Wharton@Work

January 2024 | 

From Algorithms to Action: Embracing Generative AI

From Algorithms to Action: Why Business Leaders Must Embrace Generative AI

“In my almost 20 years in academia, I have never seen anything like this,” says Wharton marketing professor Stefano Puntoni. “We've had moments of big excitement around certain technologies, including crypto and the metaverse — some of which is enduring, and some is more of a fad — but this is different. AI has been on the minds of some leaders for over a decade, but the acceleration of generative AI [genAI] over the past 24 months is something else. GenAI doesn't have to get any better. It's already good enough to transform your business.”

Puntoni, who co-directs AI at Wharton, one of the school’s newest research initiatives, says those who don’t figure out what AI means for their company and their industry will quickly be left behind. “GenAI is not a ‘technology around the corner.’ It is already here. There is no doubt that it is going to have an impact on every business and every business function.”

Professor Kartik Hosanagar, who also co-directs AI at Wharton, adds, “You cannot be a business executive today and not expect AI to transform your role. AI has to be leveraged. It’s not unlike the dawn of the internet. Many companies made the mistake of creating a dot com division and selecting a few people to work on it while the rest of the organization did business as usual. Many of those companies never caught up.”

In terms of productivity alone, early studies of genAI show figures of 20, 30, and even 50 percent increases depending on the task and the context. “That means no company can afford not to adopt AI,” says Puntoni. “It's not just about whether you think you see an opportunity: you have to do it to stay in business. Those who jump in too late will pay a serious price.”

Taking the First Step

Puntoni and Hosangar have joined forces to develop and lead Generative AI and Business Transformation, a new Executive Education program that will help business leaders understand the implications and uses of this ground-breaking technology. Hosanagar explains, “This is the number one topic right now in boardrooms and executive meetings, for good reason. AI is a once- or twice-in-a-generation technology, like the internet, electricity, and the steam engine. Those who smartly embrace it, lead business transformation, and stay with it will see great results. But there is a window of opportunity that is open only so briefly for companies to take the lead.”

The new four-day program, held at Wharton’s San Francisco campus March 4–7, will dissect the technology, platforms, and large language models of genAI and help participants identify opportunities for strategic and practical applications for their businesses. Puntoni explains, “The program is going to accelerate understanding, especially for senior leaders who right now may be struggling to keep up with the breathtaking developments.”

Hosanagar says overcoming the lack of understanding and fear of genAI as a source of threat is critical, because they are holding many companies back. “For those worried that the technology could sink their ship, I have to say that they’re right — it could. But it could also help them get ahead and firmly establish their position in the market.”

He recently had a conversation with a music-industry executive who called genAI “the NFT of 2023.” “That’s not right,” says Hosanagar. “It is a general-purpose technology that will transform multiple industries, determining who wins and who loses. It will change the way companies innovate and impact the economic growth of countries. You are in trouble if you think this is something you don’t have to figure out now.”

With sessions on how to integrate AI into products and services, current applications, and AI governance, Puntoni says the program is designed “to help managers feel more empowered than afraid. We want them to be in control, believing that they can navigate this, that they understand what the technology is capable of doing right now and what the obvious use cases are. The patterns of adoption in different industries can help them start making predictions about what might happen in their industry or function. For those who are just putting their toe in the water and worry they don't know what to do, we will guide them through this process.”