Knowledge that Transforms

Can generative AI serve as an on-demand business adviser? A field experiment with hundreds of small business owners in Kenya found that AI access boosted revenues and profits by 15% for high performers — but caused a nearly 10% decline for those who had already been struggling. The culprit: Weaker performers followed generic or misleading AI advice because they lacked the judgment to filter it out. Leaders deploying AI at scale must design their rollouts carefully to avoid widening performance gaps.

In negotiations, first offers act as powerful psychological anchors — and even skilled negotiators struggle to escape them. New research published in the Journal of Experimental Social Psychology finds that adopting a choice mindset when you receive a first offer can reduce anchoring: The simple act of reminding yourself that you can choose any counteroffer expands the range of options you consider, helping you negotiate on your own terms.

Studies of the airline industry show that resilience does not have to come at the cost of efficiency. Managers in a variety of industries can meet both objectives by ensuring that operational performance metrics reflect true customer priorities; using predictive analytics and data-driven insights to allocate system buffers where they generate the most meaningful resilience benefits; and shaping the options offered to customers to improve their company’s resilience to disruptions.

Companies shouldn’t wait until quantum computing technologies have reached maturity to invest in them. As an enabling technology, quantum requires hands-on experimentation, feedback loops that support incremental learning, and co-invention cycles between producers and users — over time — to identify practical use cases. Investments in quantum today may see near-term payoffs, but the focus should be on active learning and the potential for breakthrough innovations over the longer term.

Marketing research traditionally costs tens of thousands of dollars and takes months. Large language models are changing this by compressing timelines from months to days. LLMs enable synthetic consumer “digital twins” for rapid concept testing, AI-moderated interviews for qualitative research at scale, and powerful analysis of unstructured data. These tools allow smaller research teams to conduct larger studies while maintaining quality, thus enabling more frequent testing and experimentation.

Leaders who have successfully managed crises in governments and large organizations aren’t innately better at it. Interviews with high-level leaders in a variety of industries found that people with strong crisis management skills have invested time and effort to develop maturity in seven key areas, dubbed the 7C’s: contingency planning, cross-functional coordination, transparent communication, compassion, confrontation of hard truths, control, and continuity.

A multiyear data transformation project at Caterpillar that has made the company AI-ready provides an exemplary case for what leadership commitment to such a technology project involves. CEOs must go beyond communicating abstract support, by setting a tangible, strategic business goal that the transformation will support; giving teams realistic time horizons and adequate resources; and assigning meaningful, instrumental roles to members of the leadership team.

New research on manufacturers moving to a value-based sales model finds that delivering initial solutions on a one-off basis is relatively straightforward. The challenge lies in scaling those solutions to more customers, which requires structured, repeatable processes and strong, entrenched capabilities. The researchers describe two important phases of capability building that they identified and define the organizational skills, processes, and relationships that successful companies assemble.

As AI systems take on more organizational decision-making, traditional models of accountability — focused on identifying a single culprit when something goes wrong — are breaking down. Drawing on recent research, the authors introduce narrative responsibility, a framework that maps the real story behind failures, distributes ownership across teams, and embeds ongoing reflection into everyday practice. This approach is essential for organizations navigating the complexity of AI-enabled decisions.

Digital platforms and generative AI have made it easier than ever for startups anywhere to access global talent and markets, but companies outside major hubs still struggle to scale. The culprit isn’t a lack of technology — it’s a lack of strategic focus. Research points to two traps companies fall into, but applying a practical framework can help them compete on their own terms, regardless of location.