Building Teams in The AI Age

While many think AI will be just taking over, I argue humans in the loop will matter a lot to smooth out the worse outcomes of an AI-first organization.

Consider that, at least for the current paradigm, as AI has been training on human data, it might show the same psychological traits as us humans (in terms of outcome, not qualia).

Things like optimism, kindness, and companionship. But also stupidity, deception, and malice.

Of course, the way the AI processes these is not in a “human way” but with the same outcome; thus, from the outside, it is as if the AI had these features, simply as a result of generalizing from the given human data.

In short, an AI trained on human data with a human-like architecture (the neural net is far from being a human brain, yet the neuron-like structure of our brains inspires it).

Why would we expect this AI to showcase traits different from what we humans showcase?

Not surprisingly, recent research shows that AI has started showcasing a deception capacity.

Thus, even more now, powerful AI tools in the hands of “stupid humans” can cause organizational damages that can’t be reversed. Thus, my argument here is that in the age of AI, the organizational risk of putting these tools in the hands of the stupid is much higher than in the past.

Therefore, and that’s the key take here, now more than ever, understanding human stupidity not only helps you out in managing it at the human level but also at the human-machine interaction level.

That is why you want to ensure you have “an intelligent system” to filter out, smooth out, and possibly weed out the irreversible effects of stupidity, which starts with understanding its psychological features.

I want to return to a classic on human stupidity, The Basic Laws of Human Stupidity, by Carlo M. Cipolla, and adapt it to build teams in the Age of AI.

The Business Engineer is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Subscribed

A Quick Intro To The Basic Laws of Human Stupidity

The central premise of The Basic Laws of Human Stupidity by Carlo M. Cipolla is a pamphlet that was supposed to circulate only in a small circle of friends.

Originally written in English by internationally renowned economist Cipolla, this book became a massive success, especially and paradoxically in Italy (Cipolla’s original work was in English).

Then, it became a massive bestseller and was translated into many languages.

The book’s key idea is addressing human stupidity in a non-trivial way, with a few basic laws to understand, the counter-intuitive ways in which stupidity is the most dangerous of the possible negative traits humans might showcase.

Indeed, this is based on five basic laws:

Always and inevitably, each of us underestimates the number of stupid individuals in circulation. The probability that a given person is stupid is independent of any other characteristic possessed by that person. A person is stupid if they cause damage to another person or group of people without experiencing personal gain, or even worse, causing damage to themselves in the process. Non-stupid people always underestimate the harmful potential of stupid people; they constantly forget that at any time, anywhere, and in any circumstance, dealing with or associating themselves with stupid individuals invariably constitutes a costly error. A stupid person is the most dangerous type of person there is.

In short:

The first law emphasizes that no matter how many stupids there are in circulation, we’ll always underestimate their ratio in a group.

The second law is also critical, highlighting how stupidity is independent of anyone’s characteristics. This means that he emphasizes how the ratio of stupidity in a group will be the same, or at times even higher, in what from the outside might seem groups that should come with more intelligent people. He mentions Nobel laureates as a prime example.

The third law is the one I’ll use to derive the matrix. This is the basis to determine the actions of a stupid person, but also the identification of four main types of person that, in a way, have to deal with, contain, filter out, or be badly influenced by the stupid: the helpless, the bandit and the intelligent.

The fourth law points out how often the effect of stupidity comes from the fact that non-stupid people tend to underestimate or not fully understand the effect of stupidity.

The fifth law makes into a corollary that stupidity is the most dangerous of human traits, which can cascade into irreversible collective damages.

The Third Basic Law & The Four Types of People

A person is stupid if they cause damage to another person or group of people without experiencing personal gain, or even worse causing damage to themselves in the process.

As I’ve explained, The Human Cooperation Matrix, derived from one of my favorite books, The Basic Laws of Human Stupidity, is an attempt to help myself weed out and avoid the stupids.

Not forgetting also how to deal with the bandits while, where possible, supporting the “helpless” to see if she/he can turn into the “intelligent” side and focus on working primarily with the “intelligent,” keeping in mind that the stupids and bandits will always be around, trying to mess things up.

Let me explain…

The Stupid-Out Matrix

As per The Basic Laws of Human Stupidity, you will deal with four types of people:

Bandit: engaging in win-lose actions. The bandit wins, and the other person and group of people loses.Helpless: engaging in lose-win actions. The helpless loses, and the other person and group of people win.Intelligent: engaging in win-win actions. The intelligent wins and the other person and group of people also win.And Stupid: engaging in lose-lose actions. The stupid loses, and the other person and group also lose.

As you’ll see, a few practical considerations come from this simple quadrant.

A key premise is as we cut the square with a diagonal, you’ll notice that both the helpless and the bandits have a part of the quadrant leaning toward the intelligent and another toward the stupid.

Therefore, as you’ll see, these two types of people will also play a key role in either filtering out or enhancing the stupid’s role in creating systemic messes.

Indeed, another key point to take into account is both helpless and bandits might be intelligent-leaning (I call it the “trainable helpless” and the “intelligent-leaning bandit”).

As Cipolla explains, stupids’ actions are very hard to predict because, by definition, the stupid doesn’t follow any particular logic. Even on the losing end, the helpless and bandit actions might be more predictable.

Thus, a few anticipations below:

We’ll use this as the basis for the analysis to build a team

The Stupid Quadrant

Provided that as per The Human Laws of Human Stupidity, no matter the domain, you will always have a constant ratio of “stupids” (those engaging in lose-lose actions) you’ll have to manage somehow.

How can we minimize the impact of “stupid” on an organization?

By enabling a narrow focus on the single thing the stupid is good at and ensuring this narrow focus gets channeled into the “intelligent” side of the organization (broader win-win framework).

There is a caveat about the stupid side, but I’ll tackle it in the end.

The Helpless Quadrant

While for the “stupid” you want to contain, narrow the actions to fit into a very specific competence, useful to the organization.

You want to use the opposite approach for the helpless yet competent but with a mindset problem.

Indeed, the main issue with the helpless is if she/he keeps engaging in lose-win actions, that will cause burnout.

The focus is on transforming helpless but competent individuals into intelligent contributors by cultivating a mindset that promotes win-win actions.

This involves helping them understand the broader context of the company so they can see how their actions affect the organization as a whole.

By enhancing this awareness, they can move beyond their narrow focus and act in ways that align with the company’s goals.

However, this approach should only be applied to individuals whose helplessness stems from a fixable mindset issue and who possess high professional competence.

Unlike the “stupid” individuals, they benefit from increased contextual understanding, enabling them to make meaningful contributions.

As I’ll show you, the trainable, helpless, and intelligent-leaning bandit will help filter the stupid.

The Bandit Quadrant

The thing with the “bandit” (those engaging in win-lose actions) is that, in theory, it’s easy to say they must always be weeded out.

In practice, many of these are top performers, high achievers who desire to be the best at their work. In short, they are intelligent-leaning.

And you don’t get many of these people around.

To address the bandits, the key is determining whether their behavior is fixable and whether they are highly competent or even top performers.

Suppose they possess the potential to shift toward the intelligent side of the matrix. In that case, it might be worth engaging with them, as their transformation could bring significant value to the organization.

The challenge with bandits lies in their high individual performance, which can make them valuable despite their misalignment with the organization.

To get the best out of a high-contributing bandit, the focus should be on leveraging their skills while minimizing their potential negative impact on team dynamics and company culture.

One approach is to allow the bandit to work independently, giving them space to perform exceptionally without disrupting the team.

However, the ultimate goal is to channel their success into the organization in a structured way.

This can be achieved by capturing their accomplishments and turning their methods into replicable processes, contributing to team growth and scalability.

By proceduralizing their success, you enable the organization to benefit from their output while gradually integrating their contributions into the company’s broader framework.

Over time, this may also create an opportunity to guide them toward alignment with the intelligent side, fostering both individual and organizational success.

As I’ll show you in the end, the intelligent-leaning bandit, together with the trainable-helpless, will help filter the stupid.

The Intelligent Quadrant

For the intelligent, the focus should be on enabling their growth and ensuring they remain engaged and aligned with the organization’s long-term goals.

This involves addressing three key areas:

Sustaining Growth: The intelligent must have clear opportunities for continuous learning and development. For those with a narrow focus, a structured, linear career growth path is essential to keep them motivated and ensure they feel valued within the organization. For those with broader capabilities and managerial potential, a more flexible career trajectory should be designed, allowing them to take on diverse challenges and responsibilities to maintain engagement and prevent attrition.Protecting Against Burnout: The actions of the stupid, helpless, and bandit must not overburden or frustrate the intelligent. This requires creating a supportive environment where inefficiencies or misaligned behaviors from others are managed effectively, ensuring the intelligent can focus on their strengths without being drained by others.Promoting Collaboration for Organizational Growth: While the intelligent contribute significantly on an individual level, their potential for driving broader organizational success depends on their ability to collaborate and empower others. Encouraging cooperation and a mindset of shared success can help ensure that their impact extends beyond their immediate role or scope. For those with broader managerial potential, developing leadership skills and involving them in cross-functional projects can help embed their contributions into the organization’s culture and processes.

By tailoring career paths to their mindset and potential, which are linear for narrow-focused individuals and flexible for broader-minded ones, the company can ensure that the intelligent remain engaged, thrive long-term, and contribute to sustained organizational growth.

The presence of the intelligent and the ability to create an intelligent system, able to channel the trainable-helpless and the intelligent-leaning bandits, will play a pivotal role as a filtering mechanism to the mess the stupids can create.

The Stupid’s Dilemma

A major caveat on the “stupid” quadrant.

The stupids represent the most challenging group to manage, as they are the furthest from the intelligent quadrant and often have the potential to cause the greatest harm to the organization.

Unlike the helpless or bandits, who can be guided into the intelligent area with relative effort, rehabilitating a stupid is significantly more difficult and resource-intensive.

Their lack of awareness or poor decision-making often leads to actions that fail to contribute positively and can actively disrupt organizational goals, undermine team dynamics, and drain the energy of others, particularly intelligent individuals.

This makes them the hardest group to align with the company’s vision.

Given the difficulty and potential risks, careful consideration is needed before attempting to “rehabilitate” a stupid.

The organization must assess whether the effort is worth investing time and resources, as success is far from guaranteed.

In most cases, minimizing their impact may be more effective through strict oversight, reassignment to roles with limited influence, or, if necessary, transitioning them out of the organization to protect its culture and long-term success.

The organization can focus on driving growth and alignment with the intelligent quadrant by prioritizing efforts on those more east to “rehabilitate” like the helpless or bandits.

While minimizing the risks posed by those in the stupid category, especially to prevent the burnout of the intelligent.

Thus, the amount of damage and the unpredictability of the stupid make it one of the hardest human categories to deal with to prevent systemic damage.

A Filtering Mechanism To Stupidity

Last corollary.

The key to protecting the organization from irreversible damage caused by the stupids lies in leveraging the strengths of those closer to the intelligent quadrant.

The helpless individuals near the intelligent side, the bandits with high contribution potential, and the intelligent individuals must work together to act as a filter, ensuring that the stupid’s actions are contained and their impact minimized.

When the helpless and bandits are closer to the intelligent quadrant, they can be guided to align their actions with organizational goals, making them valuable allies in maintaining a healthy organizational culture.

By collaborating with the intelligent, these individuals help create a strong, cohesive force that prevents the stupids from gaining influence or causing harm.

Together, they can create processes, structures, and accountability measures that act as safeguards against poor decision-making or disruptive behavior.

As more of the organization shifts toward the intelligent quadrant, it creates a filtering effect where the stupids are either rehabilitated (though rarely) or rendered ineffective in their ability to cause damage.

This dynamic ensures the company remains resilient, with its core aligned toward growth, collaboration, and long-term success.

The closer the majority of the organization moves to the intelligent side, the safer the company becomes, as this alignment effectively isolates and neutralizes the negative effects of the stupids.

When the company loses the intelligent side of it, the helpless and bandits quadrants will move toward the stupid side, thus posing a survival threat to the organization.

Putting It All Together: Filtering Out Stupidity, While Channeling Helplessness and Banditism Toward Win-Win Actions, Through An Intelligent System

Thus, as we’ve seen so far, among the four main types of people.

It’s critical that the trainable-helpless and intelligent-leaning bandit work with the intelligent to proceduralize a system that keeps the stupid out or narrows them down to such simple tasks that can’t pose an organizational threat.

While it’s worth investing time in these three categories (trainable-helpless, intelligent-leaning bandit, and intelligent), it’s probably worth minimizing, filtering out the non-trainable helpless and the stupid-leaning bandit and, of course, the stupid.

No matter how much you try, these will team up to amplify stupidity and mess things up irreversibly.

Recap: In This Issue!1. AI and Human TraitsAI as a Reflection of Humanity: Since AI is trained on human-generated data and built on neural architectures inspired by the human brain, it is reasonable to expect it to exhibit human-like psychological traits, both positive (e.g., optimism, kindness, companionship) and negative (e.g., deception, shortsightedness, stupidity).Humans in the Loop: Despite AI advancements, human oversight remains critical to managing and guiding AI effectively, underscoring the importance of understanding human psychology.2. Cipolla’s Laws of Human StupidityThe five laws identify stupidity as the most dangerous human trait, highlighting its counter-intuitive prevalence and systemic risks.Core principles include:Underestimation: We always underestimate the number of stupid individuals.Independence: Stupidity is independent of other traits like education or background.Lose-Lose Actions: Stupid individuals harm others and themselves without gain.Underestimation of Harm: Non-stupid people often fail to grasp the damage stupidity can inflict.Dangerous Consequences: Stupidity is the most dangerous human characteristic due to its ability to cause irreversible harm.3. Human Cooperation MatrixCipolla’s third law is the foundation for a matrix categorizing four types of individuals:Intelligent: Engage in win-win actions (benefiting both themselves and others).Bandit: Engage in win-lose actions (benefiting themselves at the expense of others).Helpless: Engage in lose-win actions (harming themselves to benefit others).Stupid: Engage in lose-lose actions (harming themselves and others).This matrix provides a lens for managing organizational dynamics, particularly in team building.4. Strategies for Managing Quadrants in TeamsThe Stupid Quadrant:Containment: Narrow their focus to specific, harmless tasks to minimize organizational disruption.Caution: Rehabilitation is often resource-intensive and rarely successful.The Helpless Quadrant:Transformation: Focus on training competent but helpless individuals to adopt a win-win mindset.Awareness Building: Help them see the broader organizational context to align their contributions with company goals.The Bandit Quadrant:Strategic Management: Differentiate between “intelligent-leaning” bandits (high performers) and “stupid-leaning” ones.Integration: Allow high-performing bandits to operate independently while proceduralizing their successes for organizational benefit.The Intelligent Quadrant:Growth and Retention: Provide tailored career paths and development opportunities.Burnout Prevention: Protect them from the negative effects of others (e.g., stupidity or inefficiency).Collaboration: Foster teamwork and cross-functional engagement to amplify their impact.5. Minimizing Stupidity’s ImpactBuild a system where intelligent individuals, trainable helpless individuals, and intelligent-leaning bandits collaborate to filter out or neutralize stupidity.Filtering Mechanisms:Use the cooperative efforts of intelligent team members and trainable individuals to isolate and contain stupidity.Proceduralize intelligent actions to strengthen the organization’s resilience.Organizational Survival: Ensure a critical mass of intelligent and aligned team members to prevent the organization from shifting toward a “stupid-dominated” culture.

With massive  Gennaro Cuofano, The Business Engineer

This is part of an Enterprise AI series to tackle many of the day-to-day challenges you might face as a professional, executive, founder, or investor in the current AI landscape.

The post Building Teams in The AI Age appeared first on FourWeekMBA.