It is almost three years since ChatGPT debuted and redefined how we experience artificial intelligence. A technology coming into its own, AI is clearly poised for greatness. There is much to marvel at.
But its potential is throwing business strategy out of balance, as the C-suite seeks to reconcile business as usual to what business could be. And that is causing some tension. A recent IBM study found that 64% of CEOs, from fear of falling behind, invest in some technologies before they have a clear understanding of them.
Strategic elements need to converge for the benefits of AI to be realised
The risk of missing out on the AI race is prompting many leaders to pursue an ‘invest and hope’ strategy, with no clear sense of what to expect. But AI needs to be properly understood if it is going to be more than just a gamble. Leadership needs to understand the value it could unlock – not just cost savings, but productivity gains, customer experience and new growth avenues.
Most organisations will not launch their AI campaigns with big-picture and blue-sky thinking. Understandably, they will start with the more obvious applications that can be rolled out in a controlled, low-stakes environment. This creates room for organisational learnings around specifics such as which AI technologies create the most impact, whether or not to build capabilities in-house or to outsource, who needs to upskill and what they need to learn, and which teams need to collaborate and exchange notes.
Exemplary rollout
One example of the challenge – and the solution – is showcased in ACCA’s Smart alliance report. UK holiday park operator Parkdean Resorts implemented an AI solution to streamline the analysis and categorisation of its repairs and maintenance costs. After choosing machine learning as the most suitable AI technology, the Parkdean team decided on the algorithm best suited to the desired outcome. A test release allowed the finance team to fine-tune the AI iteratively for improved results, ahead of a wider rollout.
Importantly, the implementation process involved close collaboration between the finance team, data scientists and operational stakeholders. The results included improved efficiency in categorising lines of repairs and maintenance spend, saving two to three days of manual work each month. It also created better oversight of the expense through a dashboard that is updated daily, whereas previous reports were monthly.
The Parkdean case study illustrates some of the strategic elements that need to converge for the benefits of AI to be realised: cross-functional collaboration, technology fit and the need for continuous improvement. Winning with AI is not just about the technology; it critically depends on broader factors, including an enabling culture.
Crucial culture
‘As at most businesses that aren’t born digital, traditional mindsets and ways of working run counter to those needed for AI,’ say the experts in ‘Building the AI-Powered Organization’ published in Harvard Business Review.
Business leaders have to understand the need to be agile, adapting to the times. Agility often goes against established norms including work patterns, processes and even performance structures, all of which form part of an organisation’s culture. Yet it is crucial for reinventing businesses and organisations from the inside out.
‘AI is 99% practice and 1% theory’
To ride the AI wave, leaders may need to pivot – for example, unlearning trusted formulas for success, and engendering a level of intellectual sparring that fosters innovation. According to Christina Larkin, Oceania digital assurance leader at EY, organisations that have experienced success with deploying AI at scale have been the ones that have provided employees with a ‘safe space’ to innovate.
‘They set the guardrails – the safe boundaries by which employees can innovate within, then encourage and incentivise their people to come forward with ideas,’ she says. ‘Ideas are quickly assessed for feasibility and, importantly, those who contribute are given the opportunity to be part of bringing that idea to life.’
John Collins, founder of Deep Vertical AI and former director of AI and data analytics at HSBC, emphasises the need for changing mindsets (and quickly), but acknowledges this will take courage. He advocates a pragmatic, hands-on approach to AI adoption in organisations. ‘I think AI is 99% practice and 1% theory,’ he says.
The specific changes needed to remain competitive by using AI will differ according to each organisation’s priorities. What we do know is that leaders will need to champion those changes, have the courage to act decisively and with humanity, and earn and build trust. All these factors play into how effectively leaders can navigate the uncertainty of AI and thrive in spite of it.
More information
Find ACCA’s resources on AI, including the half-day webinar ‘Landing the AI opportunity’ (free CPD units available) and others in our back catalogue
