Report: Most global execs say AI drives financial, cultural benefits

A majority of global executives who have implemented artificial intelligence in some form in their business report that the new-age technology has been instrumental in driving financial and cultural benefits at the team and organizational levels, a new study reported on Tuesday.

According to the joint report, published by MIT’s Sloan Management Review and the Boston Consulting Group, more than 55% of the executives who use AI saw financial gains (11% with significant gains and 44% with some gains), while 58% said the implementation of technology improved their team’s overall efficiency and decision quality. Of the latter, more than 75% saw improvements in three key aspects of team culture — morale, collaboration, and collective learning.

Team morale particularly increased with greater AI adoption, as organizations that made AI-related changes in many processes were nearly two times more likely to morale boost than those with no changes.

The findings highlight that AI deployment can have a far-reaching impact beyond its primary goal, enabling teams to get stronger and perform tasks with more pride and effectiveness. They can also collaborate better. These cultural benefits can penetrate the foundation of business operations, improving assumptions that drive organizational behaviors, KPIs, and ensuring the pursuit of smarter goals.

Shervin Khodabandeh, a senior partner and managing director at Boston Consulting Group, said, “Given how effective AI has proved to be at the team and cultural levels, it is imperative that leaders within companies find ways to translate that more broadly to the organizational level. Furthermore, AI can become a managerial tool to align micro behavior with broader goals, including societal purpose, equity, and inclusivity.”

AI adoption drives confidence

In addition to improving cultural elements and enabling happier teams, AI also fosters more confidence within organizations, the study added. A significant 63% of the surveyed executives said AI helps them feel more prepared to defend against competitors and capture opportunities in adjacent industries. The figure increases to 78% in the case of firms achieving significant financial benefits with AI.

Notably, BCG and MIT SMR surveyed a total of 2,197 managers across 106 countries and 28 industries to gather this data. They also conducted in-depth interviews with executives from organizations such as CBS, Northwestern Mutual, Humana, KLM, McDonald’s, H&M, Nasdaq, Moderna, Spotify, Mastercard, PepsiCo, and Levi Strauss.

The organizations also found that 55% of the surveyed group used AI to explore new ways of creating value versus improving existing processes. These companies are nearly three times more likely to feel prepared to capture opportunities in adjacent industries, the study said.

“Successful organizations have moved beyond using AI just to improve their current business and processes,” François Candelon, senior partner and managing director at Boston Consulting Group and global director of its Henderson Institute, said in a statement. “They are now harnessing the power of AI to uncover new business opportunities to create competitive advantage.”

Cultural acceptance is vital

While the above-mentioned figures show that AI plays a significant role in improving team culture as well as gaining financial and competitive benefits, it must be noted that the adoption of the technology cannot happen if the culture of an organization rejects AI in the first place.

Currently, according to the study, nearly half of companies believe that mistrust of AI stems from a lack of understanding (49%) or training (46%) of the employees. Other reasons leading to mistrust include providing too little context behind decisions and building a poor tool, backed by insufficient quality data (31%).

These challenges need to be solved by offering a strong tool that not just meets employee expectations but is also supported with proper guidance and training.

“Cultural acceptance of AI begins with trust. Building that trust depends on teaching and training workers, explaining the reasons for AI recommendations, and providing AI tools that solve problems,” David Kiron, editorial director of MIT’s Sloan Management Review and coauthor of the report, said.

Originally appeared on: TheSpuzz