This week, why companies that capture lasting value from AI think differently. Plus, the rise of zero-commission platforms and the FT’s Gillian Tett on how anthropology can help solve big problems. |
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Bringing your AI game. More and more organizations are aligning AI with core areas of their business—embracing important cultural and organizational shifts, and investing in new kinds of technology, training, and processes. Those that adopt these basic practices tend to report the highest bottom-line impact. |
That’s all good. But successful organizations don’t just behave differently when it comes to AI. They also think differently. At these companies, AI is etched in the collective mindset (“We are AI enabled”), rather than simply applied opportunistically (“Here’s a use case where AI can add value”). And AI is also front and center in the strategy process, helping to reveal hidden pockets of growth, calibrating the likelihood of success before allocating resources, and identifying early-stage trends to jump on. |
A broad mindset shift may sound easy, but it’s not. Leaders who succeed emphasize and encourage global learning loops (through the development of an AI-driven nerve center for managing operations, for example) as well as technological adaptability throughout the organization. This was the approach at a global pharmaceutical company whose multiyear AI transformation achieved a 10–15 percent reduction in patient-enrollment times for clinical studies and a 10 percent gain in productivity across its initiatives, allowing it to redirect hundreds of millions of dollars toward other pressing needs. |
Begin with something important. If an enterprise-wide AI transformation is too daunting, begin by reimagining a core process, journey, or function. In starting smaller, companies can take full advantage of AI while reducing development time and costs. In our colleagues’ recent article “Getting AI to scale,” published in Harvard Business Review, they discuss in-depth how leaders can apply this approach and provide illustrative real-world examples. |
Ethics check. Just as AI deployment will be core to organizations’ future success, leading organizations will be those that actively identify and manage the associated risks. These include potential ethical pitfalls, such as gender or racial biases, that have started to attract regulators’ attention. In our latest AI survey, respondents at organizations getting the most value from AI were also more likely than others to recognize and mitigate the risks posed by the technology. |
The democratization of AI. Finally, what if AI could help with the recovery after widespread global unemployment due to the COVID-19 pandemic? Kevin Scott, the chief technology officer and vice president of AI and research at Microsoft, sat down with James Manyika of the McKinsey Global Institute to discuss how far we’ve come from the Sinclair and TRS-80 computers of their youth, how AI can help create jobs in rural areas of the US, and how it may be the key to democratizing technology to work better for all of us. |
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OFF THE CHARTS |
Equity trading’s race to zero fees |
Retail investing has become a story of “Reddit bros” pushing up meme stocks on new zero-cost trading platforms. But beyond the headlines, adviser-based retail investing has also jumped, up 19 percent in 2020. However, those zero-commission platforms are making their presence felt; for transactional accounts, the average amount charged per trade (as a percentage of list price) dropped from 53 percent in 2019 to 48 percent in 2020. |
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PODCAST |
The shape of work to come |
What will work look like beyond the COVID-19 crisis? Given what we’ve all been through, what does it take to have an amazing employee value proposition to attract talent? In this episode of McKinsey Talks Talent, partners Bill Schaninger, Bryan Hancock, and Susan Lund discuss the trajectory of jobs, skills, and other workforce trends in the recovery. |
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THREE QUESTIONS FOR |
Gillian Tett |
McKinsey recently spoke with Gillian Tett, the Financial Times markets and finance columnist and US managing editor, about her new book Anthro-Vision: A New Way to See in Business and Life. Tett explores how anthropologists get inside the minds of people to help them understand other cultures and appraise their own environment.
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Why can’t medicine alone stop pandemics? |
The core message of the book is that social science and anthropology need to be combined with medical science, computer science, and economic science to create an effective new way of building back better after the COVID-19 crisis. |
The geniuses who collaborated on the vaccines did an incredible service to humanity. But what we learned is that medicine alone doesn’t work unless you also understand the social and cultural context and the incentives shaping people. Because you can have all the vaccines in the world, but if you can’t persuade a population to take them, then you can’t beat a pandemic. |
Or, to take a more positive example, one way to explain why masks are so effective is because the physical fabric stops germs. Another equally important explanation is because the act of putting on a mask is a powerful psychological prompt that reminds people to change their behavior. And that is incredibly important in a pandemic. |
Do we still need offices? |
There’s a lot of debate right now about whether people actually need to be physically in an office to get their job done. As you look at that question, it’s worth thinking about one sector where there has been a complete paradox for the past 20 years: finance. |
Technically speaking, around the turn of the century, financiers could have done a lot of their work at home. If you have a Bloomberg machine and a high-speed internet connection, you can trade. You can do a lot of what you need to do simply sitting in your office. Yet, as an anthropologist named Daniel Burns has pointed out, at the very moment that all of these digital tools were coming on stream in the early 21st century, banks on Wall Street and in the City of London started building bigger and bigger trading floors to get more and more people into the office. |
So if you ask why that was, it becomes clear that what people are doing in offices is not just looking at a computer screen and trading in disembodied markets. They’re also engaged in something that anthropologists call “incidental information exchange.” That’s the process by which teams or groups or departments bump into other teams, other sources of information, and really widen their vision and their gaze and their net on information, which enables them to do their jobs better. |
Should CEOs think like anthropologists? |
My advice about how CEOs can embrace anthro-vision falls into three key buckets. First, musings from anthropology help you to understand your customers much better and, above all else, do something that is in some ways the simplest thing in the world to do but the hardest thing in the world to actually implement, which is to recognize that other people don’t think like you. |
The second point is you need to flip the lens and look back inside your own organization and see all the things that are hidden in plain sight. There’s this wonderful Chinese proverb that a fish can’t see water. It’s very hard for us to see ourselves unless we step out of ourselves and look back afresh. |
The third area where anthropology is helpful is in recognizing that these bounded, tunnel-vision tools that we’ve used to navigate the world in recent decades, such as an economic model or a big data set or a corporate balance sheet, are wonderful, but they are also limited. |
It’s becoming very clear that for a company, the corporate balance sheet isn’t the be-all and end-all. Because things that people used to consider as footnotes to the corporate accounts, like diversity issues, actually impact the company. There has to be a realization about how you as a company sit within a broader ecosystem and why you have to widen that lens. |
— Edited by Barbara Tierney |
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BACKTALK |
Have feedback or other ideas? We’d love to hear from you. |
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