McKinsey leaders report that companies using AI in a focused, business-driven way are seeing major financial gains, including an average EBITDA uplift of 20%, by building strong organisational capabilities rather than just having big ambitions.
Focused AI Strategy Drives Major Financial Gains
Companies that are using artificial intelligence (AI) in a focused and business-driven manner are seeing significant financial gains, with some reporting an average EBITDA uplift of 20 per cent, according to senior leaders at McKinsey.
In a recent episode of The McKinsey Podcast, McKinsey Senior Partners Kate Smaje and Rob Levin said the companies successfully scaling AI are not necessarily the ones with the biggest ambitions, but those building the right organisational capabilities to turn AI ideas into business value.
Speaking about the findings from McKinsey's updated "Rewired" framework, Smaje said, "Those 20 companies have an average EBITDA uplift of 20 per cent." She added, "For every dollar that they are spending on investment, they're getting three dollars back on average."
According to the discussion, the companies seeing the best results are focusing on a small number of high-impact areas instead of spreading AI projects across the organisation. "Two-thirds of the cohort were able to do this with three or fewer focus areas for their transformations," Smaje said. "They're not papering AI everywhere across the organisation. They're being incredibly focused on where they point their resources."
The Shift to Agentic AI and Early Adopter Advantage
The podcast highlighted that the next phase of AI adoption is shifting from simple automation towards "agentic AI," which can automate entire workflows and processes.
Levin said companies that invested early in digital and AI capabilities are now better positioned to benefit from generative and agentic AI technologies. "The companies that have built these capabilities in AI 1.0 have succeeded far more as we've gotten into AI 2.0 than companies that haven't," Levin said. He pointed to mining company Freeport-McMoRan as an example, saying the company first created a digital twin for its copper concentrator operations and later expanded AI applications into other business areas to generate additional value.
AI as a Business-Led, People-Centric Transformation
The discussion also stressed that AI transformation is increasingly becoming a people-led and business-led exercise rather than just a technology project. "Every AI transformation at its heart is a people transformation. That is truer today than it has ever been," Smaje said.
She added that business leaders, finance heads and HR teams all need to play a central role in AI adoption, saying, "Long gone are the days when you could delegate this to the technology function and hope for a good outcome."
Levin said many companies fail because they treat AI projects as isolated technology initiatives instead of redesigning workflows and operations from end to end. "One of the first things businesses miss is that these AI transformations need to be entirely business-led," he said.
AI Revolutionizes Software Development Productivity
The podcast also highlighted how AI is changing software development itself. Levin said advances in AI-assisted coding are dramatically increasing productivity. "There is this 20 times software development productivity," he said, adding that AI is "collapsing this model of the 'two-pizza team' of around eight people, to two people."
Gaining a Competitive Edge Through Speed and Agility
Smaje said companies successfully using AI are operating at a much faster pace than peers, particularly in turning decisions into action. "Their latency from insight to decision, and from decision to action, starts to look different," she said. "This isn't digital transformation for transformation's sake or AI transformation for its own sake. It's about outcompeting."
The podcast conversation was adapted from McKinsey's webinar series and focused on how businesses can scale AI adoption while delivering measurable financial outcomes. (ANI)
(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)