ChatGPT: The Underestimated Strategic Risk of Mediocrity and Irrelevance

It’s a threat that can affect any business that is at least partially based on data – and which one isn’t?

The latest artificial intelligence technologies have the potential to transform many parts of the economy. Entrepreneurs, investors, strategists, and consultants who favor these technologies for their businesses sometimes seem to fall into a frenzy of enthusiasm, neglecting existing limitations and side effects. Herein lies a strategic risk arising from the benefits of AI: the systematic creation of mediocrity. We should take the quite high potential of AI with a grain of salt.

Recent discussions show that Large Language Models (LLMs) seem to be the next big thing. Experts predict a vast future potential. I myself joined the line of advocates with an article in 2021.

LLMs may well turn into a corporate battle, like the one between Apple and Microsoft in the 1980s. In November 2022, OpenAI launched the latest version of GPT 3.5 and the well-known extension ChatGPT. On January 23, 2023, Microsoft affirmed the importance of this technology by investing $10 billion as part of an extended partnership with OpenAI. On February 09, 2023, Google launched Bard, a competing chat AI.

It is unlikely that you never heard about ChatGPT. Its capabilities are fascinating:?chat like a natural human, write entire articles and blog posts, optimize them for search engines, tell jokes, pass medical and law exams, translate texts and create working software. Another OpenAI product, DALL-E, can even create stunning images when just a simple sentence is given, like “a Picasso-like painting with a computer that ejects money”. This is the result:

Impressive, isn’t it?

Believe me, we are still at the beginning of the AI revolution. It may not feel like this, but in a few years you will notice.

In a nutshell, this means that business owners, strategists, and consultants must at least watch the evolution of AI (especially Large Language Models) and be aware of which technology and application might offer an excellent opportunity for their business.

A robust strategy requires the consideration of risks

Any technology comes with downsides, risks, and side effects. ChatGPTs output is impressive, but it still lacks transparency and is often incomplete, incorrect, or biased. Under a strategic perspective, they can lead to serious mistakes:

• the information a decision is based on may be outdated because the training data of the AI is not up-to-date
• creator’s rights might be neglected due to plagiarism
• generated texts or software may lead to legal or regulatory conflicts

Nevertheless, not taking AI into account for future development might still be the biggest mistake. This technology will transform entire businesses, and the longer you wait, the harder it will be to keep up. These 4 factors drive the evolution:

1. Quality: content creation in any sense will reach a new level of quality. It has never been easier for creators to draw on a large amount of information.

2. Speed: LLMs create content in seconds. Human effort will be limited to revising text or code. Effort will even decrease as systems evolve.

3. Cost Saving: even if you use paid AI-assisted content creation services, the cost will be far less than that of skilled staff.

4. Quantity: LLMs make content creation easy, and they are superfast at producing high-quality content. People will use them more and more, and we will see a real content explosion.

How can this lead to mediocrity?

If development proceeds as described, mediocrity will be inevitable, and it will affect the entire creator industry — software development and digital services included. Three factors are at play: adaptation, mass production, and the limitations of the systems themselves.

This can best be illustrated by the example of copywriting. As with many other things in life, we can assume a bell curve for the quality of writing. At the lower end, there are some terribly boring writers, the majority manages quite acceptable or even good writing, and at the higher end, there are a few outstanding writers who can really thrill you.

How do LLMs like ChatGPT change the scene? At least until now, they cannot beat the few great authors. But (sometimes) they can be just as good as the good ones. And soon, good writing will be their standard output. If you are a poor or even acceptable writer, what will you do? Sure, you will adapt at least partially to using AI for your articles and blogs. This will push the curve clearly to the right.

The more people and companies adopt these technologies, a mass of good (!) AI-generated content will additionally inflate the right part of the curve.

Regarding the upper end, a limiting factor will remain, at least for some years. All Large Language Models are trained on openly accessible data, mostly from the internet. Consequences are always slightly outdated and biased data. Even more important is that these systems cannot be really creative. Innovation is limited to recombination of existing information. That can lead to interesting results, but not to entirely new ideas.

If you're now saying, well, I'm not a copywriter, you're still not on safe ground.

Any business that relies on the creation, management, or distribution of information (including software!) will be affected and must prepare strategically.

Several impacts can be predicted:

1. Content explodes, rendering a lot of it worthless.
2. The quality of mass-generated content will challenge creators to keep up.
3. They will have to dramatically improve their personal skills – or adapt to AI-assisted creation.
4. Due to increasingly similar results, a narrow tunnel of acceptable quality will emerge.
5. But there is a positive message for the few really excellent human creators. They will be the only ones who stand out, and they will be highly valued by both, customers and search engines.

How to adapt strategy to AI and its risks

Although I have just cast a critical eye on the side effects of AI, I would still like to emphasize that for corporate strategists there is no way around AI and LLMs. Business development, innovation, product, and service management should be rigorously reviewed to see how AI can help gain strategic advantages. Otherwise, you will quickly end up on the irrelevant left side of the curve.

But you shouldn't stop when you reach the pile of mediocrity. Then you're just as good as your competitors, and it's only a matter of time before you're surpassed. Mediocrity leads to disaster, not just in copywriting, but in any other task or activity that can be automated thanks to AI.

Entrepreneurs, investors, and strategists should always keep in mind that there will still be a lack of fresh ideas, insights, and innovations if you rely on AI only. Real advantages require both, the new opportunities AL brings along in close collaboration with creative people. You can check:

• Will AI play a major role in our industry?
• Do we already have a clear AI-strategy?
• How advanced is the implementation of AI?
• What do our competitors do regarding AI?
• How can we circumvent the risks of AI (technically, legally, and socially)?

Specific means to prevent mediocrity can be:

• a professional invention and innovation process
• user-centric development and strategy that is based on value creation, user experience design and extensive user testing
• highly skilled and creative people
• an innovation and failure friendly corporate culture
• appropriate AI tools that support people, rather than replace them

Future perspectives

Innovation and strategy will remain a human domain, and a good innovation strategy will still make a difference and create economic advantages. Neither in 2023 nor in the following years, will AI replace smart people.

In any case, AI should be considered an essential part of any strategy. We are at the beginning of a massive transformation in many industries. The advantages and risks of AI should clearly be considered. But beware of the crowd. Don’t follow a trend just because it’s a trend. Analyze carefully. Risks can arise even from the benefits a technology creates.

No entrepreneur, investor, or strategist will settle for a game of mediocrity. Strive for the extraordinary!

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Disclaimer

This article was NOT written by or with the help of AI, but two images were created by DALL-E as examples, and they are clearly marked.