The Hidden Reason AI Isn’t Transforming Work—And How We Can Fix It

Artificial Intelligence (AI) is no longer just a buzzword; it’s a force reshaping industries, redefining productivity, and reimagining what’s possible in the workplace. Yet, despite the rapid adoption of AI technologies, one glaring issue persists: many organizations aren’t seeing the transformative results they expected. Why? The problem may not lie in the technology itself but in the environments we’re asking it to thrive in.

Ravin Jesuthasan, CFA, FRSA from Mercer, puts it succinctly: "Treating AI like a Swiss Army knife—useful for everything, perfect for nothing—is where many organizations stumble." His analogy is striking: relying on AI to revolutionize work without rethinking workflows, processes, or culture is like using a spoon to fix a car engine. The tool might be valuable, but it’s wholly unsuited to the task.

The Problem with Plug-and-Play AI

The promise of AI is immense. Gartner projects that by 2025, generative AI will contribute to 10% of all data creation. Yet, a McKinsey study reveals that only 20% of companies implementing AI achieve meaningful ROI. The disconnect? Organizations often view AI as a quick fix, neglecting to prepare the groundwork for its successful integration.

"AI doesn’t operate in isolation," Jesuthasan explains. "Its value lies in how it’s embedded into the larger ecosystem of work. Without structural redesign, even the most advanced AI risks becoming just another underutilized gadget."

This highlights a critical truth: AI isn’t a magic wand. It can enhance processes, but it can’t fix broken systems or overcome cultural resistance on its own.

Thriving in the Right Environment

Jesuthasan likens AI to a cactus: resilient and efficient in the right conditions but unlikely to survive in an inhospitable environment. In the workplace, this means AI can only thrive when introduced into systems designed to maximize its potential.

Industries like marketing and social media offer a cautionary tale. Tools such as Sprinklr and Hootsuite promise transformative insights and efficiencies, but without clear goals, skilled teams, and optimized workflows, these platforms often fall short. It’s not the technology that’s failing—it’s the absence of a supportive ecosystem.

In healthcare, the stakes are even higher. When AI thrives, the results are groundbreaking: a study published in Naturefound that AI-assisted diagnostics reduced errors by 85% when paired with human expertise, compared to only 20% when used alone. Yet failures are just as instructive. Take UnitedHealthcare, which faced significant backlash after its AI system for preauthorizing treatments reportedly denied care for thousands of patients, sparking public outrage and regulatory scrutiny. The system worked as designed—but it highlighted a critical flaw: the failure to align AI with patient-centered care and transparency.

These contrasting examples underscore a key lesson: AI performs best when treated as a partner to human expertise, not as a replacement. It requires more than technical competence—it demands ethical frameworks, thoughtful design, and robust oversight.

Collaboration, Not Replacement

AI’s role in the workplace is often misunderstood. Far from rendering human workers obsolete, AI has the potential to be a powerful collaborator. The World Economic Forum predicts that while AI may displace 85 million jobs by 2025, it will create 97 million new roles. The challenge lies in preparing workers for this shift and designing systems where AI enhances, rather than replaces, human ingenuity.

"AI should amplify human capabilities, not mimic them," Jesuthasan emphasizes. "Its real value lies in enabling us to focus on higher-order tasks, not simply automating the mundane."

Building an AI-Ready Workplace

If organizations want to see AI deliver on its promise, they must shift their focus from technology adoption to environment creation. This requires deliberate action in three key areas:

1. Redesigning Workflows: Align processes with AI’s strengths. For instance, if AI excels at data analysis, ensure workflows are designed to feed it quality data and apply its insights effectively.
2. Upskilling Teams: Equip employees with the skills to leverage AI. The World Economic Forum estimates that 40% of workers will need reskilling within the next five years due to AI adoption.
3. Establishing Ethical Guardrails: Create clear frameworks for transparency, fairness, and bias mitigation to ensure AI builds trust among teams and customers.

"AI is a spark," Jesuthasan says, "but the fire depends on us—on how we prepare the ground for it to ignite meaningful change."

The Question We Must Ask Ourselves

AI has the potential to reshape work, but its success isn’t guaranteed. The true power of AI lies not in its algorithms but in what it forces us to confront: the inefficiencies, outdated structures, and unspoken assumptions embedded in our organizations.

What if the greatest value AI brings isn’t in automating tasks but in compelling us to rethink how and why we work? What if AI’s role isn’t to solve problems for us but to illuminate the systemic barriers we need to dismantle?

Jesuthasan’s cactus-in-the-Arctic analogy is a call to action. The question isn’t whether AI is ready to transform work—the question is whether we’re ready to create an environment where that transformation can take root.

The future of work isn’t something AI will deliver on its own. It’s something we must design—intentionally, thoughtfully, and with a focus on progress over productivity. So, as we integrate AI into our workplaces, we must ask ourselves: Are we building systems that merely function, or are we building systems that thrive?

The choice is ours. Let’s make it count.