What’s wrong with your board?
Three common ‘traps’ impact boards across the world in private and publicly listed businesses alike. Here’s how to identify which trap is standing between you and success in the boardroom....
Brain Circuits
Stop running! Why you may be implementing AI pilots the wrong way
A scattershot approach to adopting generative AI (GenAI) won’t deliver transformative impact. Go through the questions below to gauge whether you’re implementing pilots the wrong way, and check out the four-step process to unlocking GenAI’s full potential through the “deep and narrow” approach.
Checklist: How are you currently implementing AI?
- Are you launching numerous pilots across departments, deploying GenAI as widely as possible to see what works?
- Do you greenlight every AI project that has the potential to yield a positive return?
- Are you spreading your efforts and resources across one-off (and unrelated) use cases throughout the organization?
- Are you chasing quick wins and marginal efficiencies?
- Do you measure progress by short-term ROI?
Whenever you deploy AI deeply, your goal should be to protect or enhance an existing competitive strength or to create a new advantage.
Four-step process to identify strategic advantage
Step 1: Identify the most promising opportunity
GenAI is a general-purpose technology with a spectrum of uses, from office productivity tasks to value-generation activities, such as identifying new business models, overhauling customer experiences, and domain reinvention (the end-to-end reimagination of work processes or functions). Office productivity is not likely to yield a competitive advantage. Enabling new business models using AI is an exciting opportunity, but may be difficult for companies selling products in which AI cannot be infused easily. Domain reinvention – which covers functions and processes – is an area of opportunity for almost any firm.
Step 2: Identify areas of lasting advantage
Whenever you deploy AI deeply, your goal should be to protect or enhance an existing competitive strength or to create a new advantage that is hard to copy.
Step 3: Choose the right sequence
GenAI can boost profits by enabling cost-efficiencies and growth. Should you prioritize efficiency, growth, or a combination of the two? When you’re going deep and narrow, starting with cost-efficiency gains within a single domain is often the smartest option, because you can typically reduce your costs more quickly than you can achieve top-line growth.
Step 4: Monitor the competitive landscape
Your competitors are also using GenAI to strengthen their competitive positioning. Can your top competitor replicate a valuable strength of yours by using GenAI? To avoid losing your advantage, you must deploy GenAI in ways that will increase the gap between you and your competitors.
To unlock gen AI’s full potential, resist the urge to experiment broadly. Instead, pick one area and go deep and narrow.
Key takeaway
Shallow and broad AI deployments aren’t wrong and do save time and money. But, to unlock gen AI’s full potential, resist the urge to experiment broadly. Instead, pick one area and go deep and narrow, concentrating efforts where scale and synergy can drive meaningful change and reinforce your strengths.
Further reading
What does a good AI use case look like?
A strategy for AI, not an AI strategy
How to transform from an AI-enabled to an AI-centered enterprise
Authors
Related
5 key steps to scaling AI: Lessons from the best-in-class
Many organizations are discovering that scaling AI is far more difficult than piloting programs. Drawing on data from the world’s largest 300 companies, the IMD AI Maturity Index reveals how the leading companies...
Do you know the ABC of Gen Z?
Assumptions about digital natives in the workplace often prevent leaders from building more meaningful connections....
Are you reaping the rewards of radical collaboration?
Workplace silos are a huge productivity inhibitor. Casper Herzberg, CEO of industrial software company AVEVA, tells Michael Wade how radical collaboration can create value....
Learn Brain Circuits
Join us for daily exercises focusing on issues from team building to developing an actionable sustainability plan to personal development. Go on - they only take five minutes.
Explore Leadership
What makes a great leader? Do you need charisma? How do you inspire your team? Our experts offer actionable insights through first-person narratives, behind-the-scenes interviews and The Help Desk.
Join Membership
Log in here to join in the conversation with the I by IMD community. Your subscription grants you access to the quarterly magazine plus daily articles, videos, podcasts and learning exercises.