November 14, 2024
(press release)
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New MIT SMR and BCG Research Quantitatively and Qualitatively Links Organizational Learning, AI-Specific Learning, and the Ability to Manage Rapidly Changing Business Environments BOSTON—Addressing uncertainty is a critical challenge for leaders today as geopolitical tensions, shifting consumer preferences, talent disruptions, evolving regulations, and rapid technological advancements increasingly complicate the business landscape. According to a new report by MIT Sloan Management Review (MIT SMR) and Boston Consulting Group (BCG), artificial intelligence, a major source of uncertainty in its own right, is essential for meeting this challenge. The report, Learning to Manage Uncertainty, With AI, presents findings from the eighth annual global research study on artificial intelligence and business strategy by MIT SMR and BCG. It draws from a global survey of 3,467 respondents across 21 industries and 136 countries, along with interviews with nine executives leading AI initiatives in sectors such as financial services, technology, retail, travel, transportation, and health care. “AI adoption jumped 20% last year, driven by interest in generative AI, as 91% of organizations now expect GenAI to be core to the strategy in at least parts of their organization,” said report coauthor Sam Ransbotham, professor at Boston College. “This increased AI use isn’t causing workers to panic about their jobs, with respondents far more hopeful (84%) than fearful (20%). Instead, augmenting organizational learning with AI-based learning enhances the knowledge capture, synthesis, and dissemination that organizations depend on to manage the myriad uncertainties they currently face.” “Our previous research found that organizations with superior learning capabilities are more likely to obtain significant financial benefits from their AI use,” said Shervin Khodabandeh, a BCG managing director, senior partner, and coauthor of the report. “Now we find that the reverse is also true. Using AI can improve organizational learning capabilities, and these learning improvements are tied to not only enhanced financial results but also the ability to manage strategy-related uncertainties.” Most Organizations Lack Strong Learning Capabilities Despite Facing Widespread Uncertainty The report defines organizational learning as “an organization’s capability to change its knowledge through experience.” The research finds that organizations that combine organizational learning with AI-specific learning outperform organizations that do neither or employ either alone. Of the companies surveyed, 59% reported low levels of both organizational and AI-specific learning and only 29% of respondents say their company has strong organizational learning. Organizations Combining AI and Learning See Greater Success According to the report, 15% of organizations integrate AI into their learning capabilities. These organizations — referred to in the report as Augmented Learners — are: Augmented Learners Are Prepared to Manage Many Types of Uncertainty Organizational learning and AI-specific learning (augmented learning) help enterprises manage uncertainty and disruptions from talent mobility, changing technology, and evolving regulatory and legal requirements. The survey results show a clear link between organizational learning and preparedness for talent mobility disruptions. Only 39% of Limited Learners feel ready to manage knowledge loss from departing employees, while this rises to 64% in those with strong learning capabilities. Using AI can further contribute to this readiness: Eighty-three percent of Augmented Learners are prepared to deal with the uncertainty of knowledge disruption from talent mobility—twice as much as Limited Learners. Compared with Limited Learners, Augmented Learners are significantly more likely to be prepared to deal with uncertainty from technology disruptions (86% versus 49%) and regulatory disruptions (79% versus 48%). On the regulatory front, large organizations with global operations can use AI to navigate complex, uncertain regulatory frameworks that vary from one country to the next. Augmented learning organizations have an advantage here because they have abilities that those unable to learn with AI lack. “This research demonstrates that human users can use AI to make sense of the business environment in new ways,” said David Kiron, a report coauthor and editorial director, research, at MIT Sloan Management Review. Both organizations and managers can become better learners with AI. That is arguably at least as important as using AI to create efficiencies.” “Companies can adopt five practical and actionable strategies to enhance their organizational learning through AI,” said Leonid Zhukov, vice president of data science at BCG and a coauthor of the report. “These strategies include fostering growth in both organizational and AI-driven learning, leveraging AI to drive exploration, accelerating learning with AI, selecting initiatives that support continuous learning, and ensuring responsible and ethical AI usage.” The State of AI in Business Since 2017, MIT SMR and BCG have tracked AI implementation in business as part of an ongoing research program. The report details evidence of other trends in AI use in business beyond the relationship between AI use and organizational learning: Download the publication here. Media Contacts: Eric Gregoire: Tess Woods: 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’s Big Ideas Initiatives develop innovative, original research on the issues transforming our fast-changing business environment. MIT SMR conducts global surveys and in-depth interviews with frontline 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 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.
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