The wrong place to start an AI transformation is with the technology.
If you buy the tools before you define the strategy, you aren't transforming your business. You are just upgrading your cost centre.
Most leaders confuse Efficiency with Transformation. They are not the same thing.
1. The Four Options (The Quadrant)
When you look at AI, you really only have four strategic choices. You need to know which box you are playing in:
- The Skeptic (Do Nothing): You ignore AI. You will eventually become irrelevant.
- The Optimiser (Efficiency): You use AI to cut costs and speed up current processes. This is where 90% of companies start—and get stuck.
- The Strategist (New Business Models): You figure out a new way to deliver value, but haven't built the tech yet.
- The Transformer (New Value + AI): You use AI to deliver a fundamentally new value proposition that wasn't possible before.
2. The Efficiency Delusion
The "Efficiency" box is seductive. It promises quick wins: automating emails, speeding up code, or reducing headcount.
But Efficiency is a race to the bottom.
If you use AI to make your existing 1990s business model 10% cheaper, you haven't transformed. You've just delayed your obsolescence.
Transformation is not about doing the same thing better. It is about doing better things.
3. Who leads the charge?
If you hand this to your IT department (CTO/CIO), they will naturally default to the "Efficiency" box. Their job is to keep the lights on and costs down.
True transformation must be led by the CEO and the Board.
Why? Because only the CEO has the authority to kill the old business model to make room for the new one.
4. The Correct Sequence
Stop buying licences. Start with this sequence:
- Education: The leadership team must understand what AI can actually do (beyond the hype).
- Strategy: Define how you will compete in a digital economy.
- Technology: Then buy the tools to execute that strategy.
The Bottom Line
Technology is the easy part.
The hard part is having the courage to change how you make money.
If your AI strategy doesn't make you uncomfortable, it's not a strategy. It's just a software upgrade.