AI could be enabler of ideation and innovation

Businesses who use AI to drive innovation could see a 38% boost to their growth, according to a new study. The research suggests that collaborating with AI could also notably improve innovation in UK firms.

Formed in 1991 by a merger of David Kelley Design, Moggridge Associates, ID Two and Matrix Product Design, IDEO is a design and consulting firm with offices in the US, UK, and China. The company's more than 500 staff use a design thinking approach to design products, services, environments, brands, and digital experiences.

As has been the trend throughout more than a decade of digital transformation hype – from blockchain to the metaverse – the substantial investments currently being thrown at AI mean many consulting firms have pivoted their offering to pledge support for getting the most from adoption. IDEO is no exception to this, and has even launched a “proprietary brainstorming tool” named Big Questions – defined by the company as “an experiment with GPT-4”. The tool is designed to help clients collaborate with AI to develop useful prompts, thought-starters and questions to tackle important issues such as the climate crisis, diversity, and youth unemployment.

To underline just how impressive AI is, as IDEO leans into it itself, the firm has also published a study about the benefits of adopting the technology into a business. Polling 1,000 business leaders across Britain, the firm found that using AI to accelerate innovation rather than efficiency – which most efforts are currently focused on – can “increase growth by more than a third”.

Not just cost-cutting

At present, 64% of respondents said they see AI as a cost cutting tool – using it to perform repetitive and administrative tasks, enabling them to trim their headcount in back-office functions. However, the study suggests that C-suite leaders who use AI as a cost cutting tool are three times as likely to see a reduction in their efficiency than average, and twice as likely to say it has damaged their relationship with clients.

However, business leaders who used AI for artificially generated questions to help with ideation – as the Big Questions coincidentally provides – produced 56% more ideas, according to the study. This led to a 13% increase in the diversity of ideas and a 27% increase in the level of detail compared to a control group who were not provided with AI prompts. 

Sergio Fregoni, executive director at IDEO, commented, “AI’s greatest potential is in helping leaders to create and launch new-to-the-world ideas. When AI is used as the world’s most diverse and informed collaborator, rather than a magic black box of solutions, we can address more divergent and complex challenges with greater speed, and at a larger scale.”

It is not clear how useful having 56% more ideas actually is on a practical level, because there is still a big gap between ‘an idea’ and ‘a workable idea’. And the number may not actually be that high. Circling back to that “increase growth by more than a third”, IDEO admitted that C-suite leaders who used AI as a tool for innovation saw a 5.4% increase in their growth. That is 38% higher than for companies who use AI for other objectives, whose growth presumably would then have been around 3.9%. A difference of a little over 1.4% in growth might not exactly be seen as transformative. But, in a tightening economic picture, it might also make all the difference for the survival of some firms. 

Scepticism

These fine margins might explain why some executives are still to be won over by the technology, especially considering the amounts they may have to invest to integrate AI into their operations. While 45% of C-suite respondents said AI could “make or break” their organisations, 35% also said that while AI had changed the way they spoke about their services, it had not changed what they actually do. As a result, 26% added that AI was little more than “a passing fad”.

Lorenz Korder, managing director of IDEO London, cautioned against this, however. Instead, he maintained that “the time will come soon” when the technology would be embedded within every business, and “winning in this world” would require leaders to give AI “a seat in the boardroom, not just a role in the back office.”

Korder added, “Leaders need to know how to embrace AI to create new ideas and fresh business models, not just ever more efficient versions of the businesses which came before. In a world which has thrown so many curveballs at business leaders, the disruptive potential of AI is a reason for optimism and growth. We must grasp it.”