A Survey of 3,000 Executives Reveals How Businesses Succeed with AI

• Jacques Bughin
• Brian McCarthy
• Michael Chui

https://hbr.org/2017/08/a-survey-of-3000-executives-reveals-how-businesses-succeed-with-ai

Highly important issue that will change our world

The buzz over artificial intelligence (AI) has grown loud enough to penetrate the C-suites of organizations around the world, and for good reason. Investment in AI is growing and is increasingly coming from organizations outside the tech space. And AI success stories are becoming more numerous and diverse, from Amazon reaping operational efficiencies using its AI-powered Kiva warehouse robots, to GE keeping its industrial equipment running by leveraging AI for predictive maintenance.

Key learning's are:

Don’t believe the hype: Not every business is using AI… yet. While investment in AI is heating up, corporate adoption of AI technologies is still lagging

Believe the hype that AI can potentially boost your top and bottom line. Thirty percent of early AI adopters in our survey — those using AI at scale or in core processes — say they’ve achieved revenue increases, leveraging AI in efforts to gain market share or expand their products and services. Furthermore, early AI adopters are 3.5 times more likely than others to say they expect to grow their profit margin by up to five points more than industry peers

Without support from leadership, your AI transformation might not succeed. Successful AI adopters have strong executive leadership support for the new technology.

You don’t have to go it alone on AI — partner for capability and capacity. With the AI field recently picking up its pace of innovation after the decades-long “AI winter,” technical expertise and capabilities are in short supply. Even large digital natives such as Amazon and Google have turned to companies and talent outside their confines to beef up their AI skills

Resist the temptation to put technology teams solely in charge of AI initiatives. Compartmentalizing accountability for AI with functional leaders in IT, digital, or innovation can result in a hammer-in-search-of-a-nail outcome: technologies being launched without compelling use cases.

Take a portfolio approach to accelerate your AI journey. AI tools today vary along a spectrum ranging from tools that have been proven to solve business problems (for example, pattern detection for predictive maintenance) to those with low awareness and currently-limited-but-high-potential utility (for example, application of AI to developing competitive strategy)

Digital capabilities come before AI. We found that industries leading in AI adoption — such as high-tech, telecom, and automotive — are also the ones that are the most digitized. Likewise, within any industry the companies that are early adopters of AI have already invested in digital capabilities, including cloud infrastructure and big data.

The biggest challenges are people and processes. In many cases, the change-management challenges of incorporating AI into employee processes and decision making far outweigh technical AI implementation challenges. As leaders determine the tasks machines should handle, versus those that humans perform, both new and traditional, it will be critical to implement programs that allow for constant reskilling of the workforce.

10 Principles for Leading the Next Industrial Revolution

Tools and techniques to ensure your company will stand out in the new age of digitization. See also “A Guide to Leading the Next Industrial Revolution.”

by Norbert Schwieters and Bob Moritz

https://www.strategy-business.com/article/10-Principles-for-Leading-the-Next-Industrial-Revolution?gko=f73d3&utm_source=itw&utm_medium=20170824&utm_campaign=resp

Really, really important. Please go to the original article to gain the full impact.

It isn’t often that the broad infrastructure that underlies industrial civilization undergoes a dramatic transformation. But just such a change appears to be happening now. In a great wave of technological change, sensors are spreading through factories and warehouses, software is predicting the need for maintenance before a machine breaks down, power grids and loading docks are becoming intelligent, and custom-designed parts are being produced on demand. The leaders of the next industrial revolution are companies making advances in fields such as robotics, machine learning, digital fabrication (including 3D printing), the Industrial Internet, the Internet of Things (IoT), data analytics and blockchain (a system of decentralized, automated transaction verification). Because these technologies all reinforce the others’ impact, they are leading to a new level of proficiency, and to new types of opportunities and challenges for business and for society at large.

One key indicator is that conventional boundaries between industries are eroding. It’s getting harder to tell the difference between, say, a telecommunications company and an entertainment producer, or between a retail bank and a retail store. The relationships among suppliers, producers, and consumers are also blurring, more rapidly than many business decision makers are prepared for.

The foundation of business strategy has long been the classic value chain, which links together raw materials producers, manufacturers, distributors, and (in the end) consumers through a well-established commercial infrastructure characterized by a stable set of transactions. But the rise of digital technology enables individuals to connect outside the value chain and deliver more efficient, effective products and services. This will reduce the importance of economies of scale and conventional divisions of labor. Relationships among companies will be more fluid and the price and cost of goods and services more volatile than they are today. There is one certainty, however: Trustworthiness and a clear articulation of purpose, will become more important to business. An enterprise that is continually changing must balance that turbulence with purpose and trust, or people — including employees, suppliers, customers, and regulators — will not be able to make the full commitments that businesses need….

…The following 10 principles can help senior executives navigate the uncertainties of the next few years in a systematic and profitable way:

Building a marketing organization that drives growth today

By Raphael Buck, Biljana Cvetanovski, Alex Harper, and Björn Timelin

Technologies and customer expectations have changed faster than marketing organizations. Here’s how to fix that.

http://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/building-a-marketing-organization-that-drives-growth-today?cid=other-eml-alt-mip-mck-oth-1708&hlkid=c73ee2f989694be6a752be639f3fc30d&hctky=2805824&hdpid=b7d68b3d-c9e3-47c8-bfbf-46c90f903cd9

I believe this is an  important area for your companies to truly understand. Although this article discusses B to C businesses, it also hold for B to B.

There have been five shifts that have redefined the modern marketing landscape:

FROM:

1.  Targeted campaigns to personalized consumer interactions, leveraging advanced analytics

2.  Sales primarily through bricks-and-mortar stores to a mix of online, offline, multichannel, and owned channels

3.  Mass advertising campaigns to always-on content publishing

4.  A long-term innovation funnel to rapid test-and-learn, with an emphasis on speed to market

5.  Marketing as a cost to marketing as an investment, with measurable ROI

Few marketing organizations are able to take full advantage of new digital and advanced analytic s tools that would enable them to be more agile, engaging, and effective. They are also missing out on growth. A recent McKinsey survey of executives found that 81 percent of high-growth companies outperformed in data and analytics.
 
But capturing that advantage requires a new way of working. Some 71 percent of high-growth companies in that same survey have adopted agile processes such as scrum, cross-functional collaboration, and co-located teams. Another report found that top-performing marketers were more likely than their peers to be part of a networked organization (51 percent vs. 18 percent) and met more frequently with other parts of the business to create and deliver customer experience journeys.
Extensive experience working with dozens of companies to improve their organizational models has shown that marketing organizations need to change in three ways. First, they need to shift their organizational model away from “boxes and lines” to a fluid ecosystem of internal and external partners. Second, they must scale agile ways of working. And third, they need to build out a set of supporting capabilities that can deliver great customer experiences: