Opinions expressed by Entrepreneur contributors are their own.
Generative AI is catalyzing a significant paradigm shift in various business sectors, including coding, data science, content creation, virtual assistance, medical support, artistic innovation, media, marketing, game development, financial analysis and digital education, among others. This technology is enhancing business efficiencies broadly and transforming key industries such as healthcare, education and technology, as well as organizational workflows in numerous areas, thereby promising high returns. Consequently, generative AI is reshaping the future of work across a wide array of industries.
MarketsandMarkets predicts substantial growth in the global AI industry, estimating it will reach $1,345.20 billion by 2030, with a compound annual growth rate (CAGR) of 36.8% from 2023 to 2030. In alignment with these financial expectations, the Infosys Knowledge Institute has shown that “firms that use AI well can increase enterprise profit by 38% and will help deliver $14 trillion of gross added value to corporations by 2035.”
Yet, despite these promising financial forecasts, the actual deployment of AI technologies, particularly generative AI, falls short of expectations. Gartner survey results published in Harvard Business Review indicate a potential gap in AI adoption: While 70% of organizations were exploring generative AI as of March and April 2023, only 4% had fully implemented these technologies.
So why do business leaders hesitate to integrate generative AI solutions into their operations?
The reasons experts have identified for the slow adoption of generative AI primarily center on high costs, data complexities and a shortage of skilled professionals, among other factors. Additionally, there is prevalent mistrust among recent startups and technology industries concerning the effectiveness of available solutions and worries about potential pitfalls.
Despite these numerous factors, here are three potential key reasons that stand out for their hesitancy to embrace AI, along with suggested strategies to address these challenges.
Related: You Can Fear It and Still Use It — Why Are So Many American Workers Shy About AI?
3 reasons business leaders hesitate to adopt generative AI
1. Resistance to change and ego
Leadership often hesitates to adopt new technologies, preferring traditional business methods. For example, surgeons at MGH only adopted the Da Vinci surgical robot after losing patients to hospitals using the technology, as they found it hard to leave established practices for new training methods. Similarly, many business leaders stick to conventional workflows, perceiving new changes like AI adoption as disruptive, resource-draining and costly. Their personal discomfort with AI may lead them to reject such innovations, claiming they are “too busy” to explore new technological advancements.
2. Lack of expertise in the field of AI applications
The problem of leadership resistance is further exacerbated by the shortage of specialized training or expertise, coupled with the challenge of retaining skilled professionals in the realm of artificial intelligence (AI) applications. Despite the burgeoning enthusiasm for AI, there remains a critical need for specialized AI experts within business leadership teams. Although sourcing highly skilled individuals in the market is challenging, retaining them poses an additional hurdle, potentially leading businesses to shy away from considering AI solutions.
3. The majority of generative AI solutions are still in the beta phase
While generative AI is transforming industries and businesses globally, most of its applications, including ChatGPT4, are still in the beta phase and continuously improving. The more these systems are used, the more data they gather to refine their responses.
However, they are not infallible; they can still experience “hallucinations” or produce errors, which might be detrimental depending on the context of use. Such inaccuracies or data security and privacy issues with generative AI applications can have serious implications, particularly in business settings, where they can affect clients or customers and potentially harm the business’s reputation. These incidents can lead to distrust among business leaders, resulting in hesitation or outright refusal to adopt AI solutions.
Related: This Is the New ChatGPT Trend That Will Enhance Your Business
How to thoughtfully adopt AI into your business
1. Weigh the benefits and risks for business impact
Businesses that adapt swiftly to change often outperform their competitors, underscoring the importance for leadership to stay abreast of new trends using AI solutions and be ready to embrace them, even when the changes are challenging. A primary consideration is determining whether the AI trend is beneficial for the company’s operations, specifically if it can enhance current processes or workflows efficiently and cost-effectively.
It’s advisable to engage external expert advisors to assess the advantages and risks of new technological trends, as well as their potential impact on the business. This evaluation process might entail multiple discussions with external AI specialists, financial advisors and internal teams to reach an informed decision regarding the consideration to adopt an AI solution.
2. Conduct in-depth technical evaluations of AI solutions before you choose and implement one
Once the decision to adopt an AI solution has been made, the subsequent crucial step is to conduct an exhaustive market search for AI vendor offerings. It is vital to undertake comprehensive evaluations of AI technology solutions before adoption to minimize the risk of potential failures that could negatively impact a business.
Investing in a meticulous and thorough due diligence process, which includes multiple rounds of assessment by different AI technology experts, is imperative. This method is more than a precautionary measure — it’s a strategic investment that could save a business not just thousands, but potentially millions of dollars in the long run by ensuring that the selected AI solutions are well-aligned with the business’s needs and are set up for successful integration.
3. Make time for ongoing specialized AI workshops and updates for leadership teams
It is crucial for business leaders to allocate time to understand the basics of available AI business solutions in the market. A recommended approach is to organize regular lunch-hour workshops tailored toward specific AI solutions for leadership, led by AI industry experts. These workshops are an effective strategy to keep leaders engaged and informed about the latest developments in AI technology. By integrating customized learning/training into their schedules in an efficient and focused manner, leaders can stay abreast of advancements and better position their businesses to leverage AI innovations.
Related: How Cutting Edge AI Tech Could Be Your Answer to Tackling Stress
As we navigate the burgeoning era of generative AI solutions, which is finding its application across various business sectors, it’s crucial for leadership to remain engaged and informed to avoid falling behind competitors. The dawn of this new generative AI era is upon us, escalating rapidly. To effectively leverage its advantages, business leaders need to be well-prepared and proactive, ensuring a deep understanding and strategic integration of these advanced technologies into their planning, doing so both efficiently and effectively to steer their business toward success.