admin — 10 July 2024
Creating a broad vision, emphasizing people, and fostering innovation are three of the keys to a comprehensive AI strategy for leading today’s AI transformation.
AI will add 7% to global GDP (an additional $7 trillion) over the next decade, while boosting productivity at the same time, as projected by Goldman Sachs. While AI adoption is growing rapidly, it is still unevenly distributed and varies widely by industry and organization size. There’s no need to rush into AI from a fear of missing out, but planning for the changes proactively is good leadership. It’s time to make a plan.
Start with the reasons for AI
Why do you need AI? That’s the first question in any AI strategy decision. What problems do you want to address? What opportunities are you trying to seize? Use your AI strategy to align technology with business needs in AI adoption assessment.
Make the vision broad. Too often, AI strategy focuses on isolated uses, without considering the organization’s overall goals, mission, and values. A July 2024 Deloitte study confirms that organizations will not recover their development costs if they only deploy “disconnected” uses.
Getting a range of ideas across functional areas will help avoid the problem of isolated or disconnected uses. Top leadership should instead start with their core business strategy. Engage leaders from all functional areas to get the broadest perspectives on how to use AI.
Your AI strategy should be in alignment and harmony with your existing technology strategy. How can they support each other? What pain points can AI address that augments your IT? For example, a customer service AI tool might also be useful if adapted for human resources, procurement, or even payroll – check if there is a repeating pattern the tool offers that can be tweaked and used elsewhere.
Put people at the center of AI strategy
Developing a human centered approach to AI is fundamental to success, and achieving buy-in from employees and team members is the first step in this process.
While 69% of leaders plan to invest in technology, including AI, less than 30% of employees feel that AI will lead to new jobs or skills, as highlighted in an article by PwC. A record 22% of workers worry their jobs will become obsolete because of AI, as shown by a 2024 Gallup survey. However, AI, when applied holistically, can create new and creative job opportunities. Educating and engaging employees to alleviate their fears should be part of your AI strategy.
Communicate early and often
The first part of a successful AI strategy is to communicate its benefits – and to repeat that message until it is well received and absorbed.
According to PwC, AI can improve employee satisfaction (ESAT) by automating repetitive tasks. It can free humans to do more complex and creative work, augmenting rather than replacing them.
That’s a win-win. The organization makes gains in productivity and creativity, while people improve their lives. Leaders need to communicate these benefits as a core part of its AI strategy.
Emphasize learning, development, and failure
The next step in creating an AI strategy is to embrace learning, development, and – yes – failure. While learning and development have advocates inside organizations, failure is a lonely step-child. But AI development might be summed up by the motto “fail fast, iterate often.” Something has to give.
More than half of the respondents in PwC’s 2023 CEO Survey said their organizations don’t tolerate small scale failures – while employees found little tolerance for failure in two-thirds of organizations. That needs to change, particularly with an emerging technology like AI.
Experimentation is the key to finding out what technology can do, and many experiments will fail. To get the most from AI technology, organizational leaders must become risk-tolerant and failure-safe.
To get the most from people, organizations must create psychological safety to encourage risk taking and experimentation. Leaders need to be adaptive to rapid changes.
Find a balance between efficiency and new value
Deciding how to take advantage of efficiency and productivity gains is a final consideration for any AI strategy. How will your organization use the gains?
PwC identifies three approaches: (1) use AI for efficiency and cost cutting; (2) use AI to create new value by reinvesting gains; or (3) a mixture of the two. According to the authors, a bias toward creating new value offers better outcomes. Examples include:
- Boosting ESAT by automating repetitive tasks;
- Raising productivity by augmenting human efforts; and,
- Freeing resources for experimentation and innovation.
The 2024 Deloitte study came to a similar conclusion. It found that lower achieving organizations tend to use AI for efficiency and cost cutting, while high achieving organizations are more likely to use AI to create new value by “improving customer satisfaction, creating new products and offers, and entering new markets.”
It’s worth emphasizing that investing in new value can and should be part of an organization’s people strategy. Reinvesting AI gains should start by boosting ESAT and productivity to give humans more capacity to innovate.
To summarize: With adaptive leadership, your organization will benefit from a comprehensive AI strategy under a broad vision. To deploy AI in support of your organizational goals, keep people at the center of your AI strategy by empowering them to do more creative work. Finally, let AI transformation create new value by looking for opportunities to do new things, enter new markets, and innovate. If you would like to learn more about developing an AI strategy for your organization, please contact us.
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ForeMeta offers breakthrough leadership coaching to develop CEO self-leadership and leading teams and organizations. We offer both individualized coaching or group coaching to help leaders and their people achieve greater success. Please contact Mike@ForeMeta.com