The Cultural Benefits of Artificial Intelligence in the Enterprise

Findings from the 2021 Artificial Intelligence and Business Strategy Global Executive Study and Research Project

by: Sam Ransbotham, François Candelon, David Kiron, Burt LaFountain, and Shervin Khodabandeh


The benefits of artificial intelligence go well beyond improved efficiency and decision-making. AI can also improve organizational effectiveness and strengthen teams and enterprise cultures.

Artificial intelligence can generate cultural as well as financial benefits for organizations. With AI systems in place, teams can perform tasks with more pride and confidence and collaborate more effectively: 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.

When conducting our research, we heard story after story from executives familiar with AI implementations in their organizations. The overarching message was clear and backed up by survey data: Business culture affects AI deployments, and AI deployments affect business culture.

This MIT SMR-BCG report — based on a global survey of 2,197 managers and interviews with 18 executives — identifies a wide range of AI-related cultural benefits at both the team and organizational levels. Among survey respondents with AI implementations that improved efficiency and decision-making, for example, more than 75% also saw improvements in team morale, collaboration, and collective learning. Culture change from using AI transcends the legitimate, but myopic, promise that AI will liberate workers from drudgery.

These cultural changes are more than a side benefit. AI-related cultural and financial benefits build on each other. Survey respondents who saw significant financial benefits from their AI initiatives were 10 times more likely to change how they measure success than those who saw no such benefits. In some cases, AI helped leaders identify 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.

Building a culture that supports innovation with AI has an effect on competitiveness. Our research found that respondents who use AI primarily to explore new ways of creating value are far more likely to improve their ability to compete with AI than those who use AI primarily to improve existing processes. Respondents who said they use AI primarily to explore were 2.7

About the Authors

Sam Ransbotham is a professor in the information systems department at the Carroll School of Management at Boston College, as well as guest editor for MIT Sloan Management Review’s Artificial Intelligence and Business Strategy Big Ideas initiative.

François Candelon is a senior partner and managing director at BCG and the global director of the BCG Henderson Institute. He can be contacted at candelon.francois@bcg.com.

David Kiron is the editorial director of MIT Sloan Management Review and is program lead for its Future of the Workforce and Artificial Intelligence and Business Strategy projects. He can be contacted at dkiron@mit.edu.

Shervin Khodabandeh is a senior partner and managing director at BCG and the coleader of BCG GAMMA (BCG’s AI practice) in North America. He can be contacted at shervin@bcg.com.

Burt LaFountain is a partner and managing director at BCG and a core member of BCG GAMMA. He can be reached at lafountain.burt@bcg.com.

Special Contributors

Michael Chu, Matthieu Gombeaud, Su Min Ha, Allison Ryder, and Barbara Spindel

Contributors

Sylvain Duranton, Todd Fitz, Carolyn Ann Geason-Beissel, Michele Lee DeFilippo, Janet Parkinson, Martin Reeves, Lauren Rosano, Lu Sun, and Rachel Zhai

Acknowledgments

We thank each of the following individuals, who were interviewed for this report:

Amy Adams, senior director of global CRM and martech strategy, McDonald’s

Pierre-Yves Calloc’h, chief digital officer, Pernod Ricard

Chris Couch, senior vice president and CTO, Cooper Standard

David Galinsky, senior director, customer data and analytics strategy, McDonald’s

Anju Gupta, vice president of data science and analytics, Northwestern Mutual

Douglas Hamilton, associate vice president and head of AI research, Nasdaq

Dave Johnson, chief data and artificial intelligence officer, Moderna

Slawek Kierner, senior vice president, enterprise data and analytics, Humana

Colin Lenaghan, global senior vice president, net revenue management, PepsiCo

Paul Pallath, global technology head of data, analytics, and AI, Levi Strauss & Co.

Sidney Madison Prescott, global head of intelligent automation, Spotify

Elizabeth Renieris, founding director, Notre Dame-IBM Technology Ethics Lab

Amit Shah, president, 1-800-Flowers

Sander Stomph, former head of operational excellence, KLM

JoAnn Stonier, chief data officer, Mastercard

Radha Subramanyam, president and chief research and analytics officer, CBS Corp.

Nathalie Wright, group digital and IT director, Nordic region general manager, Rexel

Arti Zeighami, former chief data and analytics officer, H&M Group

To cite this report, please use:

S. Ransbotham, F. Candelon, D. Kiron, B. LaFountain, and S. Khodabandeh, “The Cultural Benefits of Artificial Intelligence in the Enterprise,” MIT Sloan Management Review and Boston Consulting Group, November 2021.

MIT Sloan Management Review

At MIT Sloan Management Review (MIT SMR) we explore how leadership and management are transforming in a disruptive world. We help thoughtful leaders capture the exciting opportunities — and face down the challenges — created as technological, societal, and environmental forces reshape how organizations operate, compete, and create value.

MIT Sloan Management Review Big Ideas

MIT Sloan Management Review’s Big Ideas Initiatives develop innovative, original research on the issues transforming our fast-changing business environment. We conduct global surveys and in-depth interviews with front-line leaders working at a range of companies, from Silicon Valley startups to multinational organizations, to deepen our understanding of changing paradigms and their influence on how people work and lead.

Boston Consulting Group

Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholders — empowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact.

Our diverse, global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change. BCG delivers solutions through leading-edge management consulting, technology and design, and corporate and digital ventures. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, fueled by the goal of helping our clients thrive and enabling them to make the world a better place.

BCG Henderson Institute

The BCG Henderson Institute is Boston Consulting Group’s strategy think tank, dedicated to exploring and developing valuable new insights from business, technology, science, and economics by embracing the powerful technology of ideas. The Institute engages leaders in provocative discussion and experimentation to expand the boundaries of business theory and practice and to translate innovative ideas from within and beyond business. For more ideas and inspiration from the Institute, please visit bcghendersoninstitute.com.

BCG GAMMA

BCG GAMMA is BCG’s global team dedicated to applying artificial intelligence and advanced analytics to critical business problems at leading companies and organizations. The team includes more than 1,500 data scientists and engineers who utilize AI and advanced analytics (e.g., machine learning, deep learning, optimization, simulation, natural language and image analytics, etc.) to build solutions that transform business performance. BCG GAMMA’s approach builds value and competitive advantage at the intersection of data science, technology, people, business processes, and ways of working. For more information, please visit our webpage.

References

1. E.H. Schein, “Organizational Culture,” working paper 2088-88, MIT Sloan School of Management, Cambridge, Massachusetts, December 1988.

2. Our assessment of “significant financial benefits” uses a threshold that varies based on an organization’s size. For details about this measurement, see S. Ransbotham, S. Khodabandeh, D. Kiron, et al., “Expanding AI’s Impact With Organizational Learning,” MIT Sloan Management Review, Oct. 19, 2020, https://sloanreview.mit.edu.

3. M.D. Watkins, “What Is Organizational Culture? And Why Should We Care?” Harvard Business Review, May 15, 2013, https://hbr.org; and Schein, “Organizational Culture.”

4. Ransbotham et al., “Expanding AI’s Impact.”

5. Schein, “Organizational Culture.”

i. Schein, “Organizational Culture.”

ii. J. Martin, “Organizational Culture: Mapping the Terrain” (Thousand Oaks, California: Sage Publications, 2002).

iii. Schein, “Organizational Culture.”

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Comment (1)
HERNAN HERRERA
It would be interesting to know if the mentioned benefits of AI use are not the same than those of, in its time, a CRM, or other technology or operational model like Design Thinking.
After a good implementation/adoption process, it is possible.