MIT SMR Connections
MIT SMR Connections is an independent content creation unit within MIT Sloan Management Review. We develop high-quality content commissioned and funded by sponsors. We welcome sponsor input during the development process but retain control over the final product. MIT SMR Connections operates independently of the MIT Sloan Management Review editorial group.
Many leaders are excited about AI’s potential to profoundly transform organizations by making them more innovative and productive. But implementing AI will also lead to significant changes in how organizations are managed, according to our recent survey of more than 2,200 business leaders, managers, and key contributors. Those survey respondents, representing organizations across the globe, expect that reaping the benefits of AI will require changes in workplace structures, technology strategies, and technology governance.
The energy for exploring AI is widespread: Nearly two-thirds of survey respondents reported increased spending on AI technologies in the past year. However, for most, it’s still too early to realize benefits at scale. Less than half of respondents reported active adoption, with just 1 in 20 indicating that they have implemented AI broadly, while 18% have implemented AI in a few processes and 19% are running pilot projects.
The responses from those who have implemented AI indicate that these initiatives have implications for general management and technology leaders in three significant ways:
1. AI will drive organizational change and ask more of top leaders. The majority of respondents to our survey expect that implementing AI will require more significant organizational change than other emerging technologies. AI demands more collaboration among people skilled in data management, analytics, IT infrastructure, and systems development, as well as business and operational experts. This means that organizational leaders need to ensure that traditional silos don’t hinder AI efforts, and they must support the training required to build skills across their workforces.
2. AI will place new demands on the CIO and CTO. AI implementation will influence the choices CIOs and CTOs make in setting their broad technology agendas. They will need to prioritize developing foundational technology capabilities, from infrastructure and cybersecurity to data management and development processes — areas in which those with more advanced AI implementations are already taking the lead compared with other respondents. CIOs will also need to manage the significant changes to software development and deployment processes that most respondents expect from AI.
Many CIOs will also be charged with overseeing or supporting formal data governance efforts: CIOs and CTOs are more likely than other executives to be tasked with this, according to our survey. As leading practitioners note, AI requires both quality data and ongoing support to improve the efficacy of its results and to achieve strong ROI.
3. AI will require an increased focus on risk management and ethics. Our survey shows a broad awareness of the risks inherent in using AI, but few practitioners have taken action to create policies and processes to manage risks, including ethical, legal, reputational, and financial risks. Managing ethical risk is a particular area of opportunity. Those with more advanced AI practices are establishing processes and policies for technology governance and risk management, including providing ways to explain how their algorithms deliver results. They point out that understanding how AI systems reach their conclusions is both an emerging best practice and a necessity, to ensure that the human intelligence that feeds and nurtures AI systems keeps pace with the machines’ advancements.
Download the full report to learn more about the changes that leaders must prepare for to successfully implement trusted AI.