Will AI change your strategy?

ChatGPT has been with us for two years. The hype and fear make it feel longer. ChatGPT is a ‘generative’ AI tool. It uses clever predictive maths, probabilities and an enormous amount of training data to generate text. Generative AI tools can ‘transform’ our text prompts into words, sounds, images, music, video, code, etc.

It is incredible technology that we are just starting to understand how to use. I imagine it is like the first-time accountants saw Microsoft Excel in action 37 years ago. It probably blew some people’s minds (and yes, some others probably thought it would never catch on).

Now we take Excel and all its derivatives for granted. The same will happen with ChatGPT. It is going to be around for a long time and, like Excel, its rate of improvement will slow.

Imagine you are leading an accounting firm 37 years ago and you have just seen Excel in action. Would you change your strategy? Your current business model is based on a profitable ratio of partners, seniors and juniors charging by the hour and delivering a set of ‘best practice’ accounting services at ‘industry standard’ speed.

You start to wonder about the impact of Excel on your business. Some people in your company dismiss the ‘expensive calculator’ and would rather rely on graph paper and long division. On the other hand, some are excited by the potential and can’t wait to get their hands on a machine running Excel. Others are secretly worried about the machines taking their jobs.

Your business development team is nervous about what competitors might do. Perhaps they will start delivering accounting services more quickly, more cheaply, or more profitably. Even worse, they might offer a higher quality or wider variety of accounting services. And then, heaven forbid, customers will start demanding more.

In response to this uncertainty, you could try to tightly govern the use of Excel. You could establish a committee to oversee its use and set up a risk management framework. You could even ban staff from using it.

Of course, with Excel we have a good idea of what happened. The companies with staff that embraced the new technology went on to become more profitable. The people who learned how to use the new tool started to do different things – their jobs changed. The entire accounting and financial services industry evolved rapidly in response to customer expectations. Strategies changed. New competitors emerged. But none of it happened overnight.

“Generative AI can also supercharge staff productivity and engagement. The secret to using generative AI is not to ask, ‘what can AI do?’. Rather, it is about asking, ‘what can I do with AI?’”

The same will happen on the back of generative AI tools such as ChatGPT. But unlike Excel, which can be constrained to the areas of your business that run on numbers, ChatGPT is a general-purpose tool. Every person in your organisation can benefit from knowing how to use ChatGPT. Yes. Every single person. All the little ways that ChatGPT helps with everyday work add up to big changes.

This means that, of course, your current strategy will change. It will change because your staff will eventually demand training and access to generative AI tools, or they will move to competitors that have embraced new ways of working. Or it will change because your competitors will start using AI to deliver new and improved services, forcing you to adapt to keep your existing customers.

There are many different ideas about what strategy is and how it is done, but most people agree that strategy is about people. It is fundamentally about understanding your customers, setting a course and empowering your staff.

Generative AI creates opportunities to find new ways to better serve your customers. With the right lens and a little bit of training, generative AI can supercharge your research and product development. Generative AI can help you explore new strategic possibilities.

Generative AI can also supercharge staff productivity and engagement. The secret to using generative AI is not to ask, ‘what can AI do?’. Rather, it is about asking, ‘what can I do with AI?’

For example, working alongside generative AI, you can take your Excel skills to incredible new heights. Generative AI enables staff to be more efficient, more creative, and more engaged with work.

This is the real change. The real AI revolution will come from the ground up. As leaders you should ask two questions:

- How might AI enable our people to offer new or more value to our customers?
- How do we create a safe environment where that question can be explored?

Rather than racing to constrain AI usage or outsourcing AI to vendors, start with exploration and experiments. Set a policy that prevents people being foolish with private data, then encourage your teams to play with generative AI to work out how it adds value.

This takes time and is best done in a structured way, but once everyone is on the same page in terms of their AI literacy, you can have meaningful conversations about your strategy. What needs to change? And when?

Tom Hovey MInstD is the director of independent digital strategy consultancy Diagram.