What CEOs Need to Know About Generative AI

Recently attended the LinkedIn Live event hosted by McKinsey & Co titled "What CEOs need to know about Generative AI". Super interesting discussion with three impressive McKinsey partners: Lareina Yee Alexander Sukharevsky Alex Singla .

Thought I would share what I learned and observed. I will also share what I think was missing from the discussion.

Summary of Key Takeaways:

Speed is the Strategy

·      Opportunities for value creation are real

·      The technology is moving at an incredible speed

·      Use cases not possible a few days ago, now possible

·      Design projects with scale in mind

·      The biggest opportunities lie in automating tasks & processes while augmenting human activities

·      It is hard to scale Gen AI initiatives across an enterprise

·      Get started NOW

·      Those that act, learn and implement can create significant strategic distance between themselves and the rest of their industry

·      Opportunities for significant leapfrogging e.g. Re-Platforming: converting COBOL apps to Python can be completed in days – not months/years

Talent Implications

·     Will affect how we work and live

·     80% of jobs will be impacted by Gen AI

·     Vast majority of use cases augment humans, not replace, Gen AI is a companion to humans

·     Application at the task level will make current jobs substantively different

·     New jobs being created e.g. Prompt Engineer, existing jobs will be transformed

·     Tools are accessible – anyone can use them, this levels the playing field

·     Complex human-based tasks that have traditionally taken years to master (e.g. mechanic) can be mastered in weeks with Gen AI

New Loyalty Paradigm

·     Automate personalization of employee HR functions at scale to improve employee satisfaction

·     Automate personalization and tasks for customers e.g. chatbots that affect real service requests in real-time

·     Gen AI will have a greater disruptive effect on consumer industries initially

New Eco System / Platform for App Development

·     Vendor platforms (e.g. Apple), social platforms, mobile platforms et al were previously the dominant platform for app developers

·     Gen AI is the new app platform

Enterprise Considerations

-      Without a regulatory framework for guidance, enterprises must establish their own principles and best practices

-      Gen AI platform / ecosystem of choice is dependent on the use case e.g. Google’s platform may be better suited for drug research

-      Understand enterprise tech stack including data, software & SaaS vendors, computing power when analyzing automation opportunities

-      Beyond ROI – consider additional metrics that define success

-      Data privacy & security – LLM models inside/outside of firewall, confidential data absorbed by LLM? What types of data can be allowed to enter external LLM?

-      Manage vendor lock-in – utilize more than one Gen AI platform

-      Use cases 2x2 rule

• Two small, low impact / risk
• Two bold game changers

-      Re-imagine role & purpose of the enterprise within your industry

What was missing:

1. Framework / model for how to think about and analyze Gen AI
2. Any reference of how to leverage proprietary data & content to create value
3. No reference to cross-vertical search and the opportunity to create exponential value via data partnerships where proprietary data was aggregated and shared among multiple firms
4. How to target and take advantage of Long Tail opportunities
5. Guidance on the financial impact of use cases or how to measure
6. Visioning what a great AI strategy looks like or what the characteristics of a great strategy are

**Special note - Big thank you to Barbara Gray for much of the additional insights in the "What's Missing" section. More info to follow.

I have more thoughts as I immerse myself further in the business of Gen AI. I will share as I learn. McKinsey has some excellent content on their website in addition to this LinkedIn LIVE event. I will be sharing resources that address the six missing items (and more) as I go.