At Novartis, artificial intelligence benefits both the company and its people. The Swiss-American company uses AI to study all the data from the thousands of experiments it has conducted over the years. Based on this information, its algorithms identify molecules that could be combined to create new drugs. The organization doesn’t have to go through the tedious process of experimenting with every molecule and every combination, but only tests the most promising leads recommended by the AI. This reduces the time Novartis takes to launch new drugs and lowers its R&D costs.
The benefits of using AI have not come at the expense of Novartis people; its scientists have not become infatuated with technology. On the contrary, thanks to technology, scientists no longer have to sift through a myriad of documents to find data and can focus on tasks with higher added value. Moreover, by relying on AI data-driven recommendations, scientists deepen their understanding of molecular properties and stimulate their creativity, allowing them to develop new molecular combinations faster.
The technology could well be called augmented intelligence rather than artificial intelligence. A popular perception is that companies generate value with AI at the expense of employees, but this is mostly a myth. Our studies show that technology benefits both businesses and employees. Only 7% of employees believe they get little or no value from using AI, but their business gets value from it, according to the recently released 2022 BCG – MIT SMR AI report. In fact, up to 64% of employees admit that they personally benefit from using AI in their work. And despite widespread suspicions that AI makes employees feel inferior, only 8% complained that job satisfaction dropped after using the technology.
Importantly, organizations are more likely to drive value from AI when they focus on how their employees can derive value from AI as well. ‘t. This raises two questions: how exactly are employees getting value from AI? And how can organizations ensure this happens consistently?
How employees personally benefit from AI
Academic theory suggests that at work, people have three basic psychological needs: competence, autonomy and relationships. When met, these needs lead to greater employee motivation and well-being. Employees derive value from AI when the technology helps meet these three needs, according to the BCG-MIT SMR AI report.
Greater skill. AI helps employees become more competent by deepening their knowledge of the work they do and providing granular recommendations so they can make better decisions. It can also help people become more creative and explore new ideas, like at Novartis. The report’s findings reinforce this relationship: employees who use AI-based recommendations to improve their performance are nearly 1.8 times more likely to derive value from them than those who do not.
At US insurance group Nationwide, for example, adjusters have gained greater insight into fraudulent claims using AI. The technology helps them analyze thousands of customer data points, giving them a better understanding of fraud markers and how they interconnect. By helping them better understand how insurance scams work, AI helps adjusters identify fraud with more confidence and stay ahead of the curve.
More autonomy. AI empowers employees by providing data-driven guidance and reducing the need for managerial oversight. This can help employees learn from past actions, predict future outcomes, and recommend new decisions. Two-thirds of our respondents said they use AI to recommend new actions to take.
AI helps pharmacists at Walgreens do their jobs with less oversight, for example. By using tools that predict when orders will be ready and using chatbots to notify customers, pharmacists have been able to reduce customer wait times. Long waiting times, a major source of customer complaints, led to constant questioning of pharmacists by general management. These calls have now largely ceased; and by reducing the need for managerial intervention, AI at Walgreens has empowered pharmacists to feel more empowered.
Better relationships. AI can strengthen relationships between managers, colleagues, and customers because it improves the way people collaborate and share knowledge. No less than 56% of respondents believe that the use of AI has improved their interactions with other team members.
AI can also help deepen customer relationships. Trying on lipsticks at retail outlets can be time-consuming, but Estee Lauder customers can now virtually test an entire color palette using its AI-powered tool. Not only has this boosted customer engagement with the company’s in-store assistants, it has repositioned them as beauty advisors. Salespeople can analyze more options before making recommendations, which has boosted customer confidence.
Organizations must catalyze the use and value of AI for employees
Organizations have four tools to trigger employees’ use of AI and ensure employees are driving value using the technology.
To raise awareness. Many employees use technology solutions containing AI-based components without realizing it. It can be a problem; our data shows that employees who know they are using AI are 1.6 times more likely to see its value than those who don’t. Organizations would do well to ensure that employees know they are using technology in their daily work.
To increase employee awareness, reporting the use of AI is essential. Managers who lead using technology are 3.4 times more likely to drive employee use of AI than those who don’t. Perception is also key, especially in the early stages. Treating AI as a pilot-stage opportunity correlates strongly with the value employees derive from using the technology.
Improve understanding. Companies can foster the use of AI over time by ensuring that employees understand the full potential of the technology and the kinds of value they can derive from it. People who understand how to work with AI and can explain how it works are 1.7 times more likely to derive individual value from AI than those who don’t.
That is why Levi Strauss & Co, for example, hosts bootcamps where frontline workers learn how to use AIAccording to the company, participating employees not only emerge with a better understanding of what AI can do, but also with a new idea of what they themselves are capable of. Over time, many become strong advocates of AI
Build trust. Employees who don’t trust AI will obviously be reluctant to use the technology. In fact, those who trust AI are twice as likely to use it regularly as those who don’t, according to the survey. Organizations can foster trust in AI in different ways. The ability to understand AI recommendations often builds people’s confidence; employees who can interpret the results of the technology are almost three times more likely to trust it than those who cannot.
Another trust lever is to invest in a performance guarantee for AI. Some companies have started taking out insurance policies from companies such as Munich Re to cover their use of the technology. The insurer rigorously audits companies’ algorithms, so buying insurance signals confidence in AI for the company and its employees.
Require the use of AI (but let employees decide). As with all new technologies, companies will initially face resistance to adopting AI, especially in terms of decision-making. Mandating the use of technology, especially in the early stages of adoption, was widely cited as a way to overcome opposition in our survey and interviews.
Although it may seem drastic, insisting that employees use technology triples the likelihood that they will do so on a regular basis. Additionally, employees are 1.4 times more likely to get value from AI when organizations require them to use AI than when organizations don’t, suggesting that mandated use always leads to an individual value. However, managers must ensure that employees always have the freedom to make decisions; agency is essential for autonomy.
Organizations are much more likely to generate value from AI when their employees are able to meet their psychological needs for competence, autonomy and relationships, as shown in the 2022 BCG – MIT SMR AI study . Contrary to conventional wisdom, AI actually forges a symbiotic relationship between an organization and its employees.
read other Fortune columns by François Candelon.
François Candelon is Managing Director and Senior Associate of BCG, and Global Director of the BCG Henderson Institute. You can contact him at Candelon.Francois@bcg.com.
Shervin Khodabandeh is the Managing Director and Senior Partner of BCG and Co-Leader of GAMMA (part of BCG X) in North America.
Remi Lanne is Project Manager at BCG and Ambassador at the BCG Henderson Institute.
Some companies featured in this column are past or current clients of BCG.