Speaker 1 (00:03):
Since generative AI entered public consciousness with the publication of ChatGPT at the end of 2022, we've seen businesses go through several stages year on year to understand how best to address this. I think 2024 became the year where people started investing and trying to prove concepts and prove what they could get out of the technology. But what is changing and why 2025 is going to be the crunch year for business in AI, in my view and the view of my colleagues, is because now people are focusing on the benefit that can be derived from that, and businesses that aren't able to seize that opportunity are going to find themselves in real trouble next to their competitors.
Speaker 2 (00:44):
The AI Delta is the value loss that companies suffer from executing AI badly versus executing it really effectively. Our analysis shows that companies should focus on performance, competition and the unique opportunities available to them to bridge the AI Delta.
Speaker 1 (01:00):
Businesses that we observe being most successful here are doing a number of things, but I want to touch on two. The first is they're very closely aligning what they're doing with AI to their core proposition and business strategy. I think secondarily, they're being focused. The nature of the technology and also the fact that it is relatively cheap to experiment with makes it tempting to test a wide variety of different proofs of concept. But what we have observed is those who are more surgical, more critical and willing to invest more behind a smaller number of high-value ideas are creating a lot more value and creating a delta to their competitors that we observe.
Speaker 3 (01:39):
With the work we're doing with business services, you can see people kind of heavy businesses where there are large digital teams, large marketing teams. There's a lot of AI really changing those businesses, making teams much more productive in consumer and education type businesses. We're seeing personalisation and the journeys really being enhanced with AI in businesses such as industrials, some forms of FS as well, where there's a lot of knowledge workers. AI is really augmenting and changing those industries in terms of making knowledge workers and junior knowledge workers far more productive.
Speaker 2 (02:20):
Bridging the AI Delta really is going to require businesses to do what many of the leaders are already doing, which is to focus on value creation in areas that are strongly aligned with their overall business objectives, and that will require building both capabilities in terms of talent as well as data foundations to underpin that.
Speaker 3 (02:43):
Focusing on AI is really a differentiator to that business, so only doing AI that really matters to their core competencies and their core differentiators. The second thing is really measuring the commercial success and tracking the AI pieces and all doing the things that are impactful for the business and stopping things that aren’t impactful. And the third is in areas where businesses feel like they're getting behind, so in areas where they've not yet started AI initiatives and their competition is seeing benefits, really running fast to catch up on those AI areas.
Speaker 1 (03:16):
When it comes to the long-term success of AI Delta, it's important not just to think about the opportunities that present to you today, but how you can build foundations that last forever with your AI thing. And critical to that is understanding the compliance and ethical considerations of the use of AI. This is very much an evolving area, but businesses which stay on top of that and put AI ethics at the core of what they're doing are best placed to not only receive the benefit today, but the next day, the next year, the next 10 years as they seek to create value.
Speaker 2 (03:51):
Businesses need to think about not just what do they think is correct, but also the customer's perception of their ethics and how they proceed to use AI and have the appropriate governance in place because we are aware of a number of examples where customers have profound concerns and impose constraints on how businesses should be using and deploying AI, and that's going to be really important. This should be a race to the top, not to the bottom.
Speaker 1 (04:21):
There is a real challenge people face as to how to realise the benefits from AI. This is not simply reducing the number of people, but very much about managing to augment the people you have and their expertise with AI to create better decision-making. If you can put your operations team into more efficient circumstances and make them work faster, then they will always deliver more value, and that is where you create true value.
Speaker 3 (04:45):
The key barriers to implementing AI, we see a few repeat over and over again. Leadership is obviously a key one. If you don't have a leadership driving AI, it's never successful anywhere. Then there's organisational change is a key barrier and one that people need to think hard about. Organisational change is hard. There's a commercial element, always bet size and thinking about the right investment in AI, is it the right size? Are you actually putting enough behind what you're trying to achieve?
Speaker 2 (05:13):
AI has created a massive improvement in the ability of people to deliver the relatively simple tasks which are done at the bottom of most organisations. What people haven't yet worked out is how do you actually build those capabilities at the middle of the organisation without starting people at the bottom? And that is going to be one of the key challenges to solve over the next couple of years.
Speaker 1 (05:38):
To make the most out of AI, you've got to be prepared to change the way you work. In order to receive the benefits you've got to either change how you're working, do it with fewer people, or do things differently that drive value for your clients. 2025 is going to be a critical year for all businesses understanding and using AI and bridging that AI Delta. If you want to have a realistic and grounded in business fundamental solutions to using AI, then we at L.E.K. would be delighted to help you.
