How CEOs can rewrite their organisational playbook for the AI era

As artificial intelligence (AI) rapidly evolves and advances, its potential to transform industries become increasingly evident. For CEOs, leveraging AI effectively requires a strategic overhaul that aligns with this technological shift. 

According to the 2024 CEO Study by the IBM Institute for Business Value (IBV), 62% of Indian CEOs said the potential productivity gains from automation are so great that they must accept significant risk to stay competitive. 70% of them said they will take more risk than the competition to maintain their competitive edge. 

So, while CEOs are keen to go ahead with their AI strategies, they must first understand the AI landscape by gaining a comprehensive understanding of AI technologies and their applications in his/her specific industry. This involves not only knowing the basics but also understanding the current trends, breakthroughs, and limitations. The next step is to craft a long-term vision that incorporates AI as a core component of the business strategy. CEOs must create a culture that encourages emphatic debate and constructive collaboration. 70% of CEOs said that their organization’s success is directly tied to the quality of collaboration between finance and technology functions, according to the IBV study cited above. 

Investing in AI talent and skills is the next key area that must follow the strategic vision. 71% of Indian CEOs said that succeeding with AI will depend more on people’s adoption than the technology itself. The right team of AI experts, data scientists, and machine learning engineers is crucial for developing and implementing AI solutions. Reskilling and upskilling the existing talent through training programs is equally important. This includes AI literacy programs for non-technical staff and advanced training for IT professionals.

While CEOs remain optimistic about their organization’s readiness for generative AI, hiring challenges may offer a warning sign. 69% of Indian CEOs said their team has the knowledge and skills necessary to incorporate generative AI. In comparison, 66% said their recruiting efforts deliver the skills and expertise necessary to achieve business objectives. 59% of the respondents said they are having difficulty filling key technology roles. 

As data is the foundation for any AI-based model, CEOs must ensure the organisation develops a data strategy that ensures data quality, governance, and accessibility. Then, he/she must identify key processes and functions where AI can have the most significant impact. This could be in areas like customer service, supply chain management, or predictive maintenance. One can start with pilot projects to demonstrate AI’s potential and then use these pilots to learn, iterate, and refine the approach before broader implementation.

Responsible AI 

Establishing an ethical framework is the cornerstone for any successful AI deployment. This includes guidelines on data privacy, algorithmic fairness, and transparency. CEOs must ensure compliance with relevant regulations and standards and stay informed about evolving legal requirements related to AI.

Strategic Partnerships with AI startups, technology vendors, and academic institutions can provide access to cutting-edge technology and expertise. Also, participations in open innovation ecosystems such as joining some AI consortia or industry-wide AI initiatives can bring in the required scale and exposure. 

The IBV study revealed that 76% of Indian CEOs said they have the right network of partners to execute their strategy while 61% believed critical expertise and capabilities to be increasingly concentrated in a small cluster of organizations. 

Finally, it is critical to define key performance indicators (KPIs) to measure the impact of AI initiatives. CEOs must be in a position to track the progress and make data-driven decisions to optimize AI deployment. The integration of AI into organizational strategy is not merely a technological upgrade but a fundamental transformation. For CEOs, this journey requires a deep understanding of AI, a clear vision, and a commitment to fostering a culture of innovation. By focusing on talent acquisition, robust data infrastructure, ethical considerations, and measurable impact, organizations can unlock the full potential of AI and secure a competitive edge in the digital age.

Views expressed are personal. Rishi Aurora is the Managing Partner of IBM Consulting India & South Asia