Challenges in Commercial Deployment of AI: Insights from The Rise and Fall of IBM Watson’s AI Medical System

Published 14 Feb 2023
Reference 6753
Topic Strategy
Region North America
Length 16 page(s)
Language English

When IBM set about commercializing its artificial intelligence-driven Watson AI in the healthcare market, its early successes were widely publicized. Senior managers and the media claimed that its diagnostic features would soon surpass those of the sharpest doctors. The case describes the large gap between what was promised and what happened in practice, offering insider insights on why IBM’s projects failed. As the corporate commitment to AI escalated in response to successful lab results, cognitive dissonance arose between managers’ expectations and what they could actually deliver. How could that have happened? Three reasons for Watson’s downfall are explored: 1) The tendency for societal expectations to exceed the actual technical capabilities, leading to a gap in perception between AI in the lab and AI in the field. 2) Overselling of the economic benefits of AI by the salesforce; 3) Failure to secure the cooperation of key stakeholders, notably doctors who were asked to improve the performance of AI but were undermined by claims that AI could outperform them.

Teaching objectives

After reading and analyzing the case, students/participants will be able to: - Explore how organizations deal with technological uncertainty when seeking to innovate - Understand what drove the escalation of IBM’s commitment to and investment in AI - Identify the roots of cognitive dissonance and stakeholders’ resistance to technological adoption

  • AI
  • Artificial Intelligence
  • Digital Technologies
  • Strategy Implementation
  • Strategy Execution
  • Commercial Success
  • Escalating Commitment
  • Healthcare
  • IBM Watson
  • Cognitive Dissonance
  • Stakeholder Management
  • Overselling
  • Hype
  • Q12023