The AI-enabled organization of the future explores the likely impact of AI on future organizations in several areas:
- The central foundation of successful AI adoption—namely, data— in boosting insight and prediction, and the ramifications for how companies work with each other;
- Potential of AI to level the playing field in terms of company size;
- Impact of AI on workforce dynamics; and
- Regulatory challenges and potential solutions posed by AI.
Data will truly be a resource
"AI will fundamentally affect how companies work with each other, notably in procuring services and goods, refocusing their value chains and how they share knowledge," the report suggests. "AI will empower procurement to speed up the sourcing of professional services for legal, marketing, IT, consulting, HR and other key functions of the company, tapping into resources and providers that were outside of their network in the past."
The report further says that "in order to benefit from better insight and prediction, the kind and quality of data available, and the creativity with which it is used, will be sources of competitive advantage. Successful companies will therefore need to create and execute strategies that harness their own internal data, both for the company's use and to barter with other sources where needed."
The report further says that "in order to benefit from better insight and prediction, the kind and quality of data available, and the creativity with which it is used, will be sources of competitive advantage. Successful companies will therefore need to create and execute strategies that harness their own internal data, both for the company's use and to barter with other sources where needed."
Company size and AI
I have observed over the past few years how AI enables small businesses to better compete with their larger competitors. The report importantly notes: "To date, bigger companies have proportionally shown more commitment to AI in terms of investment at scale and creation of formal AI strategies. Looking ahead, however, smaller firms are taking the plunge. Already, a survey by Emergent Research found two-thirds of US small businesses are using some form of automation. Meanwhile, 54% see AI as an opportunity; only 5% perceive it as a threat."
Moreover, "The real question is not who will use AI—eventually everyone will—but whether in the long term it will drive corporate integration or be a technological leveller." And with respect to the cost of AI infrastructure, "The rapid spread of cloud-based AI off-the-shelf offerings and development services are making this aspect of the technology affordable.
"Nonetheless, the key for small companies will be to design operations to obtain sufficient data, both internal and external, to use in ways that provide competitive advantage."
Successful leaders will use data creatively
Labor economists say the global economy has the potential to produce greater economic output and, therefore, greater wealth, if companies were more productive. In its final chapter, the report explains: "Clearly, if firms are to truly exploit AI, then they will need to implement it effectively across their workforces. In this regard, arguably the lowest hanging fruit in terms of boosting company productivity is the suite of AI tools being rolled out to take on the more repetitive and administrative tasks of employees—a potentially enormous time saver (according to an Accenture survey published in the Harvard Business Review, managers spend over half their day on administrative chores)."
The report adds:
Empowered by the loosening of the administrative burden, the workplace can then transition to becoming a place of constant learning. Curiosity and experimentation will be key to workplace success—employees will need to constantly consider how to use AI tools creatively. This will inevitably require teams comprising varying areas of expertise and collaboration. ... Notably, managers will need to focus on connecting their people with those in other parts of the organization to form teams that improve results in the manager's areas of responsibility as well as elsewhere. In the wake of this improved transparency—the democratization of knowledge, as [Ching-Fong Ong, senior partner and managing director of Boston Consulting Group (BCG) Malaysia] refers to it—the reliance on managers' 'gut instinct' will wane, with potentially positive ramifications for overall workforce cohesiveness.
Whether it is in the companies I have co-founded in recent years or clients my colleagues and I advise, I appreciate the role AI serves in helping managers make informed decisions. Therefore, I welcome the report's conclusion that:
Artificial intelligence will transform companies into the businesses of tomorrow. It seems clear that AI, if properly used, could prove a powerful tool to both boost business performance and strengthen partnerships. Admittedly, corporates are in the early stages of this transition, and the final contours of the future company remain unclear, but four areas are set to be central in AI's organizational reshaping:
- Data strategy will be a core part of corporate strategy and companies will organize to maximize their ability to harness information.
- AI may not end up favoring one size of firm, but it will reshape small companies in particular as they seek the best way to benefit from the technology. Small firms will rely increasingly on outsourcing and partnerships to achieve non-core activities.
- The leaders of tomorrow will need to win the hearts and minds of a workforce that has access to almost as much data and analysis as senior management.
How is AI transforming your business?
- A host of new legal and regulatory questions will make the ethics of AI deployment a key boardroom issue. Companies have a limited time in which to address these challenges and the other AI-induced changes that are yet to fully emerge.
Aaron Rose is an advisor to talented entrepreneurs and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.