Will Culture still eat Strategy in the Age of AI?

?When I started my marketing career there was a classic quip you would hear at least once a week:

“TV is the answer. Now…what was the question again?”

Season 2 and 3 of that same marketing show was framed by:

“The Web is the answer because we won't need that expensive retail store. Now…what was the question again?”

“Social Media and all this “Free” advertising is the answer. Now…what was the question again?”

?Season 4 of the same marketing show is off to an equally energetic start with the same feverish enthusiasm and excitement that marked the opening episodes of the previous 3 seasons.

“AI is the answer. Now…what was the question again?”

At the core of these quips were several common themes – and some dire misconceptions. Some of the same are already surfacing in the AI conversation we’re currently having.

A Panacea perception that is more gleeful optimism than pragmatic objectivity. This <insert Bright Shiny Object thing> was going to immediately change everything we’ve done for decades. If not sooner.

A liberal sprinkling of hype and hyperbole – typically from the very organizations that stood to most benefit from the universal application of the tech – and a woeful ignorance of the very insightful Amara’s Law

A deployment that always began with cost reductions – invariably headcount and humans – before it ever got to the real desired benefit of value creation. How many folks remember the pre-2000 corporate graveyard of “internet companies” that rose to media prominence but still failed to turn the web into a legitimate money-making part of their business? Karim Lakhani and Marco Iansiti’s book “Competing in the Age of AI” is definitely worth a read on this point.

A belief that all of the messy, complex and convoluted ways that society operates - and business in particular - would now miraculously be clean, orderly, logical and simple. FTR I’m still waiting for my paperless office and not having to spend several hundred dollars a month at Kinkos or Staples.

A failure to remember that this technology, like many that have preceded it such as desktops, mobile phones and email, is a tool wielded by a human, not an immediate and automatic replacement for that same human. At least not replacing us yet…says the deeply cynical AI conspiracy crowd. ?

For the record I’m bullish on this technology and its ability to reframe how we work and play.

This may yet be the technology that changes mankind forever. But, having heard that same proclamation in Season 1-3, I’m satisfied waiting a moment before jumping on the bandwagon. After all, I recollect that social media was going to be this transcendent societal moment because it was going to let us all peacefully co-mingle in one glorious digital Burning Man environment of connection.

What fascinates me most is how the inevitable deployment of AI and AI’s inevitable evolution is going to impact both the strategies of organizations – and the organizational cultures within those organizations.

Strategy AND Culture.

Or more pointedly….

WHAT we want to deliver to win in the marketplace – paraphrasing the brilliant Roger Martin.

HOW we’re able to deliver on that winning strategy by harnessing the full competency, creativity and capacity inside our organizations. And equally, inside the ecosystem of partners, collaborators and customers we have built.

Let’s be honest, the Strategy piece is still under construction. Certainly, the Strategy piece where we get to “value creation” not just “cost reduction”. Some naysayers question if we’ll ever create new business value from something that is currently a collection and curation of all that humanity’s done in the past and, subsequently, incapable of creating anything net-new. Fair point with GPT-4 perhaps…but just wait for GPT-5/6/7 say the optimists.

Those Strategies are coming – and coming fast – but for the moment many AI announcements are more PR-platitudes than deep demonstrable gains in performance. And we can already presume that not all industries, sectors and geographies will see the same "rising tide" gains as others. On the Pivot podcast, the wonderfully acerbic Scott Galloway has openly wondered if an AI-driven CPG firm will be as transformed as an AI-driven Insurance company or AI-driven Tech company. The jury is still out.

So if the WHAT of Strategy is evolving as fast as the TOPS and NPU metrics of Nvidia’s upcoming chip set, how about the other part of that classic equation?

The HOW.

The Culture.

Well, the Magic 8-Ball is even more murky and unclear on the Culture dimension. And make no mistake, that murkiness and lack of clarity is making the natives restless. I was recently reminded of just how restless attending an informal Culture Matters Zoom call with HR leaders from across North America.This wasn’t aimless, directionless Chicken Little “restlessness” either. It was a long and growing list of questions and concerns that these HR leaders were seeing and facing inside their organizations.

To paraphrase the discussion:

“I know we need an AI guidelines policy for the firm but I’m not entirely sure who, how or where AI is being used or even considered inside our company today.”

“Workforce planning is getting harder. Not only evaluating our current capacity and competency but the capacity and competency we’ll need a year from now. And don’t ask me if those will be FTE, contract, independent, in-office, remote, hybrid, near-shore or off-shore.”

“We want to do right (by our values) when we deploy AI but concerns about ethics, AI biases, hallucinations make that “right thing” evaluation difficult. Then there’s the additional compliance and evolving regulatory considerations I need to factor in.”

“Our people have a million questions about AI. Several are fearful for their jobs. The struggle is telling them exactly and consistently what we are doing with AI. It’s not always clear or straight-forward. That does nothing to alleviate their concerns. I know we’re gonna see that reflected in our next employee engagement results.” ?

Amid such accelerated change, exacerbated by a daily barrage of media articles, this mix of curiosity and anxiety isn’t a shock.

It’s actually a fantastic opportunity.

An opportunity to think differently about your people. I’m tired of organizations saying that Culture is a large amorphous element that takes forever to define and forever to galvanize. WRONG on both counts. There are numerous ways to understand the culture you currently have – and the culture you urgently need to thrive in this age. Like it or not, your culture has a vote on everything you’re trying to execute, especially something as significant as AI, so getting their vote should be your largest priority. Right after renegotiating your cloud contract with Microsoft, Oracle or AWS.

An opportunity to engage your people differently. In times like this, exerting control by doubling down on your hierarchy and mandates from the CEO becomes alluring and quite typical. Where that approach fails spectacularly – particularly when the personal stakes are so high and so emotional for your people – is it misses where the real influence and trust resides in your organization . It misses the real change makers, the real advocates, the people your employees really trust and the ones your employees seek out to make sense of what’s going on. There has never been a more critical need to find those people and bring them onboard. With employee anxiety on AI running so high, culture expert Stan Slap frames the problem beautifully – “you can’t sell it outside if you haven’t sold it inside first” ????

An opportunity to lead your people differently. For decades a legion of experts has been screaming that how we train, mould, promote, pay and nurture our leaders is dead wrong. Few as loud as my friend Paul McCarthy. And they’re right. In broad strokes leading today requires being comfortable and ok with paradoxes at every turn. Keeping analysts happy on your 90-day call while knowing nothing significant is ever delivered in that ridiculously short window. Having a bold vision but also being comfortable knowing that vision might fail gloriously as your sector evolves and morphs...especially if you're aiming to be the world's biggest AI-powered chocolate and candy manufacturer. Wanting to know everything and be the expert whilst understand that’s just your ego and having to accept others will inevitably know more, especially on THIS topic. Being a vocal, visible and vociferous communicator even when you’re not sure why you’re communicating so frequently. These behaviours aren’t leadership nice-to-haves anymore, they’re table stakes.

This moment in society and business is terrifying but it’s also exhilarating because, amidst the noise and confusion, there really is great opportunity. And I’m not just talking an opportunity to make boatloads of cash. I’m talking an opportunity to genuinely harness the full potential of AI to remove the soul-crushing mindless mundane bureaucracy of our organizations and really unleash the potential you already have stored there.

Spoiler alert – just like every other Season we’ve watched before – that potential and possibility lies in your humans, not in the latest technology. ???

#PeopleNOTPixels.

FTR…there is a legitimate fear that AI will enable deepfakes to spread mis- and disinformation with catastrophic outcomes for us all. Ironically the much-vaunted and oft-quoted phrase “Culture eats Strategy” was never actually uttered by the brilliant Peter Drucker . Ahhhh Humans.

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I'm a career marketer that believes that corporate culture is the most under-leveraged competitive advantage any organization has.

I'm delighted to partner with the amazing team at Innovisor and share stories and practical advice on how to address change, transform culture and unlock the real potential inside your organization - your people.

Pre-order our book here. It is coming out this Summer. ?