AlphaGo caused a stir by defeating 18-time world champion Lee Sedol in Go, a game thought to be impenetrable by AI for another 10 years. AlphaGo’s success is emblematic of a broader trend: An explosion of data and advances in algorithms have made technology smarter than ever before. Machines can now carry out tasks ranging from recommending movies to diagnosing cancer — independently of, and in many cases better than, humans. In addition to executing well-defined tasks, technology is starting to address broader, more ambiguous problems. It’s not implausible to imagine that one day a “strategist in a box” could autonomously develop and execute a business strategy. We’ve spoken to leaders who express such a vision — and companies such as Amazon and Alibaba are already beginning to make it a reality.

But it’s dangerous and naïve to assume that better technology and more data guarantee better outcomes. Remember Long-Term Capital Management? LTCM was founded, in 1994, by some of the best minds in finance theory, including two Nobel Prize winners. It printed money while its financial models, based on cutting-edge option theory, worked, with annualized returns after fees of over 40% in its second and third years. Nevertheless, overreliance on models was its downfall. LTCM’s model continued to predict that it was properly hedged against a potential Russian default; the insight that it actually needed — that it was under-hedged and exposed to liquidity risk — could only have come from outside of the model. After the Russian financial crisis in 1998, LTCM imploded and lost $4.6 billion.

No matter how advanced technology is, it needs human partners to enhance competitive advantage. It must be embedded in what we call the integrated strategy machine.