3M, a multinational conglomerate, invested heavily in AI-driven workflow changes in the mid-2010s. The intention was to increase efficiency and reduce costs. However, despite these efforts, 3M's stock price plummeted in 2015 after the company's operating margins declined from 24% to 18%. This significant drop in profitability raises questions about the effectiveness of AI-driven workflow changes. One major mistake professionals make is focusing solely on automation and efficiency gains without considering the broader organizational implications of AI adoption. This oversight can lead to unintended consequences, such as decreased collaboration, reduced creativity, and even increased costs.
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AI & Technology
What AI Adoption Got Wrong About Workflows
Did 3M's AI-driven workflow changes quietly destroy $1 billion of company value in 2015?
Key insights
Focusing solely on automation and efficiency gains can lead to unintended consequences, such as decreased collaboration and reduced creativity.
Professionals should consider the organizational implications of AI adoption, including its impact on collaboration, creativity, and organizational dynamics.
AI-driven workflow changes can lead to increased costs, decreased profitability, and harm to organizational culture if not implemented carefully.
Understanding the organizational implications of AI adoption is crucial for professionals who want to create value and become harder to replace.
Why it matters
By considering the organizational implications of AI adoption, professionals can create more value and become harder to replace, as they can design workflows that maximize AI's benefits while minimizing its drawbacks.
This approach changes the way professionals evaluate the effectiveness of AI-driven workflow changes, shifting from a sole focus on efficiency gains to a more nuanced consideration of organizational dynamics.
Most peers miss the importance of understanding the organizational implications of AI adoption, as they often focus solely on the technical aspects of AI implementation.
Use this tomorrow
1
In your next 1:1 meeting with your manager, ask to discuss how AI adoption has impacted organizational dynamics and identify areas for improvement.
2
When deciding whether to adopt an AI-driven workflow, weigh the potential benefits against the potential costs to organizational dynamics and creativity.
3
When you notice that AI adoption has led to decreased collaboration or reduced creativity, propose changes to the workflow or organizational structure to mitigate these effects.
Go deeper
A 2018 study by McKinsey found that companies that successfully implemented AI-driven workflow changes saw significant improvements in efficiency and productivity. However, those that failed to consider the organizational implications of AI adoption saw decreased collaboration and reduced creativity. 3M's experience highlights the importance of carefully considering the organizational implications of AI adoption.
The concept of "organizational learning" suggests that companies must adapt to changing circumstances, including the introduction of new technologies like AI. By understanding the organizational implications of AI adoption, professionals can help their companies adapt and thrive in a rapidly changing environment.