The latest way to sell artificial intelligence is with a high-tech version of the promise that corporate America last bought from Six Sigma. Earlier last month, Workday told investors that its customers should pay for its AI agents out of what they spend on labor and services, not just software. Workday itself, its CEO said, was looking to replace new hires with AI.
One of the promises of AI is that it will take processes previously performed by expensive and unreliable humans and do them with cheap machines that can act with perfect uniformity. But corporate America has run this experiment before — and it didn’t go well. The results confirmed what the late William Abernathy of Harvard Business School called the productivity dilemma: The increased efficiency came with decreased innovation.
Process management programs such as Six Sigma work by reducing variance in a company’s routines. Management scholars Mary Benner and Michael Tushman have documented a surprising side effect. Examining more than two decades of patents and quality certifications in the paint and photography industries, they found that the more process management a company did, the more its innovation built on what it already knew instead of creating new approaches and drawing on new ideas.
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