MIT SMR Connections
MIT SMR Connections is the custom content creation unit within MIT Sloan Management Review.
If you’re intrigued by artificial intelligence’s potential to transform your business, you’re not alone. And if you’re not sure exactly where to start, or how to gain the most value from the efforts you’ve already got underway, you’re in good company.
While nearly two-thirds of the more than 2,200 executive respondents to our recent survey reported increased spending on AI in the previous year, only 5% indicated that they had implemented AI broadly. Even some AI startups use surprisingly little AI: In 2019, fully 40% of 2,830 European AI-related startups used no AI at all, according to research by MMC Ventures, a U.K.-based venture capital firm.
Experts say those findings may reflect a widespread misconception that AI is today’s best approach to solving just about any problem. The reality is far more complex.
“A lot of people want the AI hammer so they can whack things,” says Michael Wade, professor of innovation and strategy at IMD Business School in Lausanne, Switzerland. “But it’s an expensive hammer, and it takes time, and the right people, to get up to speed. So the first question people have to ask, before they hire people and invest a lot of money, is whether they really need AI — because in many cases, they don’t.”
In this Strategy Guide, the first in a four-part series, Wade and other experts define AI, describe the kinds of problems best suited for addressing with AI, provide real-life examples of AI in action, and offer advice for undertaking successful AI initiatives.