As the internet became mainstream at the end of the last century, many once-prominent businesses suffered because they failed to adapt.
AI will, in my opinion, have far greater revolutionary effects on society and industry. Nevertheless, working with businesses of all sizes, I observe that many of them are still ill-prepared for the impending changes.
The primary issue I have is that the leadership is unprepared for a revolution that has already begun.
The rapid advancement of AI has been astounding, especially with the most recent generative AI tools and massive language models. In cases where businesses have adjusted, it has frequently involved “bolting on” a chatbot. It’s difficult to find a software platform that hasn’t hurriedly added natural language support, from Windows to the iPhone.
But this, in my view, doesn’t even come close to utilizing all of the options available. Indeed, I am struck, virtually every day, by the disparity between leaders’ perceptions of the magnitude of the change that artificial intelligence will bring about and its potential.
It’s frequently only seen as a novel method of communicating with computers—giving commands verbally as opposed to through the use of codes or icon clicks.
I’d venture to say that even the biggest tech companies, like Google or Amazon, have been taken off guard. Indeed, both have created chatbots and incorporated them in various ways into their services. Have they, however, fully realized the potential of AI to fundamentally alter the way that people search and shop online?
They used this strategy to create empires in the early days of the internet, but I contend that they haven’t yet been able to use AI to achieve the same revolutionary effects. They’ve left the doors open for others who most likely would have done so by not doing so.
What then is preventing them? Is it a matter of not thinking broadly enough or of a strategic misalignment? And what obstacles need to be cleared before their companies turn into the next Borders, Kodak, or Blockbuster?
According to my observations, one of the major mistakes made by leaders is to view AI as just another tool to aid in their current tasks rather than completely changing what they do.
Let’s revisit the internet as an example. Businesses were able to engage with clients in new ways through websites and email when they went online. It completely changed the marketing landscape, paving the way for modern AI-powered, tailored, and targeted marketing efforts as well as pay-per-click advertising and search engine optimization.
Although it wasn’t the first company to allow users to search the internet using a web page index, Google figured out how to make this feature profitable by employing Adwords and purchasing search placement.
Similarly, while Amazon wasn’t the first online store, it revolutionized retail by introducing personalized recommendations, next-day delivery infrastructure, and an online marketplace, transforming the industry from the ground up.
Strangely enough, one of the well-established digital business models that artificial intelligence is most likely to upend initially is internet search. By giving users concise, clear replies in simple language, ChatGPT and other large language models (LLMs) like Anthropic’s Claude can lessen the need for users to sift through pages of results in search of the information they require.
Indeed, just as Microsoft did with OpenAI’s GPT-4 and its Bing search engine, Google is already integrating its chatbot, Gemini, into Google Search. But rather than starting from scratch with a new perspective on information services, isn’t this just another instance of “bolting on” a new tool?
I believe that businesses are failing to consider the full range of available opportunities. Businesses that want to enhance experience or efficiency across a narrow subset of attributes are frequently observed doing small-scale tests or restricted use cases.
There are some exemplary cases available. Speaking with a top executive at Boston Consulting Group recently, I learned that all of their consultants now have access to generative tools, which enable them to tackle problems that would have taken two weeks to solve in two days.
But what I want to see is more leaders with even more expansive ideas. We should be imagining how it may be utilized to completely revolutionize industry dynamics, customer experiences, and business models, rather than just considering how it could be used for specific procedures.