Wharton professor Ethan Mollick, a leading voice in the AI revolution and author of Co-Intelligence, delivered a compelling message at the MIT AI conference on Saturday: companies won’t realize meaningful gains from artificial intelligence until they fundamentally restructure their organizations. “Until we change the organization, we won’t get much benefit,” Mollick emphasized, highlighting a critical gap between AI adoption and organizational transformation.
Mollick’s research reveals a paradigm shift in how technology integrates into the workplace. Unlike previous technological innovations that were designed to be controlled by human workers with intelligence and judgment, AI represents “intelligence of a different source” that can be deployed in fundamentally different ways. This distinction requires companies to rethink their entire approach to AI implementation.
To support his argument, Mollick referenced a groundbreaking study he co-authored examining 758 BCG consultants. The research divided participants into three groups: those with no AI access, those with access to GPT-4-powered ChatGPT, and those with ChatGPT plus instructional materials on prompt engineering. The findings revealed what Mollick calls a “jagged technological frontier” — a phenomenon where AI excels at certain tasks while struggling with others of seemingly similar difficulty.
The results were striking: consultants using AI for tasks “inside the frontier” demonstrated significantly higher productivity. However, those who applied AI to tasks “outside the frontier” were 19 percentage points less likely to produce correct solutions compared to colleagues working without AI assistance. This disparity underscores the critical importance of understanding AI’s capabilities and limitations.
Mollick’s central concern is that AI integration is currently happening at the individual level, with organizations failing to systematically learn from these experiences. He advocates for institutional-level changes rather than leaving AI adoption to individual experimentation. In his own Wharton classes, Mollick requires students to use ChatGPT for assignments, acknowledging both the benefits and challenges. “There’s a lot of positives about it. That doesn’t minimize the fact that cheating and negativity are there, but those have been there for a long time,” he told NPR, suggesting that concerns about AI misuse shouldn’t overshadow its transformative potential.
Key Quotes
Until we change the organization, we won’t get much benefit
Ethan Mollick, Wharton professor and author of Co-Intelligence, delivered this stark warning at the MIT AI conference, emphasizing that organizational restructuring is a prerequisite for realizing AI’s potential benefits.
It’s intelligence of a different source, but it’s now intelligence deployable a different way
Mollick explains how AI fundamentally differs from previous workplace technologies, requiring companies to rethink how they integrate and deploy intelligent systems rather than treating them as tools controlled by human judgment.
AI integration is all happening at the individual level and organizations are basically not learning any of this for a variety of really interesting reasons
Mollick identifies a critical gap in corporate AI strategy, noting that while individual workers experiment with AI, companies fail to systematically capture and institutionalize these learnings at the organizational level.
There’s a lot of positives about it. That doesn’t minimize the fact that cheating and negativity are there, but those have been there for a long time
Speaking to NPR about requiring ChatGPT use in his Wharton classes, Mollick acknowledges concerns about AI misuse while maintaining that these challenges shouldn’t prevent embracing AI’s transformative educational potential.
Our Take
Mollick’s “jagged frontier” framework is perhaps the most important conceptual tool for understanding AI deployment in 2024. The BCG study’s finding that AI can simultaneously boost productivity by significant margins while decreasing accuracy by 19 percentage points for different task types reveals why so many companies report disappointing AI results despite the technology’s obvious capabilities. The real insight here is that individual-level AI adoption without organizational learning creates chaos rather than value. Companies need systematic approaches to identify which tasks fall inside versus outside AI’s frontier, then redesign workflows accordingly. This isn’t about AI limitations — it’s about organizational readiness. The winners in the AI economy won’t be those with the best models, but those who successfully transform their structures to leverage AI’s unique intelligence deployment patterns.
Why This Matters
This analysis from one of academia’s most influential AI voices represents a critical inflection point for corporate AI strategy. As companies rush to adopt AI technologies, Mollick’s research reveals that technology alone won’t deliver competitive advantages — organizational transformation is essential. The “jagged frontier” concept provides a framework for understanding why some AI implementations succeed spectacularly while others fail dramatically, even within the same organization.
For businesses investing billions in AI infrastructure, this research suggests that without corresponding changes to workflows, decision-making processes, and organizational structures, those investments may yield disappointing returns. The 19-percentage-point performance decrease for misapplied AI use cases demonstrates real financial risk. This matters particularly as we enter 2024-2025, when AI adoption moves from experimental to mission-critical. Companies that successfully integrate AI at the organizational level — rather than just the individual level — will likely gain significant competitive advantages, while those treating AI as merely another software tool risk falling behind or even performing worse than before adoption.
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Source: https://www.businessinsider.com/ethan-mollick-corporate-strategy-ai-implementation-2024-10