Experience Stern | Faculty & Research

The questions about generative AI that we hear most often from business leaders include: When will gen AI match the intelligence of my best employees? Is it accurate enough to deliver business value? Is my CIO moving fast enough to lead our AI transformation? What are my rivals doing with gen AI? But those questions are misdirected. They focus on the intelligence of gen AI and its trajectory—how good gen AI is and how fast it’s improving—rather than on its implications for business strategy. What leaders should be asking is this: How can my organization use gen AI effectively today, regardless of its limitations? And how can we use it to create a competitive advantage?

This article—which draws on our experience working with hundreds of managers, leading gen AI initiatives ourselves, and researching digital transformation and strategy—proposes a framework for thinking about gen AI strategically and offers practical advice. We argue that a cautious “wait and see” approach—motivated by gen AI’s flaws, such as hallucinations—is potentially dangerous. But we don’t mean to imply that speed wins. Strategy does. Companies need to apply gen AI differently from their competitors and from others in their value chain. Here’s the argument for moving forward now:

Nontechie employees can use gen AI without support from experts. For decades AI usage was largely confined to the domain of engineers, computer programmers, and data scientists. But gen AI, led by OpenAI’s ChatGPT, changed that by enabling interactions using natural language. Its breakthrough wasn’t just an improvement in intelligence; it was also a dramatic increase in access. Today everyone in the organization can use gen AI tools, and they don’t need deep technical expertise, the support of a data science team, or central IT’s approval. What’s more, gen AI is increasingly being embedded into the tools people already use—email, videoconferencing, spreadsheets, CRM software, ERP systems—lowering the barriers to adoption even further.

Read the full Harvard Business Review article.
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Bharat N. Anand is the Richard R. West Dean of NYU Stern and Professor of Business Administration.