Harnessing AI: What Businesses Need to Know in ChatGPT’s Second Year

As a new year begins, the role of artificial intelligence (AI) and its impact on the future of work permeates nearly every workplace-related discussion, from diversity, equity, and inclusion goals and venture capital funding to strategic leadership approaches and flexible workforce policies.

How will companies and their employees adjust to the new world of AI? Harvard Business School faculty members take a look at emerging AI trends and offer some advice for businesses on how to make the most of this new technology in 2024.

Ayelet Israeli: Watch for more responsible AI (this was written with the assistance of ChatGPT)

Throughout 2023, we dedicated considerable effort to assessing whether the recent strides in generative AI were mere fads or indicative of a transformative future. This period was marked by extensive experimentation and exploration of generative AI, a technology that, while nascent, showed exponential growth in both capability and wonder.

“A recurring theme that emerged was the prospect that, at least in the near future, successful outcomes would be achievable through human-AI collaborations rather than through human or AI efforts alone. ”

Researchers in various contexts demonstrated that generative AI has the potential to enhance productivity (speed and efficiency of task completion), quality (precision in execution), and creativity (albeit with limitations). Notably, the simulation of synthetic humans through large language models allowed us to replicate established experiments, engage with synthetic customers, and potentially uncover consumer insights for market research.

A recurring theme that emerged was the prospect that, at least in the near future, successful outcomes would be achievable through human-AI collaborations rather than through human or AI efforts alone. Looking ahead to 2024, these endeavors are poised to persist. Even in the absence of groundbreaking technological breakthroughs, engaging discussions are expected to unfold around several key topics:

  • Unlocking the full potential of AI models. Delving into the capabilities and limitations of generative AI solutions, discerning optimal use cases, and establishing boundary conditions will be pivotal.
  • Responsible AI and AI ethics. As integration of AI systems deepens into society, businesses, and education, an amplified focus on ethical considerations becomes imperative. This includes addressing algorithmic biases, safeguarding privacy, ensuring security and copyright protection, as well as promoting transparency, fairness, and interpretability. Deploying mechanisms for responsible AI will be central to these efforts.
  • AI governance and regulation. Policymakers are expected to grapple with the aforementioned ethical issues, necessitating a thorough examination of the potential consequences of the adoption of AI.
  • AI acceptance. Anticipate a shift in human resistance toward acceptance. Users are expected to become more adept at leveraging AI to their advantage, ideally with a sense of responsibility.

Ayelet Israeli is the Marvin Bower Associate Professor of Business Administration at HBS.

Jacqueline Ng Lane: Gain advantage via human-AI collaboration

Generative AI surged in 2023, with companies eagerly exploring ways to enhance productivity and creativity. As we step into 2024, this could be the year a new paradigm for collaborative innovation emerges between human and machine intelligence.

Crowdsourcing—a technique using diverse ideas from the masses—is one such area poised for change, research indicates.

For years, companies went outside their boundaries to crowdsource diverse viewpoints and innovative solutions to their most complex solutions. Take the Netflix challenge. In 2006, Netflix launched an open competition for the best collaborative filtering algorithm to predict user ratings for films that could beat Netflix’s own algorithm by 10 percent. Three years later, Netflix announced the grand prize of $1 million to a team besting it by 10.06 percent.

“Generative AI’s strength is to develop ideas that will resonate with a broad audience and garner wide market appeal.”

Despite the excitement such challenges generate, they are typically resource-intensive and time-consuming. Generative AI, capable of processing vast datasets with ease, promises a new approach. It can amalgamate insights from diverse perspectives more swiftly and economically than human-driven efforts, representing a wealth of untapped potential for companies addressing complex issues. This efficiency in content creation not only accelerates innovation but also opens up new avenues for strategic problem-solving.

So, what role should humans play? Generative AI’s strength is to develop ideas that will resonate with a broad audience and garner wide market appeal. But it is human ingenuity—fueled by unique experiences and bespoke skills—that holds the key to the most creative and unprecedented solutions, our study indicates.

The future lies not in human versus machine intelligence but in the collective intelligence of both forces, collaborating together to produce high-value ideas that blend human ingenuity with AI’s efficiency and analytical power. As we look ahead, it is clear that the competitive edge belongs to those firms that embrace this partnership.

Picture a scenario where AI serves as the ultimate innovation partner, rapidly prototyping ideas from a vast database of industry trends, past crowdsourcing challenges, market research, and consumer behavior. Humans will then apply their critical thinking and creativity to these AI-generated concepts, refining them with the subtleties of market understanding, ethical judgment, and human intuition.

This partnership offers a reimagined competitive edge, where the embrace of human-AI collaboration becomes a strategic imperative for forward-thinking firms.

Jacqueline Ng Lane is an assistant professor in the Technology and Operations Management Unit at HBS.

Tsedal Neeley: Embrace the flexibility of the digital revolution

The future of work is not just about where people sit. It’s about how AI and digital technologies are enabling a more efficient, innovative, and flexible work environment.

As we step into 2024, it’s imperative for organizations and individuals alike to embrace this digital mindset, redefining the very fabric of our working lives. Key aspects of this digital revolution include:

  • Redefining workspaces with flexibility and digital tools. The term “flexible” will likely be trending more and more. We will increasingly move away from the in-person versus remote debate to more flexible and digital work environments. This flexibility is made possible by tools that facilitate seamless collaboration and productivity, regardless of physical location.
  • Pressure on jobs, salaries, and organizational structures. As AI and other digital tools become more prevalent, there will be a growing impact on job roles, salary structures, and how companies are organized and managed. This transformation will bring new opportunities but also challenges in adapting to a rapidly changing work environment.
  • Data and algorithms as the new currency. In this digital-first world, rather than worrying about where people sit, organizations will focus on whether their workforce has the right toolsets and skillsets. Understanding and utilizing tools, data, and algorithms are key skills for this rapidly evolving AI future.

As we pivot from traditional models, the emerging trend isn’t just about remote or hybrid setups; it’s about how AI and generative technologies are reshaping the very essence of work. I continue to have an abiding faith in everyone’s ability to learn and shape our AI-intensive future.

Tsedal Neeley is the Naylor Fitzhugh Professor of Business Administration at HBS.

Andy Wu: Go beyond efficiency to drive differentiation with AI

As we approach 2024, generative AI continues to dominate the conversation among executives at the forefront of adapting their companies to new technologies. The focus of that conversation will soon shift from exploring ways that AI can improve efficiency to using AI as a driver of strategic differentiation.

Here are five shifts 2024 may bring:

  • Broadening access to computing. Generative AI will become further integrated in the software we already use, allowing a broader set of managers and employees to converse in natural language with previously complex and specialized software.
  • Cost transformation. By broadening who can interface with software, generative AI allows businesses to achieve more with fewer resources, potentially transforming their organizational structures.
  • Leveraging the limitations. The real value of generative AI lies in identifying its limitations and turning them into strategic opportunities. This understanding can uncover potential cost savings and competitive advantages, even in areas where AI does not directly enhance products or services.
  • Unique value creation. In an era where AI’s benefits are widely accessible, differentiation becomes crucial. Businesses need to look beyond standard applications and “best practices” and develop unique, tailored AI models and applications to stand out from competitors and create exclusive value.
  • Strategic reimagination. The key to leveraging generative AI lies in reimagining strategy, not just refining existing processes. Companies leading in this space will integrate AI into their core, rethinking their approach to data and organizational design.

Andy Wu is the Arjun and Minoo Melwani Family Associate Professor of Business Administration at HBS.

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Feedback or ideas to share? Email the Working Knowledge team at hbswk@hbs.edu.


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