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AI's True Value: Beyond Optimization, Embrace Redesign
23 Jan
Summary
- AI's major impact stems from redesigning processes, not just optimizing existing ones.
- Executives predict AI revenue surge but struggle to pinpoint its origin.
- Historical parallels with electricity show revolutionary tech requires organizational change.
The true transformative power of artificial intelligence lies not in optimizing current operations, but in the radical redesign of business processes and products. While a recent IBM survey indicates executives expect AI to significantly boost revenue, a mere 24% clearly see how this will happen. This uncertainty is characteristic of revolutionary innovations, which often disrupt by enabling entirely new capabilities rather than simply improving existing ones.
History demonstrates this pattern. When electricity first powered factories in the late 19th and early 20th centuries, its initial impact was limited. The true revolution occurred when smaller motors allowed for flexible machine placement and workflow reorganization, leading to mass production. Similarly, AI is moving beyond automating routine tasks to enabling content generation, unstructured data interpretation, and autonomous actions.
This phase of re-architecture, while uncomfortable and costly, is crucial. It mirrors the productivity dip seen during the IT rollout in the 1970s and 80s. Executives demanding precise ROI forecasts for AI are making a mistake, akin to those who resisted reorganizing around electricity. Those who embrace AI for redesigning offerings and customer relationships will outpace competitors focused solely on incremental efficiency gains.
