For AI adoption, ‘culture eats strategy for breakfast’

by Janice Allen
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For many companies, artificial intelligence (AI) is poised to move beyond the hype and deliver actual business value. According to the Research led by NewVantage Partners 2022, nine out of ten Fortune 1000 companies are investing in AI. Yet only 26% of respondents have been able to deploy it on a large scale.

The majority identified culture — organizational alignment, business processes, change management, communication, “people” skills, and resistance or lack of understanding to enable change — as the biggest barrier to widespread adoption of AI.

The symbiotic relationship between culture and technology

Most business leaders recognize that culture is important, but they often struggle to define what it is, let alone how it can be changed to survive in an ever-changing digital environment.

The term may be ill-defined, but culture is what makes your company what it is. Think of culture as a set of values, expectations, and practices that guide and inform the actions of all team members.

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“Culture eats strategy for breakfast,” said Peter Drucker. Drucker’s comment encapsulates the truth that change is never easy – and becomes downright impossible when your culture is rejecting or ill-suited to drive innovation and change.

“If your organization is not ready to embrace the change, no AI project will succeed,” said Abhishek Rungta, founder and CEO of digital transformation solutions provider Indus Net Technologies. “Why do certain companies have exponential growth while some are even struggling to maintain theirs? One of the main reasons is the people and the culture they are in.”

A Global McKinsey Survey 2020 showed that only organizations with the right balance of talent, technology, strategy and a culture that encourages experimentation and innovation can achieve positive results through digital transformation.

Preliminary ‘shifts’ to rewire your business for AI

The first step to looking at culture from a technology perspective – including when it comes to AI adoption – is to stop seeing HR professionals as the sole custodians of company culture, prescribing initiatives and perks to cheer up employees . According to Siobhan McHaleculture change expert and author of The Insider’s Guide to Culture Change: Creating a Workplace that Performs, Grows and Adapts“Culture change is more likely to succeed if line managers and HR both take on the right roles during the transformation process.”

Second, it’s important to understand that AI is complex and not plug-and-play. “In every organization, AI needs to be aligned with business goals, data, people and processes,” said Sudhi Ranjan, product manager and chief technical officer of AI-powered e-commerce accelerator Assiduus Global.

Companies need to thoroughly assess their needs and priorities, then transform their business processes and apply the right tools and technologies to enable the change. However, Ranjan said this can be challenging when the organizational set-up to facilitate AI adoption is not well understood. The core objective of AI is to be customer and people oriented. Thus, cultural transformation requires a shift in focus to using AI to support innovation and democratize its use across the organization.

The biggest barrier to the adoption of not just AI, but any technology for that matter, is the people. “Both employees and executives can slow down adoption,” said Manish Narayanaswami, associate director at workflow management company Kissflow Inc. “This may be due to fear of being laid off, lack of understanding of the benefits and what it would be like for them in their position, and lack of rapid access to the technology and its training. There is also concern about change and how to apply it of new technologies.”

So organizations should focus on sensitizing all stakeholders, including senior executives, with the right information and training. Manish said this, in turn, will create the right mindset, expectation and culture to adopt the technology together, not in silos. For example, a company can determine which team is culturally best suited to experiment with, adopt, and scale AI pilots. This group can then lead and evangelize to accelerate adoption by other teams.

AI adoption from a cultural perspective

Enterprises implementing AI should start small and take it one step at a time, rather than forcing company-wide adoption. Where possible, they should start with parallel execution (implementation of an AI solution together with an existing method) or a champion/challenger approach on a selected sub-process; and measure profit in terms of accepted metrics such as efficiency, accuracy, profitability and scalability.

“Any strategy around AI will need to be iterative and flexible given the rapid pace of AI technology empowerment and the fact that large-scale adoption of AI is still in its infancy for many organizations,” said Ajay Agarwal, senior vice president. president and head of CoE – AI/Analytics, Happiest Minds Technologies, told VentureBeat.

Next, AI-related implementations need to go beyond an “IT effort.” While IT teams will understand how the rollout can benefit the business, they may not understand the stakeholder pain points surrounding the new technology. That is why it is crucial to develop a culture where IT, business and all stakeholders can work together to solve the company’s challenges.

Tejamoy Ghosh, head of data science and AI at AI-based fintech firm Aye Finance, advises companies to follow a phased and graded implementation strategy when deploying AI to avoid major negative disruptions. Once a positive impact is demonstrated, both leaders and users are more likely to adopt AI and actively participate in its expansion.

It is important to understand that AI adoption cannot happen in days, weeks or months; it is a long-term commitment and requires periodic investments to keep up to date. “A cultural shift that embraces openness to learning new technology and upskilling the use of AI in improving operational efficiency becomes necessary to advance the needle toward wider organizational adoption of AI,” said Kushal Prakash, co-founder of founder of the AI-based fintech company PoddL.

Developing a culture ready for AI

Requirements for AI initiatives vary depending on the use case and organization. In some cases, it may make more sense to use external services, while others may need to be done internally. But whatever the situation, it’s critical to be honest about your willingness. Julian Sewelbusiness development representative at applied AI services and solutions provider Faktion, highlights six key points elements to consider when building your AI culture:

  1. Value data and analytics: Companies should focus on building a centralized data technology infrastructure and team. This team must be able to develop a data strategy and ensure that the right data is collected in the right way. They should also pay close attention to the analysis of the data to ensure positive results.
  1. Decision: Companies must show real leadership through vision, action and budget. They should foster a sense of ownership in key leaders before embarking on AI initiatives.
  1. AI Strategy Framework: First and foremost, business leaders need to understand why they are using AI. They must understand the size of the opportunity, the level of investment and the strategic rationale. Companies need to figure out how they will apply AI: will the tools be off-the-shelf or bespoke? Will they be built in-house or purchased from vetted suppliers? What are the legal requirements? Also crucial is a timeline to facilitate integration while risks are evaluated.
  1. Choose the right use cases: Companies must first determine whether a problem is solvable and suitable for AI. They need to understand how to measure success and whether there is a clear ROI.
  1. Educate stakeholders: Stakeholders need to understand the overall impact, limitations and opportunities of AI implementation. The team should consist of AI experts who have both theoretical and hands-on field experience.
  1. Learn, improve and repeat: Businesses need to identify the key elements of thinking and acting that can produce the desired outcome, and how to transfer them into the future.

There is a high probability that an AI effort will fail if the company ignores culture change. If every person in the company isn’t comfortable using the technology, no wand will reap a positive result. So it is essential to create a culture that welcomes the adoption of AI before implementing an AI-based solution.

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