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Generative AI: A leader’s guide to capturing value fast

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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

By now, the potential economic payoff of generative AI (gen AI) is almost undisputed: our research shows that the technology could add trillions of dollars in value to the global economy. But despite its beneficial impact on a range of functions and industries, gen AI poses considerable challenges and risks that leaders may need to prepare for even as they pilot the technology. Here’s a roundup of our latest thinking on gen AI and its implications—positive and negative—for organizations.
An image linking to the web page “Implementing generative AI with speed and safety” on McKinsey.com.

The buzz around gen AI has been increasing, but so has concern about its risks—and that can be a problem for leaders who wish to take advantage of its potential for immediate positive impact. In a recent survey, we found that 63 percent of respondents rated gen AI implementation as a high priority, yet 91 percent did not feel ready to manage the process in a responsible manner. We suggest that leaders address four primary sources of “inbound” risk—threats likely to affect organizations regardless of whether they deploy gen AI. For example, it’s important to establish a governance structure that includes expertise, oversight, and training for end users. “Organizations should develop a set of guiding principles agreed on by the executive team and the board that will guide AI adoption and serve as a guardrail for acceptable use cases,” note McKinsey senior partners Ida Kristensen and Lareina Yee and their colleagues.
An image linking to the web page “Don’t wait—create, with generative AI” on McKinsey.com.
An image linking to the web page “Legal innovation and generative AI: Lawyers emerging as ‘pilots,’ content creators, and legal designers” on McKinsey.com.

In his play Henry VI, Shakespeare may have joked about doing away with lawyers, but today, gen AI isn’t here to replace the legal profession but rather could help its members thrive. From automating repetitive tasks to helping create business strategy, the powerful new technology can potentially transform the daily work of lawyers, according to McKinsey associate general counsel Ilona Logvinova. “I see this as a tremendously exciting time in our profession,” she says. “This newly emerging automation stack can free up real time that lawyers use on heavily time-consuming work with lower payoff.” For example, gen AI can search for and compile defined terms, find applicable precedents, and take a first cut at editing forms and documents. “With legal tech as the copilot, we have an opportunity for automation and acceleration in the way we work,” notes Logvinova.

Lead by capturing gen AI’s value.

– Edited by Rama Ramaswami, senior editor, New York

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by "McKinsey Leading Off" <publishing@email.mckinsey.com> - 04:09 - 25 Mar 2024