- In an article produced in partnership with Axios, Smartsheet argues that AI’s value increasingly depends on understanding how businesses actually operate, rather than relying solely on model capabilities.
- As the capabilities of advanced AI models begin to converge, organizational knowledge is becoming a critical factor in determining the effectiveness of AI adoption.
- According to McKinsey’s State of AI 2026 report, 37% of surveyed businesses reported that AI contributed to earnings before interest and taxes (EBIT), a figure largely unchanged from the previous year.
- Only 6% of businesses qualified as high performers in AI adoption, reporting that AI contributed at least 5% of EBIT and assessing its impact as significant.
- Smartsheet argues that expanding AI usage does not automatically generate financial value if businesses lack information about their workflows and how work is coordinated.
- The concept of “institutional intelligence” refers to an organization’s accumulated operational knowledge, including rules, exceptions, authority structures, problem-solving mechanisms, and practical experience.
- Much critical knowledge is not documented in official materials but exists in employees’ experience, collaborative relationships, and approaches to handling situations.
- Without this knowledge, AI agents may complete individual tasks correctly while failing to align with management objectives, creating a gap between strategy and execution.
- Smartsheet calls this phenomenon “execution drift,” in which work passes through multiple individuals, departments, and systems before gradually deviating from its original objectives.
- Businesses need to standardize operational knowledge into data and rules that AI can access, understand, and apply to individual tasks.
- By sharing a common knowledge base, AI agents can quickly understand organizational context instead of having to learn everything from scratch.
- Smartsheet proposes connecting people, processes, data, and AI through a unified work management platform with controlled access permissions and traceable actions.
- The company says that more than 85% of Fortune 100 companies use the Smartsheet platform, although the article does not provide separate quantitative evidence of the solution’s financial effectiveness.
📌 The key challenge in enterprise AI adoption is that intelligent models alone are insufficient without knowledge of how an organization operates. With only 6% of businesses achieving significant AI contributions to EBIT under McKinsey’s criteria, standardizing workflows, authority structures, and execution experience offers a potential path to improved performance. However, this content is sponsored by Smartsheet on Axios, so recommendations for centralized management platforms should be distinguished from independent research evidence.
