Artificial intelligence (AI) is a single term that encompasses a wide range of technologies. While businesses have had access to some AI solutions for years, including advanced business analytics tools based on machine learning (ML), new advancements have kept AI in the public eye.
This latest wave of development, focused on generative AI (GenAI), has brought new priorities and imperatives for company leaders. Executives who are able to grasp this technology's transformative potential, as well as steer clear of hype-driven or unrealistic options, are well-prepared to compete within their industries.
Learning more about AI and integrating this knowledge into a company's business strategy are more complicated actions than they may appear. This is because of frequent breakthroughs in the development of more advanced GenAI models, along with the rising availability of such tech tools. When the state of the art is always changing, how can leaders keep up?
High-level executive courses developed and maintained by thought leaders actively engaged in the technology world can fill in the gaps for today's business professionals in ways that go beyond other, less-sophisticated methods. This immersion in the latest thinking on AI tools can represent a competitive advantage.
How are companies harnessing AI today?
AI in general and GenAI specifically are currently in the midst of a transitional phase. These technologies are rapidly gaining in power as the resources to use them at scale become widely available, but there's still a need to find sensible business cases for their output.
MIT Sloan visiting senior lecturer in information technology Paul McDonagh-Smith explains that while there are a large number of pilot projects underway, fewer companies have effectively turned their AI programs into real value drivers. The organizations that create a competitive advantage from this wave of AI development will be the ones that manage to find ways to tie their AI initiatives into their business objectives.
McDonagh-Smith describes the ideal use case of AI as "humans multiplied by machines, augmenting and assisting our capabilities across the existing and emergent tasks performed in our organizations."
Because GenAI algorithms are capable of powerful calculations based on large esoteric data sets, they can take on and automate tasks that previous generations of technology couldn't manage. The human element of corporate AI use comes from figuring out which tasks are most suitable for this digital approach.
Ironically, the hype around AI is one of the factors that could derail companies in their pursuit of transformation. Leaders who become too enamored with the idea of AI or the promises of tech providers, rather than focusing on their own business objectives and operational needs, could end up with programs that don't provide effective solutions for their problems.
Businesses that run disciplined pilot programs can map out AI's capabilities onto their existing practices. By finding ways to relieve pain points, such as excessive manual effort or time spent on everyday matters, or by choosing new areas of inquiry that can benefit from algorithmically generated insights, business leaders can make AI work for them.
See how one executive is learning to think about the potential of AI.
How is AI transforming corporate best practices and business models?
Leaders who grasp the true value of AI, rather than being dazzled by the hype, will be able to positively impact both the customer experience and employee conditions. In some cases, this will take the form of tune-ups to current business models. In others, value will come from deploying truly new capabilities, ones that would not have been available in the past.
As part of a recent MIT Sloan Executive Education webinar, tenured professor of economics Eric So pointed to a few different outcomes that can result from advanced AI usage:
- Personalizing products and services for customers, while also lowering costs. AI's ability to process large amounts of data can help companies serve their audiences effectively, while its cost-reducing efficiencies can create financial advantages for businesses to pass on to their consumers.
- Boosting productivity for employees, not just increasing output but changing the nature of work performed by team members. By automating manual tasks that impose a large cognitive load, workers can free themselves to dedicate time to more impactful and enjoyable high-level tasks.
Some businesses are able to scale their current business models to new levels because of AI. Others may be plotting wholesale changes to the way they offer their products, now that they have access to powerful algorithms. Each type of transformation is meaningful because it represents an enhanced capacity to achieve a company's long-held goals, empowered by the new generation of technology.
There is also a third group of companies, beyond those using AI in an additive way and those using it transformatively. Some businesses simply don't have a 100% compelling use case for AI today. Professor So stressed the importance of companies asking whether the technology works with the company's business context. An investment in technology that doesn't have a business case is wasted money.
Professor So gave advice for organizations hoping to achieve transformation on the back of AI technology. He urged these companies not to view spending on AI as a 1:1 replacement for employee salaries. The contributions of an AI system can't be measured in terms of how many workers could do the same job. Rather, AI expenditure now is an investment in growing the technology and building a framework for future improvements.
See how AI is already changing one company's approach to products and services.
Experts point the way to AI's potential
The rapid emergence of AI has a lesson for business leaders: The technological forces empowering companies evolve very quickly. Trying to stay competitive within a vertical means adapting to one transformation after another. Using last year's AI lessons is not helpful for business strategy development when the leading organizations in a given industry have already updated their approaches.
Evolution in AI has taken a few forms:
- Technology is becoming more widely available, with powerful GenAI models offered on relatively affordable subscription models. This democratization of AI availability can be seen in the rise of consumer-grade technology, with ChatGPT capturing the public's imagination and becoming a media phenomenon.
- Models are evolving, fueled by an influx of new capital. A development arms race between AI teams at tech giants like Google and Microsoft, along with pace-setting new entrants like OpenAI, has led to rapid iteration. Venture capital firms are competing to back the next great AI breakthrough, which has consequences for the whole industry.
- Early adopters are discovering what AI can and can't accomplish in the context of their business models. Between legacy companies adjusting to a new generation of algorithms and startups basing their business models on AI's possibilities, there have been numerous examples of AI in action for new businesses to iterate upon.
There are also lessons for companies informed by the legal picture around AI, as well as the need for responsible AI practices. Technology has thus far evolved more quickly than the laws or regulations that could restrict companies' efforts. This has led to legal worries such as the question of GenAI algorithms ingesting copyrighted works without permission, alongside concerns about AI's ability to create realistic fake audio or video content.
Keeping up with this ever-evolving picture requires business leaders to consult with industry insiders who are putting constant thought and study into the state of the AI field. The rate at which businesses are discovering viable new uses for the systems necessitates this level of focus.
Watch the recent MIT Sloan Executive Education webinar to catch up on our experts' latest thinking.
Channels like MIT Sloan Executive Education are useful to business leaders here, as the faculty members responsible for courses, seminars and degree programs are plugged into the worlds of business and technology. These dedicated professionals can leverage their studies and their real-world insights to let course participants know how AI is actually interacting with companies' business models and capabilities.
Learn why MIT Sloan Executive Education is your ideal source for cutting-edge business knowledge.
Refresh your AI knowledge through executive education
Executives are best able to guide their companies' paths when they understand the forces affecting their industries. Today, across fields and around the world, that means AI. To bolster your own potential as a business leader, you can immerse yourself in the latest thinking on AI and other advanced systems through executive education.
Leaders can take our AI for Executives Academy course, a joint program in conjunction with the MIT Schwartzman College of Computing, which exemplifies AI learning for business leaders. Participants learn how to deal with the challenges of AI while harnessing the technology's potential to create real value for their companies.
Work in the course includes hands-on problem-solving workshops, which enable executives to learn by doing, seeing in real time how they can transform company outcomes through the application of AI. Industry spotlight sessions show AI's role across fields and functions, while panel discussions allow thought leaders to share their views.
Faculty members responsible for the Academy include visiting senior lecturer Paul McDonagh-Smith and tenured professor of economics Eric So, whose thoughts on AI have informed this piece. They are joined by professor of electrical engineering and computer science Antonio Torralba and professor of aeronautics and astronautics Sertac Karaman, giving a multidisciplinary range of expert opinions on AI's status and potential.
The AI for Executives Academy awards participants an Executive Certificate in Digital Business, as well as credit toward an Advanced Certificate for Executives. Amid a wave of AI development, it can be a cornerstone of your technology learning as you further your leadership career.
To see how these experts can introduce you to the world of executive AI use and make you an AI leader, view all the details about the AI for Executives Academy course.