AI has moved firmly from being a technology conversation to a boardroom priority. That should be a good thing. But it is creating an interesting strategic challenge: some organisations are starting with their business strategy and asking where AI can help deliver it, while others seem to be starting with AI and trying to build a business strategy around it.
Those two approaches can look remarkably similar from the outside. Both might involve investment in AI, new leadership roles, experimentation with emerging technology and ambitious transformation programmes. But strategically, they are fundamentally different.
When did “doing AI” become the objective?
There is enormous pressure on organisations to demonstrate that they are doing something meaningful with AI. Customers are asking about it, investors want to understand it, employees are experimenting with it, and competitors are announcing new AI capabilities. Nobody wants to appear as though they are being left behind.
The danger is that this pressure can gradually turn AI adoption into an objective in its own right.
Organisations increasingly talk about becoming “AI-first” or “AI-native”, but there is a fundamental question that needs to come before that: AI-first for what?
A business might be trying to increase customer retention, reduce operating costs, launch products faster, improve conversion, increase employee productivity or create entirely new revenue streams. Those are meaningful business objectives, and AI could be an incredibly powerful way of achieving some of them. However, AI Adoption is not a business outcome in itself.
Strategy should lead technology, not follow it
This is where I think there is an important distinction between businesses leading AI and businesses being led by AI.
A business leading AI starts with its objectives. What are we trying to achieve? Where are the biggest constraints in the organisation? Where can we create the greatest competitive advantage? Where could technology materially change the economics, experience or scalability of the business?
AI then becomes part of the conversation about how those objectives can be achieved.
A business being led by AI does almost the reverse. It starts with what the technology can now do and then looks for places to deploy it. At its worst, strategic priorities change with every new model, product or capability.
That does not mean ignoring technological change. Quite the opposite. Organisations need a strong understanding of how AI is evolving. But they also need enough strategic clarity and leadership maturity to recognise which developments genuinely matter to their business, rather than allowing every new capability to dictate a change in direction.
Are organisations asking AI leaders to solve the wrong position?
I see the same challenge appearing in the way organisations think about AI leadership.
Many organisations bring in a senior AI leader and expect them to identify opportunities, create strategy and define how AI should be used.
But there is a danger that this outsources a question the executive team itself needs to own.
A Chief AI Officer, Head of AI or AI transformation leader can bring enormous value. They understand what the technology makes possible, bridge technical and commercial teams and help organisations execute at pace.
But they should not have to invent the company’s reason for using AI in the first place.
The executive team should already have a clear understanding of the organisation’s most important priorities and where it is trying to create value. The role of an AI leader should then be to determine where AI can materially change the organisation’s ability to achieve those objectives.
Without that clarity, it becomes incredibly difficult to determine what success for the AI leader, or indeed the broader AI strategy, should look like.
What previous technology transformations can teach us about AI
There is also a sense that history may be repeating itself.
During the growth of data science, many organisations invested heavily in capability before establishing clear business use cases.
AI is different because of its potential impact across an organisation. But the underlying strategic mistake can be remarkably similar.
Is FOMO becoming a strategic problem?
This is perhaps one of the hardest challenges facing leadership teams because there is a genuine cost to moving too slowly.
The pace of development means organisations cannot simply sit back and wait until the technology settles down. Businesses that adopt AI will gain a competitive advantage.
But there is also a cost to moving quickly without direction.
The pressure to be perceived as “AI-first” or “AI-native” can influence organisational priorities. Leadership teams do not want to fall behind competitors, clarity on AI strategy and businesses want to demonstrate a credible market position.
That creates a difficult tension. Move too slowly and you risk missing genuine opportunities to create competitive advantage. Move too quickly without strategic clarity and you risk deploying capital, hiring teams and reorganising the business around problems that were never particularly important in the first place.
The answer, in my view – is being intentional.
Why AI leadership is becoming a boardroom issue
For all the discussion around models, platforms and capability, this is increasingly becoming a leadership question rather than a technology one.
The organisations that lead in AI will not necessarily be those that adopt every new capability first. They may be the organisations best able to separate signal from noise.
They will understand what their business is fundamentally trying to achieve, recognise where AI genuinely changes what is possible, establish the right foundations around it and bring in leaders capable of translating those priorities into tangible outcomes.
That is a very different proposition from simply deciding that the organisation needs to “do AI”.
Perhaps, then, the question boards and executive teams should be asking is not:
“What is our AI strategy?”
It should be:
“What is our business strategy, and where can AI materially change our ability to deliver it?”
Because there is a significant difference between leading AI and being led by it.
If you’re considering how AI could shape your organisation’s leadership, and talent strategy, get in touch with James Ilott to discuss your requirements.
