It’s been two and a half years since ChatGPT took the world by storm. AI has been on the tip of everyone’s tongue ever since. Competitors have quickly emerged, countless startups are launching with “AI” in the name, and the hype train hasn’t slowed down. Companies big and small are spending serious amounts of money to be sure they’re not left behind. However, early results are showing a lack of AI maturity, and it may be time to slow AI spending.
AI is not going away. Investment in the technology continues to grow. According to IDC, AI spending will more than double in the next three years, surpassing $630 billion. And its impact on business will change how businesses go to market.
According to Harvard Business Review (HBR), the majority of companies are not yet able to harness the value AI can deliver. “Companies aren’t generating ROI on their AI investments because they’re still thinking about AI as a siloed, piecemeal solution instead of the data, software, and process foundation for a completely different way to power a business.”
AI evolution is happening so quickly that most leaders are tasking their teams with trying different solutions in hopes of finding a needle in a haystack. Instead, the teams are burning through their budget while wasting valuable time and resources on siloed tests. HBR provides the following suggestions to improve your AI approach.
Stop to Reflect
Instead of continuing to spend in an ad-hoc manner for fear of being left behind, pause investments and assess your organization’s core functions and values. Make sure the leadership team is aligned on your strategic growth plan. Get into the details and determine where AI can support you. The industry will continue to evolve, the best solution options will become clearer, and pricing will fall.
Reflect to Reframe
Value creation is never linear, and investing without a clear understanding of the outcome you’re after is chasing yesterday’s shiny new object. Instead, consider where you are going. Look at your industry and how it’s changing in the near term. Are there trends emerging? Have you considered different scenarios? By looking to the future first, it is easier to reverse engineer what you can do today to meet your goals and deliver the value you’re seeking. Questions you can ask include:
- What is our core competitive differentiator today?
- How will that change over time?
- What is the biggest differentiator to win in the future, and why?
- What are some adjacencies and forces that will play out, and how do those suggest you should play differently?
Reframe to Focus
Once you have answered these questions, you have a much more explicit focus on your positioning, how you will go to market, and where you want to make your AI investments. As the article notes, “Double down on investments in those core areas that will guarantee you a first-mover advantage, and use AI to unlock tomorrow’s value. The companies that will win in the next era of AI will invest in people and processes as well as tech. Investing solely in solutions is definitely not enough.”
AI innovation will continue to move quickly with new announcements promising bigger, better, and faster solutions. By slowing down to build a solid AI foundation, your strategy will help you focus and cut through the noise by quickly determining which of the hyped features support your growth, and which are distractions.
As the US military’s special forces teams say, slow is smooth and smooth is fast. The winners of AI adoption to unlock value and meaningfully evolve their company would be wise to use the same approach.
For advice and help building a leadership team in the age of AI, send us a note, and one of our executive search consultants will follow up with you.