At Novartis, artificial intelligence benefits both the company and its people. The Swiss-American corporation is using A.I. to study all the data from the many thousands of experiments that it has conducted over the years. Based on those insights, its algorithms are identifying 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 with every combination, but tests only the most promising leads that the A.I. recommends. It’s shrinking the time Novartis takes to launch new drugs and reducing its R&D costs.
The benefits of using A.I. haven’t come at the expense of Novartis’s people; its scientists haven’t become subservient to the technology. Au contraire, thanks to the technology, the scientists no longer have to comb through myriad documents to find data, and can focus on more value-adding tasks. Moreover, building on the A.I.’s data-based recommendations, the scientists are deepening their understanding of molecular properties and stimulating their creativity, which is enabling them to develop novel molecular combinations faster.
The technology may well be called augmenting, rather than artificial, intelligence. A popular perception is that businesses generate value with A.I. at the expense of employees, but that’s mostly a myth. Our studies show that the technology benefits both companies and employees. Only 7% of employees believe that they get little or no value from using A.I. but that their companies achieve value from it, according to the recently-unveiled 2022 BCG – MIT SMR A.I. Report. In fact, as many as 64% of employees admit that they personally benefit from using A.I. in their jobs. And despite the widely held suspicion that A.I. makes employees feel inferior, a mere 8% complained that job satisfaction had fallen after using the technology.
Importantly, organizations are more likely to generate value from A.I. when they focus on how their employees too can gain value from A.I. Companies whose employees gain value by using A.I. are almost six times as likely to generate significant financial returns from the technology than organizations that don’t. That begs two questions: How exactly do employees derive value from A.I.? And how can organizations ensure that it happens systematically?
How employees personally benefit from A.I.
Academic theory suggests that at work, people have three basic psychological needs: Competence, autonomy, and relationships. Once fulfilled, these needs lead to greater motivation and employee wellbeing. Employees derive value from A.I. when the technology helps fulfill those three needs, according to the BCG-MIT SMR A.I. Report.
Greater competence. A.I. helps employees become more competent by deepening their knowledge of the work they do, and by providing granular recommendations so they make better decisions. It can also help people become more creative and explore new ideas, as at Novartis. The report’s findings reinforce that relationship: Employees who use A.I.-based recommendations to improve their performance are nearly 1.8 times as likely to derive value from it as those who don’t.
At the American insurance group Nationwide, for instance, claim adjusters have become more knowledgeable about fraudulent claims by using A.I. The technology helps them analyze thousands of client data points, which has allowed them to better understand fraud markers and how they’re interconnected. By helping them gain better insights into the working of insurance scams, the A.I. is helping the adjusters identify fraud more confidently and stay ahead of the game.
More autonomy. A.I. bolsters employees’ autonomy by providing data-based guidance and reducing the need for managerial oversight. It can help employees learn from past actions, project future outcomes, and recommend novel decisions. Two-thirds of our respondents reported that they use A.I. to recommend new actions they could take.
A.I. is helping Walgreens’ pharmacists do their work with less oversight, for instance. By using tools that forecast when orders will be ready and using chatbots to inform customers, the pharmacists have been able to reduce customer wait times. Long wait times, a major source of customer complaints, used to result in the pharmacists constantly being quizzed by senior management. Those calls have now largely stopped; and by lowering the need for managerial intervention, Walgreens’ A.I. has made the pharmacists feel more empowered.
Better relationships. A.I. can strengthen the relationships between managers, coworkers, and customers because it improves the way people collaborate and share knowledge. As many as 56% of respondents believe that using A.I. has led to improving their interactions with other team members.
A.I. can also assist in building deeper customer relationships. Trying on lipsticks in retail outlets can be time-consuming, but Estee Lauder‘s customers can now test an entire palette of colors virtually by using its A.I.-powered tool. Not only has it boosted customer engagement with the company’s store assistants, but it has repositioned them as beauty advisors. The store assistants can analyze more options before making recommendations, which has deepened customer trust in them.
Organizations must catalyze A.I. use and value for employees
Companies have four tools to trigger employees’ use of A.I. and ensure that the latter generate value from using the technology.
Raise awareness. Many employees use technological solutions that contain A.I.-based components without realizing it. That can be a problem; our data show that employees who know they’re using A.I. are 1.6 times as likely to perceive value from it compared to those who don’t realize the fact. Organizations would do well to ensure that employees know they’re using the technology in their day-to-day work.
To increase employees’ awareness, signaling A.I.’s use is critical. Managers who lead by using the technology are 3.4 times as likely to boost employees’ A.I. usage than those who don’t. Perception too is critical, especially in the early stages. Treating A.I. as an opportunity at the pilot stage correlates strongly with employees’ deriving value by using the technology.
Boost understanding. Companies can nurture A.I.’s use over time by ensuring that employees understand the technology’s full potential, and the kinds of value they can extract from it. People who understand how to work with A.I., and can explain how it operates, are 1.7 times as likely to derive individual value from A.I. as those who don‘t.
That’s why Levi Strauss & Co, for example, holds bootcamps at which frontline workers learn how to use A.I.According to the company, employees who participate emerge not only with a better understanding of what A.I. can do, but also with a fresh sense of what they themselves are capable of. Over time, many become ardent advocates of A.I.
Build Trust. Employees who don’t trust A.I. will obviously be reluctant to use the technology. In fact, those who trust A.I. are twice as likely to use it regularly as those who don’t, according to the survey. Organizations can foster trust in A.I. in different ways. The ability to understand A.I.’s recommendations often builds people’s trust; employees who can interpret the technology’s findings are almost three times as likely to trust it as those who cannot.
Another trust-building lever is investing in a performance guarantee for A.I. Some companies have started buying 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 trust in the A.I. to the company and its workers.
Require A.I.’s use (but let employees decide). As with all new technologies, companies will face resistance with A.I. adoption at first, especially in terms of decision-making. Mandating the technology’s use, particularly in the early stages of adoption, was widely cited as a way of overcoming opposition in our survey and interviews.
Although it may seem draconian, insisting that employees use the technology triples the likelihood that they will do so regularly. Moreover, employees are 1.4 times as likely to get value from A.I. when organizations require them to use A.I. as when the latter don’t, suggesting that mandatory use still leads to individual value. However, managers should ensure that employees always have the freedom to make decisions; agency is critical for autonomy.
Organizations are much more likely to generate value from A.I. when their employees are able to fulfill their psychological needs of competence, autonomy, and relationships, as the 2022 BCG – MIT SMR A.I. study shows. Contrary to conventional wisdom, A.I. actually forges a symbiotic relationship between an organization and its people.
Read other Fortune columns by François Candelon.
François Candelon is a managing director and senior partner in BCG, and the global director of the BCG Henderson Institute. You may contact him at Candelon.Francois@bcg.com.
Shervin Khodabandeh is a managing director and senior partner at BCG and the co-leader of GAMMA (part of BCG X) in North America.
Remi Lanne is a project leader at BCG and an ambassador at the BCG Henderson Institute.
Some companies featured in this column are past or current clients of BCG.
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