Beyond the AI Hype: Strategic Insights for Business Leaders
Today, the world is shaped by many evolving forces, presenting a dynamic and sometimes overwhelming landscape for business and marketing leaders as it continues to be disrupted. They strive to innovate, make meaningful connections, and manage risks amidst these shifts.
Generative AI, with its vast and rapidly changing landscape, has certainly added to this disruption. Keeping up involves wading through an ocean of daily updates, each offering a glimpse into new advancements, prospects, and potential setbacks. In the face of such an onslaught of information, it's easy to feel overwhelmed. Attention-grabbing headlines can make leaders question their path: Do we wait? Do we forge ahead? Where do we even start? The sheer magnitude of it all can indeed be immobilizing.
In this swiftly evolving landscape, inaction becomes the silent saboteur of progress. Senior business leaders cannot afford the luxury of a wait-and-see approach. While we are still in the early stages, business leaders must begin by recognizing and understanding the potential of these new advancements. Failing to do so not only risks missing out on invaluable opportunities and falling behind but also gives the competition more time to learn, plan, and harness generative AI's potential.
Is This Just a Bunch of Hype?
The question often arises: Is this just a bunch of hype amplified by new tool providers trying to create more urgency to sell products? While I don't think this is a passing fad, I do believe some are playing heavily into the narrative they are trying to promote or create. I think the question is more about where we are in the hype cycle, which is at the peak of inflated expectations (see visual below).
When it comes to hype, I share the perspective of Scott Brinker, who is someone I have deep respect for and have been following for years. In his post, The one thing everybody forgets about Gartner’s hype cycle, he insightfully explains, “At the peak of inflated expectations, the reality is far below what’s being discussed ad nauseum in blog posts and board rooms. In the trough of disillusionment, the actual, present-day potential is sadly underestimated — discussions shift to the inflated expectations of the next new thing.” Interestingly, this gap between hope and reality can be an advantage — for those with foresight. As Brinker puts it, "The gap between expectations and reality creates opportunities for a savvy company to manage to the reality while competitors chase the hype cycle." He crafted an excellent representation of this concept below:
From my vantage point, informed by the dawn of the internet and the surge of Martech, and current research and experiences, we have a treasure trove of historical and current insights to draw from. We can gauge what stands out in this AI phase and plan accordingly, knowing that it is still early, the world is still learning, and things will indeed change. Quickly.
From Internet Dawn to MarTech Surge: Adapting Lessons Learned for the AI Era
As many of us experienced in the early days of the internet, many misjudged its potential and the technological impact it would have until its adoption started to increase. And we all know where that netted out regarding its exponential growth and impact on the world.
More recently, the meteoric rise of marketing technology tools—from a modest 150 in 2011 to a staggering 11,038 in 2023—stands out as a cautionary lesson in marketing and technology management. Rapid, unplanned strategies and adoption of technologies during the Martech boom left many organizations struggling with tool overload, integration nightmares, and disappointing ROI. However, companies that approached this surge with a clear strategy, prioritized integration, and emphasized employee training are reaping the benefits and setting the standard for successful utilization.
I vividly remember getting communications like, “We bought this new marketing tool and need to launch a campaign in 2 weeks, and it's not as easy as we thought it would be." Unfortunately, this wasn’t an isolated incident. Over the years, the nature of these calls shifted, morphing into dialogues about “rip out and replace strategies.” These were succeeded by the evergreen "build or buy" debate, which later expanded to include build, buy, or enhance discussions. Many organizations grapple with these challenges even after a decade, especially as fresh technological innovations emerge.
The AI revolution is indeed reminiscent of past technological revolutions in certain aspects, especially regarding skepticism, potential, impact, and disruption. However, the speed at which AI is being developed and embraced, its predicted impacts, and the challenges it brings forth are unprecedented. This is because the foundation has been built, and behaviors have shifted based on everything that has come before.
Since the writing of this post, Paul Roetzer explained this best in the latest Marketing AI Show:
There are milestones that have allowed this all to happen…It’s taken off way faster because cloud exists and we can do this compute through Google or Amazon or Microsoft and video chips exist because they started building them for video games 20 years ago and realized that the GPUs could do deep learning..all of these things are the infrastructure that now enables this to happen seemingly overnight.
Earlier this month, McKinsey published a report titled, The state of AI in 2023: Generative AI’s breakout year. In it, they outline the results of their annual survey, just some highlights are as follows:
Less than a year after many of these tools debuted, one-third of McKinsey's survey respondents say their organizations are using gen AI regularly in at least one business function.
Nearly one-quarter of surveyed C-suite executives say they are personally using gen AI tools for work.
More than one-quarter of respondents from companies using AI say gen AI is already on their boards’ agendas.
40 percent of respondents say their organizations will increase their investment in AI overall because of advances in gen AI.
Organizations must learn from the past while drawing on the present to strategically harness AI's power and mitigate potential downsides.
The Critical Role of an Aligned Executive Leadership Team
At the foundation of a successful AI strategy, will be the engagement and alignment of core leaders within the company. Initiating the conversation internally to align the firm’s position on AI is critical. Before they can align, these leaders must establish a foundational understanding of AI's capabilities. They should also process this information to gauge how it might impact their individual roles and teams to help further the discussion. Key stakeholders should encompass the Executive Leadership, which includes departments like marketing, technology, security, HR, and legal. Their insights, concerns, and strategic direction will be pivotal in shaping the adoption and integration of AI.
Executive Leadership & Sponsorship: The leadership and support of the executive team, will be important. It carries the weight and resources necessary to propel an AI initiative from vision to reality.
Marketing: In addition to understanding the more immediate impact generative AI can have on the marketing department, marketing leadership plays a pivotal role in AI business strategy development. Beyond grasping the direct influence of generative AI on marketing and operations, they oversee both internal and external communications concerning the company's AI stance. This includes conveying a coherent message that delineates the company’s objectives and ethical standards linked to AI use.
Human Resources: HR leadership is integral to AI business strategy development. They are instrumental in securing the right talent and responding to organizational concerns. Besides addressing ethical matters and job security queries tied to AI, HR is vital for identifying upskilling and reskilling opportunities. Continuous training and development, spearheaded by HR, are essential for the company's forward momentum.
Technology & Security: Leadership in technology is crucial in AI business strategy development. Beyond their primary duties, they guide the selection, development, and implementation of AI solutions. Additionally, they assess and manage AI-related security and technological risks, ensuring the systems are resilient and secure.
Legal and Compliance: For companies, especially those in highly regulated industries, the risks associated with AI are substantial. Legal teams must be vigilant in assessing the regulatory landscape, copyright issues, and other potential legal pitfalls.
Other Core Business Leads: The specific stakeholders will vary depending on the industry and size of your organization
Involving these key stakeholders in strategic planning and decision-making is not just a formality—it is a critical step toward responsible and effective AI integration. These leaders should be engaged from the outset, fostering an environment of collaboration, and open dialogue. Their collective input forms the backbone of a holistic, company-wide AI strategy.
Video by Google DeepMind
Embracing a Macro View: Shaping a Generative AI Strategy and Leveraging Scenario Planning for the Future
As business and marketing leaders learn more about the technology, capabilities, and tools, it will be important to take a step back and consider the big picture: How will generative AI align with your existing goals, culture, compliance requirements, and team skills? Adopting this macro view will ensure better alignment, reduce friction, and guide the integration of AI into your existing strategies, highlighting areas that need adjustment.
This principle applies to each business domain as well. The mental ambidexterity it takes to delve deep and pull back to take a broader view as each division assesses this from their perspective should be understood and recognized.
Generative AI is incredibly powerful—but it’s not a magic wand. Lay the groundwork with education and training programs. Demystify AI for your team, giving them the confidence and knowledge they need to excel. And remember, AI has its risks; be sure to have your risk assessments and mitigation strategies ready to go.
Nobody can predict exactly what’s going to happen, but we can learn from the past and plan ahead based on what we know today. Incorporating scenario planning into your process is key. Although scenario planning doesn't predict the future, it prepares an organization to be adaptive and proactive, ensuring it's better equipped to handle whatever comes its way.
Change Management in the Age of AI
As generative AI makes its mark on businesses worldwide, it's crucial to understand that this is not merely a technological shift. It's a transformative change affecting every facet of an organization. From redefining roles and reskilling teams to realigning strategies, integrating AI demands a comprehensive change management approach.
In the article titled, 'Reskilling in the Age of AI,' published by Harvard Business Review, the authors point out:
"The average half-life of skills is now less than five years, and in some tech fields it’s as low as two and a half years. Not all knowledge workers will lose their jobs in the years ahead, of course, but as they carry out their daily tasks, many of them may well discover that AI and other new technologies have so significantly altered the nature of what they do that in effect they’re working in completely new fields."
They go on to explain:
At most of the organizations where we interviewed, reskilling initiatives are visibly championed by senior leaders, often CEOs and chief operating officers. They work hard to articulate for the rest of the company the connection between reskilling and strategy and to ensure that leadership and management teams understand their shared responsibility for implementing these programs. A robust change management plan ensures that stakeholders at all levels are informed, engaged, and prepared for the transition. This isn't merely about software implementation; it's about reshaping organizational culture, workflows, and mindsets to thrive in a world powered by AI.
In a world increasingly influenced by generative AI, it is essential for organizations to move beyond the hype, grounding their approach in historical insights, current research, robust strategies, comprehensive change management plans, and holistic stakeholder engagement. This isn't about mere adaptation; it's about leading the charge in a transformative era. With clear-eyed foresight, strong executive backing, and a commitment to continuous learning, organizations can not only navigate the AI landscape but also harness its immense potential, setting a benchmark for a future-ready enterprise.
Interested in learning more about our AI Strategic Suite offering to help you along this journey? Reach out to us at Growthential for more information.