Well, as we head towards 2025, the role that AI is playing in our lives feels like it's increasing significantly each and every day. And to that end, understanding how to lead in a landscape like this is going to be very important as well. A new Wharton executive education program will be focusing on that element specifically. It is titled, 'Leading in an AI Powered Future.' It's going to be six weekly sessions focusing on a variety of topics, starting on January 27. Ethan Mollick is co-director of the Generative AI Lab here at Wharton, as well as an Associate Professor of Management. Great to see you again. How are you?
I'm wonderful. Glad to be here.
It is kind of interesting for me, and I'm sure it is for you, to see how everything in the last year and a half, and AI has been around longer than that, but how it has become really the main focus of so many people in so many areas of business, our culture, our lives, whatever.
We have a general purpose technology that is, by definition, a technology that touches everything we do in different ways that aren't predictable in advance. So it's going to affect every field. I mean, AI is a real thing. It's really here to stay. We have enough data coming in that it actually has real impacts on performance and jobs. I mean, I think there's a reason why it's the big topic.
So as we turn the calendar for 2025, what do you think are some of the most significant changes that AI might bring to a business in the near future?
So there are -- there's sort of two sets of things happening. There's a set of technology advancements that are going to change things, and then there's a set of organizational and leadership changes happening. So on the organizational leadership side, I think that lags technology. So the technology has been amazing out of the gate. What's been happening is individuals have gotten access to these tools, and they're getting individual performance improvements. Those aren't being translated to the organizational level. That's because individuals are hiding their use. They're hiding it because they're either afraid that they've been told they'll be fired if they use AI the wrong way, so they're not showing people. They're viewed as geniuses right now, so they don't want to show people that they're not geniuses and the AI is being the genius. They're worried that efficiency gains translate to being fired or being assigned more work or they won't get credit for it. So one of the big organizational challenges: how do we move this from the individual level to think about how organizations can benefit, and that's the big challenge for the next year, organizationally.
So how do you think then leaders of companies, what areas do they focus on in terms of incorporating AI into kind of the organizational structure?
So we don't have easy answers. I mean, one of my biggest fears about AI is that organizations have, by and large, given up what they used to spend a lot of effort doing, which was thinking about organizational redesign, right? You look at how Ford was successful, right? Or even how Salesforce was successful. These companies were successful because they thought about how to redesign organizations, like organizational structure. Now, most organizations don't do a lot of R&D in their own organizational structure. They count on outside consultants like McKinsey coming and helping them, or they count on, you know, building, buying software products that kind of impose their organizational structure on them. You learn from, you know, Workday teaches you how to use HR in the Workday kind of way. And as a result, they're not innovating. Because nobody has answers right now. We have to figure this out. So I think it has to start with leaders embracing using AI personally, getting their 10 hours of AI use in, to find out what it's good or bad for them. And then really starting to think at a fundamental level, how are we doing R&D in our organization around this?
And so then that has the opportunity to impact the, quote unquote, culture in and around the organization, in terms of people really buying in and understanding how valuable AI can be in various aspects of their work.
So I think people are already learning that. I think the question is, how do we capture that, right? What does the organization that has AI in it look like? It can't look the same, right? With the organizational structure we have today, it is the exact same one we had in 1855 when the New York Railroad invented the org chart, right? And it was designed to solve a bunch of problems that the New York Railroad had, which was, how do we coordinate work across a vast distance in real time? We invented a whole bunch of new techniques in the 1910s around these, around assembly lines, in the early 2000s, around agile development, but all of them were limited by people. It all depended on people being the unit of intelligence and the unit of action that things happened in. That's not what's going to happen in the future.
So then, how do you see AI impacting different business models as we move forward?
So I think that's where the technology starts to come in, right? So one of the big things that we're going to look for in 2025 is the rise of agents, which are already a thing. So agents are AI systems that are goal directed and have agency to pursue those goals on their own. And that means they can use a computer mouse, they can do work for you. That starts to look a lot more like a human doing work than it does a chat bot that you ask a question to.
Yeah, it has to be a challenge though for a lot of companies, when you realize that your competition is probably, you're going to be using these types of technology as well, and you have to implement them and get them working up to optimum so that you can remain competitive in whatever field it is.
