Story Highlights

  • Commercial applications of AI are expanding rapidly
  • Business models -- and business cultures -- will have to change
  • Cultures that are well-prepared exhibit 5 characteristics

Every day, Artificial Intelligence (AI) becomes more accessible, scalable and affordable. Disruption isn't a possibility. It's an inevitability. And business leaders should start preparing for it now.

Regardless of how you define AI (e.g., general AI, narrow AI, augmented AI) and whether you believe AI will match or supersede certain human capabilities, there's no doubt that it is changing how you do business. Hardware is getting better and more energy efficient, AI-enabling technologies like machine learning are expanding, user interfaces are getting more and more attention (and investment), and blockchain-based models are offering broader access across business infrastructures.

Across industries, isolated AI applications (e.g., chatbots, smart movie suggestions, image recognition) are giving way to business models built with AI at their core. From the smart fridge that orders milk just before you run out to a fully AI-managed supply and production chain, AI is executing operational decision-making, process design, transactions and customer service -- all without the need of a human.

And those are just today's developments. Tomorrow will bring more commercial applications. And every minute, the various ways that AI will revolutionize how we conduct, manage and think about business increase. Some developers believe that the changes will be more dramatic than any we've seen over the last 50 or 60 years. If they're right, we are at the dawn of a business model disruption wave like we've never seen before.

Should You Be an AI Early Adopter?

While the scale of this AI-infused disruption might be difficult to fully comprehend, it will surely create winners and losers. There's already a profit gap between strategic AI early adopters and non-adopters. According to a 2017 McKinsey survey of senior executives, "Early AI adopters that combine strong digital capability with proactive strategies have higher profit margins and expect the performance gap with other firms to widen in the future."

So how should companies prepare for the AI-powered business era?

There is a common belief that STEM (science, technology, engineering and math) competencies are going to be the main competitive advantage for organizations as well as individuals. While advanced technical expertise will undoubtedly be extremely valuable, a relatively small number of specialized experts is likely to suffice. AI tech development processes are becoming both more efficient and more accessible to non-techies, and this is broadening the market scope beyond technical experts.

Indeed, we've seen this pattern play out for decades. As PC interface designs have improved, more people have used them. By now, billions of people have used PCs productively despite a lack of computer programming skills.

Top technical talent will be important -- but not all-important. The real key to winning or losing will be leadership's ability to adopt new ways of thinking early, their readiness to re-invent themselves and how quickly they do both.

In this sense, the digital revolution of the 1990s and 2000s is a relevant example for business: It wasn't access to the innovative technology that differentiated winners from losers in the marketplace, but rather organizations' ability to rethink their business models and adopt new ways of working in light of the new possibilities and demands.

Why Your Culture Matters

The challenge today is that many large organizations' cultures are almost the exact opposite of what they need for fast and wholehearted adoption of AI-powered business models. Most companies don't have a commonly understood vision, don't encourage people to question decisions, don't handle unpredictability and uncertainty calmly or well, and don't cultivate environments of trust and ethical accountability -- at least, not to the extent they'll need to very soon.

Cultures, unlike technologies, are difficult to change rapidly. So companies need to get serious about their cultures and start the change process today.

A culture that is well-prepared for the rise of AI business models needs to have five characteristics. These characteristics define a workplace environment where people can maximize their unique human abilities such as creativity, imagination and sense of purpose.

At the same time, ready-for-AI workplaces empower people to make the best use of the unprecedented abilities that machine algorithms offer (such as gathering information, analyzing data and discerning patterns) without feeling threatened, restricted or out-of-control.

To successfully transform your organization into one that is empowered and ready for the AI disruption, focus on enhancing these five aspects of your culture:

  1. People can work toward a vision and build teams, create projects and set priorities according to that vision.
  2. People can ask open questions.
  3. People can effectively deal with extreme unpredictability and uncertainty.
  4. Ethics is part of everyone's daily decision-making.
  5. Workplace relations are based on trust and win-win thinking.

Future articles in this series will look at each of these five points in greater depth.

Download Gallup's perspective paper on culture to learn how to build a business that's ready for the future.

Jennifer Robison contributed to this article.

Gallup