Anxious and Excited about AI Transformation? Providing Perspective to Executive Stakeholders

AI is the New 5-Alarm Fire Drill

Every few years, a technology wave comes along that changes how business is done and companies are forced to adapt and adopt with great urgency.

I remember in the mid 90s after Mosaic was released as the first mass adopted web browser, my friend who worked at Microsoft said that everyone was urgently corralled into theaters around Seattle for emergency all-hands meetings to figure out this new web thing. We are at the same level of 5 alarm panic across businesses and organizations of all sizes when it comes to AI and for good reason. No app has gotten to 100M users and beyond faster than ChatGPT by OpenAI. It will probably rival social media apps in terms of daily usage but unlike social media, users are leveraging AI in their professional lives first.

Perspective: Technology Transformation Happens in Multiple, Multi-Year Cycles

Breathe…This has happened before and will happen again with each new technology cycle. You still have time to respond and create opportunities for your organization. Technology goes in cycles and it can take at least 2-3 multi-year cycles for a new technology to become compelling and transformative to business.?

The diagram above represents key technology transformation cycles in recent decades. Depending on how you count and define AI, the present moment represents either the?second or third cycle of AI technology.

What is AI Transformation?

Let’s start with a basic definition of AI Transformation.?

AI Transformation occurs when an organization begins to use artificial intelligence (AI) tools to assist with various daily tasks with a goal to make the business more efficient, creative, and competitive.

AI Transformation, a subset of Digital Transformation, focuses on using artificial intelligence technologies to drive innovation and automation, whereas digital transformation incorporates a wide range of digital technologies to improve business operations and customer experiences. We will explore the relationship between AI Transformation and Digital Transformation in greater depth in this series.

Seeing AI Transformation With Different Executive Lenses

It’s helpful to remember that the same big waves of change make us both anxious and excited, often in direct proportion. Its further helpful to recognize the lenses with which various stakeholders view AI transformation

Unlike some of the other transformative technology waves, AI Transformation will not be as easy to ride as simply implementing a system or hiring an external agency to build mobile apps or manage social ads. AI Transformation will begin from the inside-out in organizations - it will impact and transform every major function across the leadership spectrum, including:

• Investors / Board of Directors (BOD)
• Chief Executive Officer (CEO)
• Chief Marketing Officer (CMO)
• Chief Product Officer (CPO)
• Chief Revenue Officer (CRO) / Sales
• Chief Technology Officer (CTO) / (CIO)
• Chief Operating Officer (COO)
• Chief Financial Officer (CFO)
• Chief Legal Officer / General Counsel (CLO) / (GC)

Let’s explore the different lenses that leadership in an organization might use to view AI Transformation.?

Investors / BOD Lens on AI Transformation

“Our new mandate is AI-First!”

Investors and the board of directors typically apply a macro lens to the company in context to its position in the marketplace.?

Anxious:

• Getting left behind by competitors who are quicker to adopt AI
• Financial costs required for AI Transformation
• Uncertain ROI

Excited:

• Possibility of greater profits?
• Increased competitive advantage?
• Long term growth potential (the key strategic platform for the next decade of growth)

CEO Lens on AI Transformation

“What got us here won’t get us there…AI may hold the key to our future”

Anxious:

• How do we modify our roadmap to keep up with the accelerating pace of AI?
• Every other technology transformation has been painful before it was fruitful
• Can the org handle the change? e.g. will reductions in staff be required?

Excited:

• AI can unlock incredible efficiency and streamline cumbersome processes
• Empowering employees with AI tools can boost productivity and decision making
• This could be a career-defining moment for the entire team

The CMO Lens on AI Transformation

“AI is a marketer’s dream and nightmare…will we sacrifice authenticity for targeting?”

Anxious:

• How to balance creativity with automation? Can we retain our brand’s voice?
• Danger in over-relying on data versus “gut feel” or customer feedback
• Will AI tools get bottlenecked by IT land tech debt ike everything else we try to do?

Excited:

• AI can provide better targeting and segmentation via non-obvious data relationships?
• AI tools can allow marketers to be be more self-sufficient without relying on IT?
• Better and more personalized content creation to tell a compelling brand story

CPO?Lens on AI Transformation

“Do we throw away our product roadmap now or integrate AI into it?”

Anxious:

• How do we not get lost in building AI for AI’s sake or lose our product north star?
• AI levels the product space for our competitors - how can we differentiate?
• Will our customers still need our products when they have self-serve AI tools in our general category?

Excited:

• When we evolve from AI *in* our product to AI *as* our product, we define and own a larger market
• AI can help us ship faster and reduce our time to market
• AI tools can help us prototype faster and design basic UX without bothering the dev team

CRO / Sales Lens on AI Transformation

“Our customers need the personal, human, touch. You can’t replace us with AI!”

Anxious:

• Is AI going to “move our cheese” - our revenue goals and KPIs?
• How to balance human interaction with AI-driven sales processes?
• What’s the best way to represent AI’s capabilities to our customers?

Excited:

• Better lead generation, lead scoring and qualification
• Free up time for the most valuable conversations with highest value customers?
• Improved sales forecasting and optimization

CTO/CIO?Lens on AI Transformation

“AI is shiny and new but we’re barely keeping the trains running!”

Anxious:

• IT is still trying to pay down all the tech and data debt from the last waves of new hotness (digital transformation, headless commerce, salesforce automation, ERP, CRM…)
• AI Transformation will require new staff we don’t have such as data scientists and engineers, model trainers and fine tuners etc.
• It’s hard enough pulling technical requirements from the business side. How are we going to develop new AI foundational models (FMs)?

Excited:

• AI is cutting edge and innovative
• AI has the potential to make employees more self-service and productive, reducing the?need for engineering resources for lower level tasks
• Evolving and upgrading team skills?

COO Lens on AI Transformation

“AI has the potential to radically align us or disastrously derail us”

Anxious:

• Whenever we’ve rolled out a new technology, the people and process components lag behind and we end up with unrealized headroom for the investment
• How do we operationalize AI - what is the “crawl, walk and run” plan?
• Where does AI Transformation fit in with our current initiatives and KPIs?

Excited:

• AI can unlock incredible efficiency and streamline repetitive processes
• AI can help us tame and manage our supply chain and shorten the product development life cycle
• AI can help proactively manage uptime, quality, production, inventory, service and maintenance

CFO / Sales Lens on AI Transformation

“When I hear AI Transformation I see $$$$ - how much is this going to cost, how and when do we recoup that ROI?”

Anxious:

• Potentially high initial investment costs “heavy lift”?- both capex and opex
• With unclear ROI, scope and ways to constrain scope?
• High learning curve for AI financial planning tools and associated training costs and staffing / job displacement?

Excited:

• AI can unlock more accurate and dynamic financial forecasting?
• Ability to streamline budgeting and resource allocation?
• Improved cost efficiency?

CLO/GC Lens on AI Transformation

“AI could send us down an IP risk rabbit hole we can’t see the bottom of”

Anxious:

• How do we protect our intellectual property?and make sure we don’t violate other companies’ IP?
• Who owns the outputs we produce with AI? How does attribution work? Contracts?
• Will AI bias open the company up to other potential liabilities? Ethical concerns can quickly turn into legal risk e.g. equity, privacy, compliance etc.

Excited:

• Enhanced legal research capabilities via ability to crunch large amounts of information quickly?
• Better contract management - streamlining drafting, review and negotiation with fewer human errors
• AI can assist in litigation management e.g. e-discovery, case and document management and review?

Have No Fear: AI-Transformation is an Opportunity

Like the internet, mobile, social and other technology waves, AI isn’t going away anytime soon now that it’s here and finally good. While five-alarm fire drills typically tend to make leadership teams more anxious than excited, it’s worthwhile harnessing the sense of urgency of the moment to have a real conversation between all executive stakeholders about AI Transformation. Realizing that everyone at the table is both anxious and excited can help leaders move beyond their respective anxieties to empathize, unite and focus on the vast opportunities that AI unlocks. Expand the conversation - customers, suppliers and partners are likely anxious and excited about AI Transformation too. Who knows, maybe helping external stakeholders find their way in a post-AI world can illuminate your path too via new solutions to their jobs to be done?

About Me:

I am the founder of Paragon Tech - we provide CTO/CPO advisory to leading PE/VC funds and companies navigating AI Transformation. I also co-founded Labthree which is innovating products in AI commerce attribution other B2B applications of AI. I teach applied AI/ML part time at institutions such as UCLA to keep the saw sharp and inspire the next cohort of business leaders. My DMs are open if you’d like to say hi. You can schedule time during my office hours via this link:

https://calendly.com/paragontech/ai-transformation-office-hours