Open Strategy and AI

I would describe myself as a news junky. I check the New York Times, The Guardian, and Der Standard?(my favorite Austrian newspaper) several times each day and always find myself enthralled by something new. If a trend or idea really sparks my interest, I sometimes discuss it with my students and friends. On rare occasions, if the initial interest persists, I fully immerse myself in the hype surrounding something new.

This happened when ChatGPT started to dominate the headlines. I experimented, developed prompts, interviewed executives, and wrote several articles (mainly in collaboration with Martin Reeves from the BCG Henderson Institute).

A big reason why I was so excited was the connection to my work on open strategy. The core idea of open strategy is simple: engage with fresh voices to come up with unconventional propositions and improve implementation by involving those working on the operation front-end. AI can help with this. It's a new outside voice and it allows strategists to involve thousands of people in the conversation.

AI as a fresh voice in strategy making

One of my favourite open strategy techniques is a nightmare competitor workshop. I recently conducted one with a large European transport provider. The task is simple. Competing teams – often this includes people from outside the company – come up with imaginary competitors and develop detailed business models. The three winning ideas were a ride-sharing service that included trains, hyperloop transportation, and a smart-luggage delivery service.

I also asked ChatGPT to come up with a few nightmare competitor ideas. Among a list of five were the three winning ideas from the workshop. The tool was also able to provide business models and cost estimates for these business ideas.

My point here: genAI can be an external voice in your strategy making process. Staff will offer more details aligned with the industry reality and involving them will help with realising ideas but as a quick input ChatGPT is great.

One more suggestion: If you plan to embark on something new, ask ChatGPT for 3 reasons why this is a not a good idea and include examples from other industries where something similar did not work out. GenAI will turn into your advocatus diaboli.

AI as a connector

Your biggest strategy problem is typically a disconnect between the upper echelon and the rest. AI can help to overcome this. Three suggestions:

Social media: Most companies use internal social media platforms to stay in touch. But how can top leaders see through the maize? How can they avoid just seeing what they want to see? Topic modelling and other machine learning techniques can provide a robust digestion of large datasets, making the cognitive biases of executives less of an issue.

Strategy jams: IBM pioneered this technique akin to a large online conference where thousands can debate strategic issues in different streams. Moderators help to connect relevant ideas but to manage the large amount of comments, AI comes in handy once again. Once the event is finished AI tools once again help with the analysis.

Strategy dialogues: Let’s say you want to find out why your sales dropped by 10% last quarter and what you can do about this? CircleLytics, a Dutch company, came up with a smart way to engage large groups in this. In round one participants provide short answers. In round two AI curates 15 very different answers for each participants. Participants rate these answers and highlight words. Once again AI does some magic and finally shares the top and bottom five answers.

AI supported engagement does not mean corporate democracy

The power of AI can help executives to better listen to the organization and use genAI as a quick external voice. Decision making power still rests in the hands of top managers. So don’t overpromise. Open Strategy is a consultation process, not corporate democracy. It simply helps executives to set execution methods that are in-tune with what’s possible.