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A leader’s quick-start guide to generative AI

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Leading Off

Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities

The sheer speed with which generative AI (gen AI) has entered organizations has taken leaders by surprise. It took years for mainstream AI to reach some degree of maturity; in 2022, adoption had more than doubled since 2017, but the proportion of organizations using AI has plateaued between 50 and 60 percent for the past few years. By contrast, one gen AI tool alone reached one million users in just five days. Given the technology’s breakneck pace of evolution and adoption, companies can’t predict just where it will take them, but its business uses already abound. Whether you want to kick off a long-overdue digital transformation or jump-start an underperforming business unit, you may need to incorporate gen AI as an essential component. We’ve collected a wealth of strategies to help you get started.
An image linking to the web page “The state of AI in 2023: Generative AI’s breakout year” on McKinsey.com.

The title of our latest research report, The state of AI in 2023: Generative AI’s breakout year, says it all. This year’s McKinsey Global Survey confirms the explosive growth of gen AI tools. Many of these tools are less than a year old, yet a third of our survey respondents say that their organizations already use gen AI in at least one business function; high performers deploy it in multiple business functions. But only about a fifth of companies have risk policies in place for gen AI, and these tend to center on intellectual property protection. “The real trap is that companies look at the risk too narrowly,” says McKinsey senior partner Alexander Sukharevsky. “There is a significant range of risks—social, humanitarian, sustainability—that companies need to pay attention to as well.” Businesses need to be “deliberate, structured, and holistic” in considering gen AI’s risks and opportunities, he suggests.

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An image linking to the web page “Forward Thinking on the brave new world of generative AI with Ethan Mollick” on McKinsey.com.

“It’s doing the kinds of stuff that we would not expect software to do,” says Wharton School professor Ethan Mollick about the unanticipated powers of gen AI. “It literally can write code for you. It can literally do reports for you. It can pass the bar exam.” (A gen AI model did that, performing as well or better than humans on the test.) But at its current stage, the technology may not always be reliable or consistent. In a conversation with McKinsey partner Michael Chui, Mollick suggests that an effective response to this is to treat gen AI as one would treat humans—by accepting that humans sometimes make mistakes and behave illogically. “It absolutely makes stuff up. It hallucinates. We don’t know the full principles, but that would be my starting point: thinking about it like a person.”
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Lead with intelligence, human and artificial.

— Edited by Rama Ramaswami, senior editor, New York

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by "McKinsey Leading Off" <publishing@email.mckinsey.com> - 02:55 - 14 Aug 2023