Many businesses hope that Artificial Intelligence will help them transform their operations and their company’s prospects, but making this a reality is proving more difficult than many had assumed. Getting this right requires a change in the relationship between strategy and execution and between the C-suite and the rest of the organisation. A company’s ability to adapt to the above will make or break its AI transformation.
Companies are already seeing early signs of success with AI, integrating it across business operations to improve productivity and manage customer enquiries, for example. This progress shows how firms are navigating AI Delta, a concept developed by L.E.K. Consulting which measures the performance gap between the value gained from successful AI adoption and the value lost from poor AI strategy and execution.
The AI Delta is full of unknowns, making it a high-stakes challenge in any industry. However, successful AI transformation is happening. A recent survey from L.E.K. Consulting revealed that companies leading early AI implementation efforts and usage have a 47% project success rate, demonstrating measurable impact is possible with the right conditions. Based on the study, the following are a few leadership attributes commonly seen at companies that have been successful in bridging the AI Delta gap:
- A clear strategic vision: Businesses with strong AI strategies are aware of the issues they want AI to address, allowing them to make strategic decisions regarding where to invest their time and capital. This ensures they are not lost in a forest of potential AI use cases.
- Meaningful involvement from the chief executive officer (CEO) and chief financial officer (CFO): In successful organisations, the top leaders are dedicated and actively involved in implementing the strategic visions even if the digital executive is still in charge of the execution.
- Greater collaboration between technology and functional leaders: The technology team must collaborate closely with other departments to ensure the successful deployment of AI.
A clear strategic vision
While organisations may believe that they are ready to transform their operations, it is important that they have the right data and technology infrastructure for this. Company culture and regulation are also key factors that must be considered while implementing these strategies.
It is important for businesses to clearly state a strategic vision for their AI with a clear focus that ensures the above factors are considered. Having a well-defined set of goals will allow companies to overcome any obstacles. And this was recognised by more than half the companies surveyed, which found that identifying a strategic vision was consistently a top priority amongst those that had early success with AI adoption.
The following are a few measures companies can take in order to ensure their strategic vision is successful and is effective in keeping their AI strategy on track:
- Executive leadership vision ownership: It is crucial that senior executives promote and foster an AI driven culture and owns the vision.
- Cross-functional teams: It is necessary to ensure there is collaboration within different teams as the AI transformation affects nearly every aspect of the organisation.
- Pragmatic governance and execution: A carefully designed and executed AI plan can avoid any potential problems and increase the strategy’s credibility.
- A focused approach to applying AI: As AI can help across various functions like productivity and product innovation, it is important to focus on areas that are linked to the strategic vision to ensure the process is fast and regulated.
Meaningful involvement from the CEO and CFO
There are multiple approaches that organisations use to adopt AI transformation. Some companies follow a bottom-up strategy for their AI, allowing the employees to explore the technology as per a set of policy guidelines. This approach often falls short due to its disorganised nature and the lack of an ultimate goal. A more effective method is to set clear application guidelines from the leadership team in an organised structure.
The involvement of the CEO and the CFO makes the importance of AI transformation to the organisation clear. The two senior executives must be active participants and advocates of the strategy, and their involvement is particularly significant due to the time and financial commitment. The CEO and CFO are essentially ensuring alignment of the businesses strategy to AI and to ensure the engagement of the wider business.
Many CEOs and CFOs only engage with the AI transformation at the surface level but it’s important to understand that technology leaders cannot drive AI success alone. These leaders can bring together the rest of the C-suite to agree on the strategic vision as the implementation requires a great amount of cross functional collaboration. It is therefore crucial that these leaders are at the front of the integration as it can determine how successful it is. They are also best placed to determine what each business unit needs and how it can affect workflows in other areas.
Once a strategic vision and engagement from leadership are in place, it becomes a constant test- and-tweak process. Any feedback received from the users will be used by the team to understand how to better implement AI across the organisation. While these circumstances exist with other technologies as well, the failure or success with AI is magnified because of the level of value creation that comes with success. Stakeholders are constantly analysing the company’s use of AI to see if and how much strategic advantage they have from it.
Rewriting the AI transformation playbook
While AI transformation in itself can be quite difficult, there are a few steps companies can keep in mind during the integration:
- Understand your key business value drivers and how AI can enhance them
- Identify the use cases that align with your value drivers
- Define the infrastructure to support the business where it is, including making the necessary investments in data and talent
- Build the use cases in collaboration with colleagues throughout the organisation
- Commit to and enable change to ensure new, AI-enabled ways of working can take place
- Get wins on the board that can be measured and scaled
- Communicate with internal and external stakeholders
While the age of AI is here, many companies are finding it difficult to understand where it will ultimately place them. Organisations that have been the most successful in implementing AI thus far have adopted similar approaches and have bridged the AI Delta. By bringing together strong engagement from leadership and collaboration among technology and business leaders, companies can set up their AI transformation for success and ensure that they are winners in this new era of competition.
