Implementing AI and Managing Relationships: 5 Ideas from the MIT Sloan Management Review
As artificial intelligence matures and grows within businesses, leaders across industries are struggling to onboard everyone. At the same time, they must manage customer and employee relationships in the context of changing expectations in the era of digital transformation.
The latest insights from MIT Sloan Management Review examine how to overcome barriers to implementing AI and go all out to get AI tools into production. Leaders will also learn how to know what customers want, avoid a toxic workplace, and conduct effective brainstorming sessions.
Overcome 3 common barriers to using AI tools
AI-based decision tools have the potential to increase efficiency, improve service quality, reduce costs and increase revenue. But that only happens if the workers use the tools. Often they don’t.
AI projects are meeting resistance from frontline workers in industries ranging from healthcare to retail, says MIT professor Sloanwritten, with co-authors Mark Sendak and Suresh Balu. This resistance typically stems from three conflicts of interest between AI developers, business executives, and end users. A more holistic approach to implementation can break down these barriers.
Problem 1: AI tools benefit the organization, not the end user. This is common when organizations use predictive analytics to increase downstream value because it forces end users to enter data or make decisions unrelated to their role. To solve this problem, AI developers must focus on the problems that end users face in their own daily work, while managers must offer tangible incentives for using the tools.
Problem 2: The tools require additional labor from the end user. Increased engagement with AI tools, especially those outside of typical worker technology workflows, only makes the job harder. Tools that can automate data retrieval, testing, and validation, and that can provide insight into the applications workers are already using, should minimize the impact on end-user workload.
Problem 3: The tools limit the autonomy of the end user. Prescriptive tools that offer evidence-based decision support — and check whether someone accepts those recommendations — violate the intuitive judgments of end users. AI tools should help end users make decisions while leaving them the “last choice”. Understanding this give-and-take requires end-user involvement early in the development lifecycle.
Read: AI on the front line
Know the 5 characteristics of an ‘AI powerhouse’ company
Nearly two-thirds of companies have yet to see the value of their AI investments, and 45% see AI as a risk to their business in some way. Indeed, these companies tend to be interested in AI and have not yet put their AI tools into production, write Thomas H. Davenport, visiting scholar at the MIT Initiative on the Digital Economy, and Randy Bean , CEO of NewVantage Partners.
Mastercard is not one of those companies. AI support begins with CEO Michael Miebach and has been built through a combination of internal talent acquisition and development. The example of Mastercard, a self-proclaimed “AI powerhouse,” suggests that there are five pillars of a business that is all about AI:
- Power products and services. Mastercard started with fraud detection but plans to apply AI to all components of the payment cycle.
- Fuel internal business operations. Predictive applications support processes ranging from business forecasting (with 99% accuracy) to server maintenance.
- Support customers. Mastercard works with enterprise customers to identify their own AI use cases – and to create a proof of concept in as little as six weeks.
- Pursue AI for good. The company runs AI projects targeting community development, microfinance, and building data science talent in underserved areas.
- Prioritize ethical AI. In its AI development efforts, Mastercard emphasizes ownership, control, and the ability for customers to leverage their own data.
Read: Becoming an ‘AI powerhouse’ means going all out
Rethink those assumptions about what customers want
Assumptions can guide business leaders toward beneficial decisions and align stakeholders around common viewpoints, says MIT lead researcher Sloan explained in a recent webinar. However, assumptions also reinforce unconscious biases and weed out innovations that go against the grain. In an ever-changing world, companies need to rethink these 5 common assumptions about customer expectations.
Customers appreciate human contact. Many customers actually prefer self-service and believe that a human slows down the interaction.
In-person experiences are better than digital. The digital experience enables businesses to reach a global audience while providing greater convenience at lower cost.
People won’t pay full price for digital. People pay for value, and convenience is an important part of that value. By providing convenience, digital can provide significant value.
The pandemic-era service restrictions are only temporary. It turns out that some services reduced during the pandemic, like daily turndowns in hotel rooms, may be overpriced.
The old method was the correct one. Traditional business models not only predate the pandemic; they may predate the smartphone, the Internet, or even the telephone.
As business leaders question these assumptions, here are the questions they need to keep in mind:
- Who is the helping human salesperson? The customer or our inefficient and outdated internal processes?
- How do we optimize in-person and digital interactions for customers, not just ourselves?
- How do preferences vary across customer segments?
- When is digital better – and can we charge more, not less, for it?
- How much do customers have really need the services we have reduced during the pandemic?
Watch: Rethinking customer expectations for 2022 and beyond
Avoid the 5 Attributes of a Toxic Company Culture
Many characteristics of a company can contribute to a bad culture, but there is a difference between the elements of the culture that are irritating or disappointing and those that are truly toxic. In a study of over 1.3 million Glassdoor reviews, MIT lecturer Sloan and his co-authors identified five common attributes of a toxic corporate culture. These are the characteristics that have the greatest negative impact on how employees rate company culture.
- Not included representation of employees by gender, race, sexual identity and orientation, disability and age – coupled with a culture of cronyism and unspoken favoritism in general.
- Disrespectful treatment of employees that results in a lack of consideration, courtesy and dignity towards others.
- Immoral and dishonest behavior – or, worse, failure to comply with applicable state and federal regulations.
- cut throat work environments in which colleagues actively undermine each other.
- offensive management that openly intimidates, condescends or belittles employees.
A toxic corporate culture comes at a high cost. Companies find it harder to attract and retain talent, while employees who stay on the workforce are less productive and more likely to suffer from chronic illness. And no one is immune: even companies with high corporate culture ratings are likely to contain “pockets of cultural toxicity” with business units, job functions or geographies.
Read: Why every leader should be worried about toxic culture
Provide constructive criticism to the creative process
The main rule of thumb for brainstorming sessions – no criticism – dates back to the late 1940s. But recent research suggests that constructive criticism can encourage additional creativity and imagination. The key, says MIT associate professor Sloan is to understand the context of the brainstorming exercise.
In a cooperative context where the goals of group members are aligned, criticism can stimulate creativity. In a more competitive session — a session where participants are encouraged to prioritize ideas, for example, or a session where groups fall squarely into two camps, such as workers and managers — criticism is more likely to trigger a conflict.
Before conducting a brainstorming session, leaders need to understand the dynamics of the teams coming together. If a conflict is likely, organizations can opt for a session that includes free-flowing ideas coupled with critiques, then follow that up with an idea review session. In such a setup, team members are less likely to alter their ideas – and the creative process is less likely to be compromised.
Read: Improve creative brainstorming with constructive criticism