Where should your company start with GenAI?
To better understand Generative AI (GenAI), look at it through a bifocal lens. Through the top lens, one sees larger, emerging issues like accuracy, privacy, and bias, as well as a long-term view of the potential impact of GenAI on “knowledge workers” and even economy-wide job losses and social risks. . Although this approach is important, we have heard again and again that it is not helpful to executives and board members because it is difficult to translate the common insight that this will impact millions of jobs into what this means for their businesses today. .
That’s why we recommend looking at GenAI through a lower lens and taking what’s straight ahead. Here, leaders can explore the immediate opportunities and threats from GenAI that companies face today. However, in adopting this approach, leaders may also need to adjust what they are seeking.
Our case studies, based on our growing global community of over 3,000 GenAI practitioners, point to a new category of work that is more precise and actionable than “knowledge work.” We call this WIN work: places where tasks, functions, possibly your entire company or industry depend on the manipulation and interpretation of words, images, numbers and sounds (WIN). Heart surgeons and chefs are knowledge workers but not WINS workers. Software programmers, accountants and marketing professionals are WINS workers.
GenAI has the potential to become a power tool for WINS work. It can generate new prose, computer code, images, narration, music and video as well as assimilate and summarize, critique, improve and reformat almost any type of document or analysis. Every WINS function, subprocess, and end-to-end process within your enterprise (and in many cases the entire enterprise) should be evaluated for potential leverage with GenAI.
How important is it for my firm to focus on GenAI?
We believe the easiest way for companies to move forward is to ask themselves two simple questions:
- How much of our cost base is made up of WINS work?
- How digitized are WINS inputs today?
When plotting your company on a 2×2 matrix, ask yourself where it falls. Top-level classification can be accomplished by looking at the firm’s overall cost base and then by task, and estimating the percentage of work that wins. For example, software development, customer service, marketing, and research and development are just four areas with high levels of WINS work. Here’s a closer look at each competitive situation.
in the crucible
Industries with a high percentage of costs in the WINS function and are highly digitized are “in the crucible” and must immediately understand and adopt GenAI. Software, entertainment, professional services, financial services, education and others are at risk, as competitors who adopt GenAI faster will be better, faster and cheaper.
GenAI’s tools provide new, creative answers and expressions for everything from resumes to marketing. Think of it like the power of photography in portraiture. Whereas portrait painting had previously been available only to the wealthy – an artwork created slowly by highly trained craftsmen – photography radically expanded the market, changing the entire idea of a portrait (think of a selfie) and its economics. Changed. Photography became a new form of art in the hands of great talents. Similarly, software development, screenwriting, film production, tax filing, accounting, etc. are likely to be under significant cost pressures – and will undergo wholesale changes over time. These activities may or may not be fully automated, but just as you would never hire an accountant today who doesn’t use Excel, having a GenAI capability could be critical for many tasks.
hold the lever
Companies that are “holding the lever” are able to achieve benefits in cost, time and quality, even if their cost base is not heavy on WINS work and their customer end product or deliverable is not even WINS nor digital. yes. For example, Moderna recently required all employees to be trained in GenAI tools. They believe this is a fundamental skill for increasing WINS worker productivity, whether their product is a molecule or a treatment intervention. In our GenAI learning community, we have found that GenAI is excellent for aiding bid preparation when responding to RFPs. Sales speed is a key performance variable for everyone, even companies that have few WINS employees. Many SG&A functions, key aspects of R&D, and even entire end-to-end product development and supply functions can leverage GenAI.
next in line
The category of “next in line” in our framework can provide an opportunity to take tasks that are not digital today and digitize them to create opportunities. For example, many leading home decor companies are investing in their own “digital front doors,” enabling customer identification and participation in the purchasing process. GenAI will enable new levels of customization to help customers take action by visualizing home furnishings in more realistic and imaginative ways, leading to better experiences, greater customer engagement and much lower returns for those companies that are most Are ahead.
in the balcony
For those companies that are “in the balcony,” we see low digitalization and limited wins characterizing the value creation process today. These are often industries with high amounts of low-skilled labor or, when higher skills are involved, the nature of the skill is more in the creation of a physical product or service. Figure 2 gives a sample of industries in each of the four quadrants.
Unlike a lot of CapEx and technology expenditures that take years to see returns, GenAI, even at this early stage, can often increase EBITDA within the year of its adoption, because near The increase in productivity over the period is so compelling. Over time, these initiatives may lead to strategic investment opportunities to create defensible assets or competitive moat.
Legal and risk issues
When using these tools, it is important to have human review of critical and high-risk decisions. Today’s GenAI models can sometimes “hallucine” and give wrong answers. So, for now, employees should use it to enhance high-risk tasks — not to completely automate them. Over time, innovators will explore ways to improve and enhance core models to improve accuracy. Also, if you are using one of the open access models like ChatGPT, have clear policies regarding when you will allow data and questions to become part of their knowledge base and when you will keep it private.
where to start
To advance your GenAI initiative, we suggest the following approach:
1. Get fully educated on the full suite of GenAI tools that can drive productivity, change, and innovation in your company and industry. This is not a classroom exercise. It is very similar to swimming. You can’t learn to swim by listening to lectures or watching videos. Roll up your sleeves, dive into the pool and swim. Learn how tools work and what they can do.
2. The board/CEO should appoint a cross-functional team to initiate practical experiments at the function, subprocess and process levels and report on progress.
3. Have a cross-functional business/technology/finance team check whether you can generalize the lessons of your initial experiment. Find out where you “hold the lever.”
4. Strategically review the cost drivers in the WINS category and current digitalization to assess how important it is to invest broadly in GenAI. Find out if your company is “in the crucible.”
5. If you realize you are “in the crucible” or “holding the lever,” create a test-and-learn strategy tied to a six- to 24-month program of improvement. We believe you only have so much time before the competitive intensity in your industry increases.
6. If you are “next in line,” get smart on GenAI and start moving toward digitization of all win operations so you are at the forefront. You’re going to be “in the crucible”, and if you don’t change your industry, someone else will.
7. Continue learning for the people “on the balcony.” While things are less imminent for you, GenAI tools will come to make your business easier and faster, just as Excel and Word have replaced calculators and typewriters.
Seeing GenAI through bifocal lenses
As we said in the beginning, we advocate that all business leaders should wear their ZenAI bifocals and look at the distance not only through that top lens, but perhaps more immediately and importantly, One must see what is nearby through the lens below. Historically it has taken about five to seven years for a disruptive firm to change the industry model. Five years after Uber’s 2009 founding, taxi medallion prices in NYC reached nearly $1,000,000 in 2014. By 2017 they were valued at $250,000 or less and continued to fall.
Firms with a heavy reliance on win-win operations need to act today to survive stiff competition and overcome disruptive competitors within 36 to 60 months. Don’t fall into the trap of high costs, outdated processes, lack of data, brain drain and expensive capital.
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