Deriving Organizational Value in the Age of AI

Humanity has always been in the quest for the helper — a machine capable of performing tasks with the same competence as humans. In Greek Mythology, the divine blacksmith Hephaestus forged robots capable of performing human-like tasks, such as the bronze giant Talos, who patrolled the shores of Crete and protected it from the invasion. But in reality, designing a machine and rendering it capable of useful activity  — even with the advent of modern computing has proved devilishly difficult. A major challenge, it turns out, is how — and what — to teach it.

A decade ago, there were numerous attempts to create practically useful AIs that explicitly encode human expertise via collections of rules or facts into computer systems. But much of the world is not organized discretely, reducible to simple rules or symbolic representations. While in the field that does use precise characterization–chess, algebraic manipulation, and business process automation — AI has made great advances.

The Hidden Use of AI

Generally,  individual workers tend to underreport their use of AI. Most people use it every day without knowing they’re using it.” With no prompts, The leading survey reveals that 66% of individuals report that they do not use AI or use AI only minimally in their jobs. However, when prompted with specific examples of AI business applications, 43% of these respondents acknowledge that they regularly or sometimes use business products with AI. In the general survey pool, 79% report using consumer products with AI components regularly or sometimes. We find that individuals frequently use AI without knowing they are doing so.

AI is often a small but critical embedded component of a larger system. As a result, individuals under-report AI use and, therefore, the value they derive from the technology. Organizations need to understand all of these uses — both hidden and known — to understand how using AI contributes to individual and organizational value.

Key AI Use Cases and Scenarios

General Consumer Products With AI Components

Products such as voice assistants, writing apps, calendar schedulers, or office productivity applications increasingly embed AI components. For example, assistants like Siri, Alexa, and Cortana use voice recognition and voice generation; Grammarly includes natural language processing.

General Business Products With AI Components

Some commercially available solutions use AI components to deliver important functionality in business. These cover a wide range of business applications, including off-the-shelf imaging tools that support radiologists and customer relationship management software, such as Salesforce’s Einstein and Microsoft Dynamics 365.

Customized AI-Powered Solutions That Support a Specific Organizational Function

Some organizations use customized AI-based solutions to solve specific internal challenges in specific departments or functions. For example, logistics company DHL has a tool that helps optimize plane loads, and automaker Porsche embeds sound processing technology to detect manufacturing issues.

Customized AI-Powered Solutions That Support Many Organizational Functions

Some organizations use tailored AI-based solutions that support many functions. For example, Dutch airline KLM developed a tool to help manage the potential effects of flight cancellations on multiple functional areas, and Amazon applies custom AI tools to pricing and demand forecasting.

Ways To Derive Value

Individuals Derive Value Through Greater Competence

Individuals need to feel competent in the performance of their jobs. They will not find value in technologies that make them feel ineffective, inefficient, or useless. Using AI can help employees gain competence in their jobs — or, more precisely, feel more competent — in several ways. For example, individuals can use the input from AI to make better decisions that exploit business opportunities.

Individuals Derive Value Through Increased Autonomy

Workers must be able to make informed decisions with individual discretion, but it can take time to learn to do a job without guidance. Despite a narrative that automation might make employees feel redundant or subservient to the machine, our research indicates that working with AI often affords individuals more autonomy rather than less. AI tools can help enhance individual autonomy in several ways: by helping individuals learn from past actions, by projecting the outcomes of current actions, by providing salient information about relevant past situations, and by offering feedback on the consequences of past actions that suggest ways to improve performance. They can also recommend new actions or help individuals understand the implications of specific actions

Aligning Individual Value With Organizational Value

Individuals can get value from AI without the company benefiting, just as companies can get value from AI without individuals benefiting. Ideally, and in many cases, both the individual and the organization derive value from AI.

Based on my research, there are three ways that managers can advance individual use of, and value from, AI: by building trust, understanding, agency, and awareness.

Managers Can Promote Trust

Obviously, individuals who do not trust AI will be reluctant to use it. Managers need to nurture trust to encourage AI use. To do so, they need to ensure that workers can easily interpret AI-based outcomes and recommendations. Internal survey results show that if users can interpret AI outcomes, they are 2.8 times as likely to trust the technology compared with users who cannot interpret them. Demonstrating value also builds trust. Individuals who get value from AI are 1.6 times as likely to trust the technology compared with individuals who do not get value.

Managers Can Encourage a Greater Understanding of How To Use AI

The likelihood that an organization obtains significant financial benefits from AI triples when AI becomes a core element of business strategy across all or nearly all business units. Managers may find that the cycle of understanding is already in progress. They can take advantage of the fact that individuals already use AI in consumer applications to introduce new AI tools as an extension of a familiar category. Rather than presenting a custom AI solution as a new type of tool that requires a “cold start,” some managers transform the adoption challenge into a “warm start” by comparing new tools with familiar AI applications.

Managers Can Promote Awareness

Employees might not know much about how AI technologies work. A commonly touted way to address this concern is to increase transparency. But transparency isn’t just about how AI makes predictions; it’s also about knowing when individuals are using AI, who else is using AI, and how AI use relates to the overall organizational strategy. Organizations need to expand their definition of transparency to help individuals get value from the technology. 

Conclusion

Organizations have a long history of implementing disparate systems that create business value yet are unpleasant for the individuals compelled to use them. AI has the potential to be yet another technology in that rogues’ gallery, especially with so much speculation that these AI systems could end up replacing workers.

Instead, this research suggests that individual use and individual value are crucial for organizational success with AI. The use of AI can improve an individual’s self-determination through greater competency, increased autonomy, and stronger relationships rather than feeling threatened by AI.