How Companies Can Adopt AI

Hi, I am Carlos Valdez, Founder and Director of Marketing and Sales. The title of this week’s video and audio blog for Friday, July 12, 2024, is "How Companies Can Adopt AI." The text goes as follows:

Artificial intelligence (AI) is transforming everything, and businesses are no exception. Companies must think quickly and strategically about how they will incorporate AI to become more efficient and effective.

In an article by Ray A. Smith in the Wall Street Journal, published on June 24, 2024, titled "No One Wants to Sound Clueless About AI. Especially Your Boss," it is mentioned how executives are grappling with the increasing importance of AI in the business realm. Many executives, including CEOs, are learning about AI to avoid appearing uninformed in the face of the rapid adoption of technologies like ChatGPT and other AI solutions.

The article mentions that a recent survey revealed that 61% of senior executives view AI as a "game-changer," although many admit to having little confidence in their leadership skills in AI. The rapid evolution of AI has generated uncertainty and a lack of confidence among business leaders. Another survey by Korn Ferry highlighted that 71% of CEOs and two-thirds of other senior leaders experience "impostor syndrome" in relation to AI.

Learning about AI is happening at the individual employee level rather than being driven by senior management. Employees are experimenting with AI tools on their own, sometimes faster than companies can implement customized applications of the technology. To leverage the strategic potential of AI, deep collaboration and alignment across the executive suite are essential. This implies that business leaders must work closely with IT teams and other departments to effectively integrate AI into the business strategy.

The consulting firm McKinsey, in their book "Rewired," outlines six key elements for digital and AI transformation in companies:

1. Development Process: Digital and AI transformation is described as a continuous and planned process, not a one-time event.
2. Organizational and Technological Capabilities: Transformation involves developing capabilities based on organization and technology. This suggests that both internal structures and technological tools must evolve.
3. Continuous Improvement: Companies should be in a constant state of evaluation and optimization of their processes and technologies.
4. Customer Experience and Cost Reduction: Two main goals of digital and AI transformation are improving customer experience and reducing unit costs.
5. Sustainable Competitive Advantage: In the long term, digital and AI transformation should enable the company to maintain a competitive advantage. This implies that the company not only improves in the short term but also establishes a foundation for continued success in the future.
6. CEO and Executive Team Leadership: The process should be led by the CEO and the executive team. This indicates that commitment and direction must come from the highest level of the company.

In summary, digital and AI transformation is a comprehensive process that encompasses continuous organizational and technological improvements, aiming to enhance customer experience and reduce costs, led by senior executives, and designed to maintain a sustainable competitive advantage.

To conclude, I want to mention another Wall Street Journal article by Belle Lin titled "AI Puts CIOs in the Spotlight, Right Next to the CEO." This article discusses how AI has placed CIOs (Chief Information Officers) in a prominent position within companies, reporting directly to the CEOs. A Deloitte survey reveals that approximately 63% of US technology leaders now report directly to their CEOs, a record high driven by the growing importance of AI. This shift reflects how technology and digitalization have become critical elements of business strategy.

If I were the CEO of a large company or a senior executive, I would buy my copy of "Rewired" and a copy for all my senior executives, especially the CIO. I would assign them the task of reading it in a week and hold several meetings to strategically and quickly plan the adoption of AI. Remember that this will be a constant, never-ending process; that is the name of the game with AI.

I leave you with a reminder that in marketing and sales, we always have to generate value.

Thank you, and see you next time.

References:

Smith, R. A. (2024, June 24). No one wants to sound clueless about AI. Especially your boss. The Wall Street Journal.

Lamarre, E., Smaje, K., & Zemmel, R. W. (2023). Rewired: A manual for digital transformations that work. McKinsey & Company. Retrieved from McKinsey.

Lin, B. (2024, June 12). AI puts CIOs in the spotlight, right next to the CEO. The Wall Street Journal.