More than 75% of managers reported that their AI implementations improved their team culture, said BCG recently when releasing results of a joint study by the company and MIT Sloan Management Review (MIT SMR).
Those who reported improvements in team’s decision making and efficiency also saw improvements in collective learning (87%), team morale (79%), and collaboration (78%), the study indicates.
The organisations surveyed 2,197 managers across 106 countries and 28 industries and did 18 in-depth executive interviews for the study, said BCG, adding that Interviews on AI implementations were conducted with experts from Pernod Ricard, CBS, Northwestern Mutual, Rexel, Humana, KLM, McDonald’s, H&M, Nasdaq, Moderna, Spotify, PepsiCo, Levi Strauss, Cooper Standard, the Notre Dame-IBM Technology Ethics Lab, 1-800-Flowers, and Mastercard.
- AI-related cultural and financial benefits build on each other. Using AI helps companies reassess what it means to be effective. This leads to new business objectives, which leads to new ways to measure performance, new behaviours, and improved outcomes.
- Survey respondents who see significant financial benefits with their AI initiatives are ten times more likely to change how they measure success as a result of using AI than those who saw no such benefits.
- 64% of companies that use AI extensively or in some parts of their processes change how they measure performance and adjust their key performance indicators (KPIs).
- When AI enables workers to outperform existing KPIs, new success measures are necessary. 66% of respondents who agree that their KPIs have changed because of AI also see improvements in team-level collaboration.
“Most companies still have a long way to go to generate substantial financial benefits with AI,” said Sam Ransbotham, a professor in the information system department of the Carroll School of Management at Boston College, an MIT SMR guest editor, and a report coauthor.
Those who do obtain significant financial benefits often have learned how to culturally benefit from AI and how to use AI to glean financial rewards, he noted, adding that the study suggests that these are connected rather than separate activities.
How innovating with AI improves competitiveness
Of companies using AI to explore new ways to create value — versus improve existing processes — 59% agree that using AI helps them defend against competitors and capture opportunities from adjacent industries, BCG pointed out.
These companies are also 2.7 times more likely to agree that their AI implementations help their company capture opportunities in adjacent industries, the firm added.
“Successful organisations have moved beyond using AI just to improve their current business and processes,” said François Candelon, senior partner and managing director at BCG and global director of the BCG Henderson Institute. “They are now harnessing the power of AI to uncover new business opportunities to create competitive advantage.”
Mistrust of AI can undermine adoption
Both the financial and non-financial benefits with AI depend on employees working with and trusting the technology, BCG said.
Nearly half of companies believe that mistrust of AI stems from a lack of understanding (49%) or training (46%).
Providing too little context (34%) or too much information (17%) on AI decisions can erode trust.
No amount of user education can overcome a poor tool. Insufficient quality data (31%), failure to meet expectations (20%), or incorrect solutions (14%) contribute to mistrust of AI.
“AI adoption won’t happen if your culture rejects AI tools. Cultural acceptance of AI begins with trust,” said David Kiron, editorial director at MIT SMR and a report coauthor. “Building that trust depends on teaching and training workers, explaining the reasons for AI recommendations, and providing AI tools that solve problems.”
AI benefits: team level vs organisational level
However, AI that is effective at the team level doesn’t always yield financial success at the organisational level, BCG observed.
At the team level, 58% of global executives agree that their teams have improved in both efficiency and decision quality since implementing AI solutions, the study reveals.
But at the organisational level, only 11% have seen significant financial benefits from their AI initiatives, the firm pointed out, adding that it may be that few companies are implementing AI at a scale sufficient to generate substantial financial benefits.