Just about everybody agrees that AI is an essential business tool. This means that it’s now time to give the technology the status it deserves by creating a business unit that’s completely dedicated to deploying innovative AI applications across the enterprise.
An AI innovation unit serves as an organizational hub for designing and deploying AI solutions, as a catalyst for adopting and integrating of AI, and as a focal point for AI business exploration and experimentation, says Paul McDonagh-Smith, a senior lecturer in information technology and executive education at the MIT Sloan School of Management. “By spinning-up an AI innovation unit, your company can accelerate its digital transformation, sustain competitiveness, and create a culture of innovation,” he explains in an online interview.
McDonagh-Smith believes that an AI innovation unit can help convert the AI’s potential into enhanced product offerings and customer experiences, unlocking new revenue streams and creating a competitive advantage. “Your AI innovation unit will also provide a space and a place to combine AI research and responsible application of AI to help you minimize risks while maximizing benefits.”
Mission Goals
An AI innovation unit’s mission should be to coordinate, plan, and prioritize efforts across the enterprise, says Steven Hall, chief AI officer at technology research and advisory firm ISG. “This can include ensuring the right data assets are used to train models and that proper guardrails are established to manage risks,” he recommends in an email interview. Hall adds that unit leaders should also work toward keeping relevant individuals in the loop while prioritizing use cases and experiments.
An AI innovation unit should always support sustainable and strategic organizational growth through the ethical and impactful application and integration of AI, McDonagh-Smith says. “Achieving this mission involves identifying and deploying AI technologies to solve complex and simple business problems, improving efficiency, cultivating innovation, and creating measurable new organizational value.”
A successful unit, McDonagh-Smith states, prioritizes aligning AI initiatives with the enterprise’s long-term vision, ensuring transparency, fairness, and accountability in its AI applications. “An effective AI innovation unit also increases the flow of AI-enhanced policies, processes, and products through existing and emerging organizational networks.”
Carolyn Nash, chief operations officer for open-source software products provider Red Hat, says her firm recently established an AI innovation unit when enterprise leaders recognized that AI had become a top IT strategy priority. “This newly-formed team is now focusing on putting the appropriate infrastructure foundations in place for AI to be developed at scale, and in a cost-efficient manner,” she explains in an online interview. Part of that work, Nash notes, includes identifying and creating productivity use cases.
Leadership Requirements
An AI innovation unit leader is foremost a business leader and visionary, responsible for helping the enterprise embrace and effectively use AI in an ethical and responsible manner, Hall says. “The leader needs to understand the risk and concerns, but also AI governance and frameworks.” He adds that the leader should also be realistic and inspiring, with an understanding of the hype curve and the technology’s potential.
The unit should be led by a chief AI officer (CAIO), or an equivalent senior executive with expertise in both AI technology and strategic business management, McDonagh-Smith advises. “While this leader possesses a strong understanding of data science, machine learning, and innovation strategy. alongside finely-tuned leadership skills, this individual also needs to be adept at bridging technical and non-technical teams to ensure AI that initiatives are practical, scalable, and personalized to business goals.”
Team Building
McDonagh-Smith recommends staffing the AI unit with a multidisciplinary team that combines the capabilities of data scientists, machine learning engineers, and software engineers, as well as AI ethicists, HR experts, UX /UI designers, and change management specialists. “This will provide the diversity of perspective and expertise necessary to fuel and drive your AI innovation unit forward.”
Nash observes that there will also be times when it becomes necessary to seek advice and support from other enterprise stakeholders, particularly when collaborating on projects with elements that lie beyond the main team’s skills and knowledge. She adds that the unit should focus on addressing existing business issues, not seeking new problems to solve. “Proactively capturing requirements from strategic leaders across the business — HR, marketing, finance, products, legal, sales — is critical to ensuring the AI unit is correctly focused.”
Reporting
McDonagh-Smith recommends that the AI innovation unit’s leader should report directly to the enterprise C-suite, ideally to the CEO or chief digital officer (CDO). “This reporting structure ensures that AI initiatives remain a visible strategic priority and are seamlessly integrated with broader business goals,” he says. “It also allows for clear communication between the unit and top-level leadership, helping to secure the necessary support for scaling successful AI-forward projects across the organization.”
A Collaborative Culture
An AI innovation unit requires a collaborative culture that bridges silos within the organization and commits to continuous reflection and learning, McDonagh-Smith says. “The unit needs to establish practical partnerships with academic institutions, tech startups, and AI thought leadership groups to create flows of innovation, intelligence, and business insights.”
McDonagh-Smith believes that the unit should be complemented by a strong governance framework that will allow it to manage AI risks, uphold ethical standards, and ensure AI deployments that align with enterprise values and societal responsibilities. “By introducing regular impact assessments and transparent reporting on AI initiatives, you’ll build trust both internally and externally … and establish your team as a leader in evolving business practices.”