The State of Organizations 2023 - Flipbook - Page 14
CHAPTER 1: TEN DEEP DIVES
Making way for
applied AI
Applied AI is becoming increasingly accessible,
and that’s increasing demand for this technology to
be used to build better organizations.
W
hat’s changing?
AI is the reason that people
can open their home screens
just by glancing at their
smartphones. It’s why they
can type on tiny keyboards, knowing that, for better
or worse, the autocorrect feature will kick in. And
AI is already here in an increasingly wide range of
businesses, helping improve customer experience
and company operations. Successful AI deployment
poses many of the same challenges that digitization
of the workplace has, from the use of automation
to the impact of people analytics—that’s to say, it
requires organizational changes to create a culture
that enables the responsible use of AI, as well to
cultivate AI-savvy leadership and talent.
Indeed, AI powers a formidable arsenal of
analytic capabilities to build better organizations.
Organizational leaders can now assess team
dynamics with newly available data and
technologies. For example, they can record guided
team interactions, capturing them in several video
formats. Advanced vision and natural-languageprocessing technologies applied to the videos then
identify and map group-level attributes, helping
leaders assess the overall quality of team dynamics.
Between 50 and 60 percent of respondents in
a 2022 McKinsey Global Survey on AI said they
had adopted AI in at least one of their business
units, and nearly two-thirds expected that their
companies’ investments in AI would increase over
the next few years. Technology companies aren’t
the only early adopters. Some consumer-packaged-
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goods companies are using AI-enabled software
to match job candidates’ behavioral attributes to
open positions, helping those organizations shift
to a skills-based approach to hiring. And some
organizations are experimenting with generative AI
tools, such as ChatGPT, to simplify communication
and documentation tasks.
The benefits of getting it right
The application of AI for building better organizations
holds promise, particularly when companies manage
AI with practical, ethical, and risk-related concerns
in mind. For example, McKinsey research shows that
the companies that have seen the biggest bottomline returns from applied AI—those that attribute at
least 20 percent of EBIT to their use of AI—are more
likely to have set up their organization for success by
aligning AI and business strategies. Moreover, the
share of respondents in that survey reporting at least
5 percent of EBIT attributable to AI increased year
over year to 27 percent, up from 22 percent in the
previous survey.
Applied AI (machine learning, in particular) can help
organizations perform with speed and precision,
thereby improving resilience. Individual and team
decision making can be pushed to the edges of the
organization, removing obstacles to action. And as
markets change and priorities and strategies shift,
applied AI can help organizations position themselves
as the disrupters rather than the disrupted.
Issues to address
AI deployment brings a number of challenges,
many of which build on the issues that companies
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