protecting company from AI errors or hacking of your AI.
AI employees know all AI applications approved for your company.
AI employees that know exactly what each application is supposed to do.
Who also knows exactly how company employees are using it.
Which other software employees run with each AI application.
Company needs to keep list of all non-approved AI applications being used. Create a policy on how to introduce new AI applications.
PROBLEM: AI use can be costly. Collaborate with like-minded companies. (Competitors in Hospitality and other companies wrestling with same issues.)
COLLABORATION SEQUENCE:
1. CEO, Pres, or at least EVP initially meet with peers.
2. Identify AI Applications to work on.
3. Each company can identify employee(s) best qualified.
4. Lay out tight completion timetable. The results required.
PROBLEM: We each need following AI professionals on our staffs.
Strategic AI Leader
AI Communication Director
AI Operations Director
Technical AI Director
AI Applications Research Director
AI Security Director
Don’t have employee in each? These are AI functions company needs to manage. All critical to proper management of AI
PROBLEM: American industry has 1% of the people needed for above.
SOLUTION: Grow your own. Requires 4 specific skills + generic skills we want in all employees.
Specific skills:
Curiosity.
Education in math and sciences.
Deep knowledge on how to write Prompts. (20-70 line Technical prompts, not Chat GPT prompts)
Understand technical aspects of each AI Application adopted by company. Will each application give company what it needs. (This goes lot deeper than reading specifications. Test specifications.)
(See issue 3, May 22 for details
PROBLEM: HR needs to use skills differently.
SOLUTION: Write AI employment ads differently. Construct interviews differently. Evaluate candidates on different criteria, using different metrics. (Depending on depth of HR organization companies may need to give HR assistance.)
HOSPITALITY OPPORTUNITY: Our industry has fewer moving parts than many. (Sure does not seem that way most days.) Easier to grow our own AI employees. We have many specific applications lending themselves to AI solutions. To eliminate employees? Absolutely not: to make jobs more meaningful for employees. To better serve guests.
SOLUTION: Keep hospitality AI applications isolated to specifics. Then they are easier to control.
CAUTION: Hospitality has many tasks AI can do quickly, efficiently and profitably. Company’s can really screw things up. By trying to consolidate too much. Crawl, then walk, then run.
Hospitality companies: Simplify for at least next 3 years. Why? To reduce risks of hacks and mistakes…that cost millions. Alternative: Multimillion AI specific liability insurance.
Every time we consolidate 2 processes, we increase the complexity by 10x. Combine 3? Complexity goes up 30x. 4? Complexity by 50x. I suspect costs go up same ratio.
Read report from Dataiku, Global AI Confessions Report: CEO Edition 2026. Sub reports on different parts of world. US matched global view. Excellent publication and organization. They offer excellent 3 step program. Report is 36 pages long.
Key takeaways.
PROBLEM: 56% Company’s feel competitors AI is better than their own.
Who cares?
SOLUTION: As long as company is using AI as desired. Measures results. Know pitfalls of AI applications, they are ahead of the curve.
PROBLEM: 80% CEO’s feel their job is at risk if they don’t deliver measurable gains in 2026
TOM’S ANALYSIS: Percent should be much lower in hospitality industry. Using AI for specific applications increases confidence. Back to above point. If company is combining several AI applications. Or combining AI with internal software. Chances of major mistake or hacking skyrockets.
SOLUTION: Use AI for specific applications. That minimizes mistakes. Our company uses AI for very little, but we do more annually. We’ll grow as AI matures.
PROBLEMS:
(1) CEO’s claim control of AI. But rarely are in control of AI. Re-read that sentence.
(2) Fear of investing in wrong AI drives CEO confidence down. (Confidence has been dropping for 3 years.)
SOLUTION: Exactly what should be expected. Like other unknowns, embrace uncertainty. But monitor, measure, evaluate, and assign AI responsibility to key employees.
Key executives need to become more familiar with AI Applications being used. Increased knowledge increases confidence. Human oversite also builds confidence.
PROBLEM: Very few CEO’s are really involved in AI decisions.
SOLUTION: Get more involved. Make sure new AI has measurable proven impact. Have confidence in who IS controlling company AI.
Requiring measurable results from AI is new norm. (Tom’s perspective. Hospitality industry has been more stringent in evaluating AI results. As industry we are ahead. Still many companies who are not using AI efficiently or profitably.)
PROBLEM: AI systems are scaling faster than our confidence in AI. CEO’s no longer question if AI fails, but when. That leaves accountability question. 33% CEO’s feel their job is at risk. (As early as 2026 .)
SOLUTION: Slow process down. Don’t adopt until you are certain. Better to be couple years late. When alternative is multi-million mistake/hack. Protect Company and your job.
Tom’s View: Not adopting AI application may increase costs a little. Perhaps not as much as additional AI would cost. I’ve been in industry 50 years. Hospitality always seems to adopt trends very early. Often before they are proven. Slim difference between leading edge and bleeding edge.
Early in career I was involved with Dole, the food processing leader. They never were first to market with a new product. They wanted to be fast second. Let someone else research and spend big bucks. I also was involved with other major food processing company’s. They always complained about Dole. Why? Not having to lead enabled Dole’s profit margin to be much higher.
GREAT STAT: 51% company’s are keeping humans in the loop. Requiring AI justification. Can’t scale AI (or any other process) until company trusts. Slow down to avoid highly costly or embarrassing mistakes/hacks.
CHALLENGE: 73% CEO’s believe AI could replace at least 2 on executive team.
TOM’S ANALYSIS: That’s harsh way to present statistic. We all continually evaluate our executive structure. When new tech comes, we evolve positions and responsibilities. AI is no different. Restructuring does not mean we get rid of people. We juggle staff.
PROBLEM: AI is integral part of decision making. AI is not being empowered to make decisions when it can. That involves tradeoffs:
Speed versus certainty.
Manual oversite versus better automation.
Tension between what AI can do and what allowed to do.
SOLUTION: I see this as desired outcome. There are always tradeoffs. Why should this be different?
PROBLEM: 76% CEO’s believe they are overly exposed to operational or strategic risks due to only using few vendors.
WHAT????
SOLUTION: Going to be hard in AI with 1000 new applications a month. Fewer vendors we can have easier AI can be tracked and managed.
In early days of computerization many Company’s bought wrong software. Usually more than once. We all just had to upgrade every year or two. AI no different.
Companies are not buying wrong software. They buy software with 5% fewer features. What’s difference between AI software, supply chain software, new financial software, or any other? Every software our company has bought was marginally obsolete in month. We didn’t get rid of software, we kept it through our planned life cycle. AI is no different.
PROBLEM: Only 60% CEO’s participate in more than 50% of company AI decisions.
SOLUTION: CEO’s should be involved in all critical AI decisions. That’s 10-20% of AI decisions. Other decisions? Just make CEO’s aware.
Every US President, receives daily situation report on what’s gone on it the world overnight. I get company version Monday morning. 1-2 line update on key issues from all company execs. Invariably I have clarifying question for 1-2 exec
AI is little more critical. First there is AI Department itself. Then CIO’s, tech, vendors and others. All using AI and making AI decisions. Important for CEO, and probably 3-4 other execs, to get weekly update. It is very easy for those involved with AI to misalign.
PROBLEM: Vendor selection.
SOLUTION: Vendor selection must be made at highest company level. It’s no longer tech decision. AI vendor selection is now strategic financial decision. Very important for overall operations and the company reputation.
56% CEO’s believe managing AI Strategy is becoming core competency role. 57% believe AI can trigger crisis.
79% CEO’s are concerned AI will expose them to legal risk. 46% CEO’s are very concerned or extremely concerned.
Another 51% CEO’s are delaying AI initiatives due to regulatory concerns.
There are no industry regulations. Controlling AI is responsibility of each company.
MAJOR PROBLEM: 96% CEO’s believe employees are using generative AI tools without approval. Worse, 42% think over half their workforce are using unapproved AI.
SOLUTION: Covered in issue one, May 1, 2026.
-AI needs to keep log of all approved AI Applications.
-Where in company each is being used.
-Collect list of all unapproved AI being used, and where.
-Develop strict policy on how people can suggest AI applications for review and approval.
-Written company policy on inappropriate AI use. Signed by every employ and included in their HR file. (Expect to terminate few before policy gets taken seriously. Terminating employees’ company does not want to lose. THIS NEEDS TO BE VERY STRICTLY ENFORCED. Option is opening company to multi-million dollar breach.
Company is unwilling to strictly monitor and enforce termination policy? Make sure you have multi-million dollar AI liability insurance. Not a general liability policy. Specifically written for AI.
Dataiku summarized: Today, almost all companies:
-Lack a unified view of AI, or applications that already exists in company.
-How it is being used.
-How decisions about AI are being made.
-Whether company AI is delivering value.
CHALLENGE: Recent survey:
-Only 19% of companies are prepared to acquire AI skills needed.
-Growing your own AI employees requires HR to collect different data on employees.
-Then recruit, interview, and hire differently.
-Increased emphasis on independent experience, more important than ever.
-Understand direct and indirect competitors. Compatriots now, as well as competitors.
-Be smarter and more strategic.
-Decisive and nimble.
-Energize and inspire employees.
-Adapt to AI, don’t worry as much about anticipation.
Let us know if you enjoyed these 4 articles. Our goal: to provide suggestions, ideas, and practical solutions. Reach out with questions, thoughts, or areas you would like assistance.
Tom Ferree is the founder of Ferree & Associates and SecureEmploy, organizations focused on helping companies find exceptional talent. Helping professionals advance their careers. Since founding Ferree & Associates in 1977, Tom has worked extensively with hospitality companies. Their executives, and rising leaders. Through SecureEmploy, he shares practical career strategies, leadership insights, and real-world advice. To help professionals grow their careers and help organizations build stronger teams.
