Building a Generative AI Strategy for Business
Rafael Igual
Business Design | Innovation Strategy | Venture Building |?Ecosystem Development | Corporate Transformation | Exponential Technologies |?Startup | Scaleup | Venture Capital
Actionable guide for busy Executives, Innovators, Product Managers and Entrepreneurs
Building new products,services or business models with Generative Artificial Intelligence (Gen AI) will separate winners from losers over the next five years. I’ve seen it before – first with the advent of the Web 1.0 in 1993, then with native Mobile Apps and Cloud/API-based Apps in the 2010s. These massive technology shifts catch incumbents flat-footed.
The emergence of Gen AI promises to fundamentally reshape and disrupt nearly every aspect of business. As covered in my Substack's previous article (What every Executive, Innovator & Entrepreneur needs to know about Generative AI ), this technology can automate tasks, create content, and analyse data at unbelievable speeds. Early adopters are already seeing massive value.
However, most companieslack a strategic plan for adopting Gen AI. They are piloting isolated use cases and realising pockets of value but missing the bigger picture. This fails to leverage this revolutionary technology’s full potential. To fully harness Gen AI, organisations need a deliberate strategy that coordinates efforts across departments for maximum impact. Having a sound Gen AI Strategy is crucial for competing in the era of business this technology is enabling. With proper planning, organisations can migrate thoughtfully amid workforce changes, manage risks, and realise the full value capture potential.
According to McKinsey Research, Gen AI could add $3-5 trillion annually across global economies if strategies are executed properly. Companies who drag their heels could quickly find themselves at a disadvantage, as highlighted in a recent HBR’s podcast interview, the incredible velocity of change and palpable excitement around this technology also underscores the need for leaders to act quickly but thoroughly.
Take it from me (a 50yrs old guy): If you don’t harness Gen AI for your business now (and push through the frustration when it doesn’t work immediately), you will fall behind.
But not everybusiness should adopt AI in the same way. Some are ready to enter a new way of build new products; others should be focused on automating / optimizing repetitive tasks and lowering costs. Your AI journey starts with assessing where you are, and where Gen AI can help.
So let’s get started ?? .
Building a Generative AI Strategy
This post will provide guidance on building a winning Gen AI Strategy tailored to your organisation's strengths and needs. We will cover assessing opportunity areas, plotting an adoption roadmap, enabling responsible governance, building capabilities while minimising risks, and tracking progress through metrics.
With a strategic approach, companies can transform their competitiveness through Gen AI’s incredible abilities to boost efficiency, empower employees, and unlock growth. But strategy without execution is worthless - proactive leadership and collaboration across teams will be key.
By taking the time to construct a robust strategy, companies can realise massive value while safely navigating risks and change. With compelling Gen AI Use Cases materialising daily across sectors, the time to define your Gen AI Strategy is now. Read on to begin mapping out this vital component for competing in the era of Gen AI.
Why a Generative AI Strategy Matters?
Adopting new technologywithout a well-defined strategy often leads to limited success and wasted resources. With Gen AI’s massive potential, organisations cannot afford this misstep. With a high cost of adoption, it is imperative to focus on the highest-value use cases where benefits outweigh expenses. Gen AI also introduces new vulnerabilities that proactive governance must address to maintain quality and manage risks. Hence, crafting a comprehensive strategic plan is essential to fully capture value, move confidently amid competition, support workers through changes, and manage risks.
1?? Realising Massive Value Potential
As mentioned in the introduction, Gen AI could add trillions of dollars annually across the global economy by transforming tasks in areas like marketing, software engineering, customer service and more. But this requires coordination. Without an overarching strategy, use cases end up siloed in individual teams or functions. Impact is scattered and diluted.
A Gen AI customer service chatbot pilot in the marketing department will not transform support operations company-wide. But a strategy could introduce virtual assistants across regions and channels, linking them to a knowledge base that centralises data and learnings. This amplifies usage and value.
According to McKinsey Research, key areas like marketing, software development, customer service, and content creation represent ~75% of the total value potential from Gen AI. Strategies should identify enterprise-wide priorities in high-potential spaces like these.
With aligned, coordinated efforts, companies can compound value exponentially through synergies. For instance, a unified Gen AI strategy could transform customer service, marketing, and engineering. Virtual assistants and chatbots improve support and satisfaction. AI-powered marketing content boosts conversion rates. Faster coding accelerates release velocity. Together these create a major competitive differentiator.
2?? Competing New Era of Business
Today’s leading companies are moving quickly to build Gen AI capabilities. Laggards risk rapidly falling behind as the technology becomes table stakes in their industries. Crafting a strategy now is vital to compete.
For example, AI-powered chatbots are revolutionising customer service with instant, personalised support at scale. This is becoming expected, especially by digitally native consumers. An inability to offer similar responsive interactions via chat could quickly turn off customers.
Leaders across sectors like retail, banking, and manufacturing are building strategies to make Gen AI integral to their business. Lacking a plan cedes pole position to rivals and risks obsolescence.
3?? Migrating Thoughtfully Amid Workforce Changes
While widespread job loss is not inevitable, Gen AI will substantially transform roles and required skills across workforces. This necessitates strategic planning to smoothly migrate workers rather than reacting to disruption retroactively.
For instance, as Gen AI takes on repetitive tasks, employees can redirect their time to higher-value strategic work. But this requires extensive planning for change management, training, upskilling, and organisational transformation.
Retraining, upskilling, and embedding at scale must be priorities. Workforces will also need to become even more digitally adept as Human-AI collaboration increases. Strategic workforce planning and modernisation of Learning & Development programs will be crucial.
4?? Managing AIs Risks Proactively
Despite the hype, Gen AI carries risks like biased or misleading outputs, security vulnerabilities, misinformation, and over-automation. Strategies allow organisations to install oversight, monitoring, and controls pre-emptively rather than reactively.
For example, Gen AI chatbots seem extremely capable of accomplishing tasks independently. But they lack human judgment. Strategies should define where “humans in the loop” oversight is mandatory versus where bots can self-operate within set boundaries.
Comprehensive long-term strategies enable organisations to capture the full value potential from Gen AI in a coordinated way, maintain competitive parity, thoughtfully evolve their workforces, and manage risks pre-emptively.
How to build your Generative AI Strategy (building blocks)
With an understandingof why an intentional strategy is vital, let us explore how to construct a Gen AI strategic plan tailored to your organisation. This process involves assessing opportunity areas, charting an adoption roadmap, enabling responsible governance, building capabilities while minimising risks, and defining progress metrics.
?? Opportunity Assessment
The first step is identifying where Gen AI could drive value in your organisation. Map the use cases with the highest potential based on your key priorities, strengths, and pain points.
Gather cross-functional teams to ideate possibilities across units like marketing, R&D, customer service, and IT. Compile a list of potential value drivers, such as creating personalised ads, accelerating coding, or analysing customer data.
Then prioritise opportunities using criteria like value potential, time to value realisation, implementation complexity, and availability of foundational assets like data and technical infrastructure. Focus initially on quick wins where Gen AI can solve pressing problems.
?? Adoption Roadmap
With opportunity areas identified, chart a phased rollout plan across the enterprise. This roadmap should align to strategic priorities and manage risks.
The roadmap should also designate for each pilot the decision point for whether to expand, modify, or abandon based on measured impact. If a chatbot delivers fragmented value, keep iterating before deploying companywide.
I recommend taking an agile approach – deploying pilots, refining them through feedback, and scaling iteratively. Moving too slowly relinquishes value, but moving recklessly heightens risks. Find the right cadence through strategic road mapping.
???? Responsible Governance
Any Gen AI strategy must incorporate responsible governance to manage risks and align outputs to corporate values. Governance spans model development, monitoring systems, and protocols guiding human oversight.
For instance, if Gen AI will create customer communications, governance systems need safeguards against producing biased, illegal, or harmful content. Human oversight and approval workflows should be incorporated into the rollout plan.
?? Capabilities and Risks
Constructing your strategy will also surface capability gaps to address across technology, processes, and skills. Key areas to invest in include data management, AI/MLOps engineering, change management, performance metrics, and risk control.
Clean, well-organised data is the lifeblood of effective Gen AI. Dedicated data teams can architect pipelines and quality assurance processes. Data essentials like ethics and compliance safeguards also need development.
Change management resources ensure workers are supported throughout Gen AI integrations. Similarly, performance management processes should be enhanced to track impact and guide decision making at each stage and guide data-driven decisions on scaling pilots.
?? Pilot Metrics and Tracking
Lastly, sound Gen AI strategies require tracking mechanisms. Key performance indicators like agent call time, sales conversion rates, or release frequency provide visibility into progress toward intended goals.
Effective tracking depends on investing up front in analytics instrumentation and clear accountability. Business leaders should agree on a scorecard for monitoring key pilot metrics and strategic objectives.
By maintaining line of sight into outcomes, organisations can refine strategies and double down on successes. Progress measurement ensures you are strategically leveraging Gen AI’s potential, not squandering it.
In summary, buildinga Gen AI Strategy involves assessment, planning, governance, capability building, and tracking mechanisms. With these foundational pillars in place, organisations can unlock this technology’s tremendous potential with strategic intentionality for innovation, growth and operational efficiency.
The Five Generative AI Use Cases
There are five use cases where Gen AI can make the most significant impact in your business.
1. Text, Code, Image, or Video Generation.
This means drafting email copy, blog posts, product pages, code, etc., using tools like Jasper, Copy.ai , Adobe Firefly, Midjourney, Runway ML, etc.
2. Text, Image, Video, Data Synthesis or Processing.
This means using Gen AI to process a large amount of content or data and spit out insights. This is being used to do things like detect fraud, moderate content, and summarize product reviews (see Google / Amazon’s new AI features).
领英推荐
3. Idea Generation.
This is using Gen AI to act as a thought coach or mentor. You say, “Come up with ten ideas for a social media campaign on eco-friendly waste disposal,” AI provides them, and you go back and forth. TripAdvisor has leveraged this to provide vacation ideas.
4. Agents or Co-pilots.
You can use Gen AI as a personal or functional assistant, to manage your calendar, act as a Account Sales / BDR, or plug into tools like Office 365 or Google Sheets.
5. Conversational Chatbots.
Customer service companiesare already using Gen AI to act as chatbots, tutors, therapists, and coaches.
At the moment, Gen AI still has some weaknesses because it was trained on humans. It hallucinates (aka lies), it has biases, and it’s only as good as the data it’s trained on. And because it sounds like it knows what it’s talking about, it can be easy to take its misinformation at face value. But while it has weaknesses, the foundational model companies are solving these issues as quickly as they can.
The Generative AI Strategy Framework: Optimize, Accelerate, or Scale
There are threeways that you and your business will likely use Gen AI:
But what you’lldo depends a lot on the state and mindset of your business. Here are three modes to help you understand how you should use Gen AI at work right now:
Optimize (5x ROI)
Use Gen AI to make your internal operation efforts more efficient.
Accelerate (10x ROI)
Use Gen AI to make your existing product, service or process better.
Scale (100x ROI)
Use Gen AI to create a new product, service or business model.
How to identify the right Generative AI approach for your Business, Project or Startup
The right Gen AI approach for your business, team or startup depends on a number of factors – from organizational buy-in to define project spec & planning. I’ve developed the Applied AI Innovation & Growth Framework to help you assess your readiness to leverage Gen AI. Go through this framework to assess your current situation.
Scoring system
Low = 1 point
Medium = 2 points
High = 3 points
Total score
0-7: Optimize
8-16: Optimize and/or Accelerate
17-21: All three: Optimize, Accelerate, and Scale
You can usedthis framework to assess your business and determined we should be focused onoptimizationand/oracceleration–not scale,quite yet.
If you’re on the bubble (scoring 5 or 6, or 13 or 14), go and do some more research. The data may move your scores up or down.
Conclusion (takeaways)
The era of Gen AI promises to fundamentally reshape nearly every aspect of business. However, simply piloting disparate use cases will amount to a missed opportunity. To fully harness Gen AI’s potential, organisations need a deliberate strategy that coordinates efforts for maximum impact.
With a robust strategic plan, companies can systematically identify the highest-value opportunities across units, coordinate adoption to compound value exponentially, implement responsible governance, develop technical capabilities, and diligently track progress. This enables holistically transforming end-to-end operations with Gen AI to gain a true competitive advantage.
But realising this requires proactive leadership commitment to steer implementation. Executives, Innovators, Product Managers and Entrepreneurs must provide the necessary resources and communications to enable adoption. For instance, they may need to increase L&D budgets to re-upskill workers for new digitally-driven processes. And change management is imperative to support employees in embracing AI-assisted workflows.
Cross-functional collaboration is also essential to ensure pilots align to the overarching strategy. If marketing is using Gen AI in isolation, it dilutes potential. But if integrated with company-wide priorities, it becomes a strategic building block.
The message for Executives, Innovators, Product Managers and Entrepreneurs is unambiguous: The Gen AI train is leaving the station.
Leaders must make a choice. Craft your playbook for strategic adoption now or risk being left behind. With compelling Gen AI use cases materialising daily across sectors, leaders must move swiftly before rivals gain advantage. Pair urgency with a pragmatic framework, and Gen AI can propel your organisation into the future.
What’s Next? your turn…
After you identifythe right strategic approach to Gen AI superpowers, I’ve an Applied AI Innovation & Growth Framework to take you through: AI Operating Mode(s) to pursue, define AI Strategy, identify AI Use Cases, prioritize AI Projects, get buy-in AI Project Memo, and build AI Project Spec & Planning.
Stay tuned for my next post… or join me to do this exercise at my Generative AI for Business Sprint .
Remember, there will be three types of companies:
My hope for you: To use this framework to make a clear, confident recommendation for your business. Let me know if it’s useful… and I’ll see you in at my Generative AI for Business Sprint.
ABOUT ME:
I’m a Fractional AI Strategist, Coach, Advisor & Investor helping executive leaders , innovators and product teams & startups get AI enterprise-ready. I provide AI Strategy, Upskilling and Governance to Corporates, SMEs, Startups & Investors/VCs across the Latam region. Want to dive deeper into the AI Strategy, Upskilling & Governance for your business challenges, innovation process or product management?.
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