Beyond Mere Efficiency: Artificial Intelligence is Transforming Culture, Study Suggests

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Here’s a chicken-or-egg proposition — are forward-looking companies most likely to make the most judicious use of artificial intelligence, or does deploying AI lead to more forward-looking companies?

It seems to work both ways, a recent survey of 2,197 executives and managers published by MIT Sloan Management Review and Boston Consulting Group, shows. Managers and executives with forward-thinking organizations are in the right frame of mind to make the most of AI — and, in turn, AI is opening new vistas for new ways of thinking to achieve innovation and growth.

The fact that software or algorithms can shift cultural values is a bold statement, one that is often proved wrong. But the MIT-BCG study finds in many cases, AI and culture are reinforcing each other, potentially moving things in a positive direction.

Let’s start with business performance metrics, which can either validate or rupture cultural values. “Many executives revealed that their AI implementations were helping them develop or refine strategic assumptions and improve how they measure performance,” relate the study’s authors, a team led by Sam Ransbotham of Boston College and François Candelon of BCG. In turn, these changes have led to 64% adjusting the key performance indicators (KPIs) that guide their decision-making.

Executives who saw significant financial benefits from their AI initiatives were 10x more likely to change how they measure success than those who saw no such benefits. AI has played a role in “identifying new performance drivers, which led to new assumptions, objectives, measures, and patterns of behavior, along with new areas of accountability. AI also helped these organizations realign behaviors and become more competitive.”

Respondents leveraging AI for its innovation potential were 2.5x more likely to agree that AI is helping their company defend against competitors, and 2.7x more likely to agree that AI is helping their company capture opportunities in adjacent industries, the survey shows.

A majority, 58%, say they have seen improvements in both efficiency and decision quality among their teams since their teams implemented AI.

There’s more to the story well beyond improved efficiency and decision-making. AI can also improve organizational effectiveness and strengthen teams and enterprise cultures — taking technology work to a whole new level. “We found that some executives employ AI to reassess strategic and operational assumptions,” Ransbotham and his co-authors suggest. “Executives are recognizing that they can use AI to discern performance drivers that they themselves cannot identify through intuition and experience alone.”

With well-functioning AI in place, “teams can perform tasks with more pride and confidence and collaborate more effectively,” the co-authors suggest. “They can actually get stronger. These cultural benefits can penetrate the foundation of business operations, improving assumptions that drive organizational behaviors and ensuring the pursuit of smarter goals.” Once AI solutions prove to be effective, they add, “the resulting cultural and productivity benefits encourage even more AI use throughout the enterprise.”

Among survey respondents with AI implementations that improved efficiency and decision-making, more than 75% also saw improvements in team morale, collaboration, and collective learning.

The challenge to proliferating AI on a wider basis is trust — trusting the data going into systems, and the decisions rendered by these systems. This is where greater education and evangelization are required. Close to half the respondents believed that mistrust of AI stemmed from a lack of understanding (49%) or training (46%). More than one-third, 34%, say data of insufficient quality is a pressing issue. In addition, managers cite they are concerned about having too little context behind decisions (34%) or, conversely, too much information (17%).

Ultimately, Ransbotham and his team see positive effects at all levels: “culture change from using AI transcends the legitimate, but myopic, promise that AI will liberate workers from drudgery.” Working with a company that has an open, innovative culture can be the best thing in the world — let’s hope AI can help more organizations achieve this.