This article originally appeared in the World Economic Forum on January 20, 2025.
As we enter year three of the generative AI era, leaders and laggards are starting to emerge – and pressure is growing for C-suite executives to show stakeholders they are making progress with this promising technology.
The good news for companies that are falling behind is that there is still time to catch up. Everyone acknowledges AI’s potential. Fully 96% of the CEOs of New York Stock Exchange-listed companies recently surveyed said they view AI as an opportunity for their business, according to research by the Oliver Wyman Forum and the NYSE.
But the details on how they plan to reap the benefits vary greatly. More than 90% said they are investing in AI to enhance efficiency, gain customer insights, and reduce operational risks, while 87% are focused on boosting workforce productivity. A full 56% of CEOs see AI as a key priority to drive growth, but most haven’t yet figured out the most effective ways to integrate the technology into their business – and how to best serve their customers. Less than half have developed an enterprise-wide AI strategy.
Before leaders can successfully transform their organizations with AI, they need to answer three fundamental questions: What’s the most effective way for my company to explore the possibilities of the technology? How can AI help me understand my customers better? And how can it reshape my workforce?
See what works — then double down
Many business leaders say they are already using GenAI to break down silos, enable cross-functional collaboration, and accelerate decision-making. Some 40% of executives predict GenAI will deliver productivity gains of more than 30%, according to Mercer’s Global Talent Trends survey.
And many companies are indeed moving fast to become leaders in specific AI use cases. One in five is already seeing gains from work redesign, according to the Mercer survey.
But some companies are just going through the motions, throwing money at AI in the hopes that something meaningful will emerge. As a group, mid- to mega-sized companies are spending an average of 2.2% (and up to 3.5%) of their annual revenue as a fixed upfront investment in AI, according to a global survey by Oliver Wyman of 400 C-suite executives. Not all of it is being spent wisely.
The organizations finding the most success are those experimenting in rapid test-and-learn cycles, and then scaling those experiments. They choose targeted paths, not universal playbooks, that reflect valid strategic choices on where and how to invest in AI, as aligned with their organizational realities and constraints – and then mobilize resources behind them. A global furniture retailer, for example, is using an AI bot to handle run-of-the-mill questions, and has trained its call centre workers to become remote interior-design advisers.
Meet customers where they are
Half of the Fortune 500 companies since 2000 no longer exist, and due to rapidly changing demographics, geopolitics, technology, and customer needs, companies face increasing pressure on their business models. The ability to identify and shape emerging customer demand with sufficient velocity is becoming the key differentiator between extraordinary and ordinary performance. There are striking variations in how different industries extract and attribute value to their AI initiatives.
AI is seen as a great (and fast) enabler for identifying shifting needs, developing hyper-personalized products, and winning new (and retaining existing) customers. Some 58% of the NYSE-listed company CEOs surveyed cited AI investment to develop new revenue streams. The aggressiveness skews in favour of large companies; more than half of small-company CEOs (but only a third of chiefs of large companies) said they are delaying investment in such innovation until use cases of the technology become clearer for their business.
One place to start is at the touchpoint with customers. More than 70% of the NYSE-listed company CEOs surveyed said they are investing in AI for customer service. The advantage: a rapid reduction of the “experience premium,” as the gap between human novices and experts narrows through AI. One study estimated a 14% improvement in the productivity of customer service agents using GenAI. The most pronounced gains were among novice workers, who attained the capabilities of experienced agents in just three months – rather than 10.
Reskill and reimagine the workforce
Almost a quarter of all jobs will change within five years because of AI, according to the World Economic Forum, with 44% of workers’ core skills disrupted. In many instances, technical skills are becoming obsolete within two to three years.
These shifting skill premiums will require organizations to untether skills from jobs, to enable the more agile (re)deployment of talent; they will increasingly move from traditional fixed job models with skills captive within specific jobs and functions, to flexible and flow models that enable the redeployment of talent and skills where they are most needed. These more agile talent models will enable companies to identify areas of need and quickly pivot – something 66% of companies say they can do today, according to the Mercer survey.
There is strong appetite for this approach; 60% of employees want to work for a skills-based organization, and 78% of upper-level managers believe this transition is important for the future, according to surveys by the Oliver Wyman Forum.
Pivoting a workforce also requires businesses to significantly upskill their workers. To better prepare them, companies need to shift from episodic training to continuous skills-building that is embedded in daily work. They must also expand their definition of valuable skills. Uniquely human skills – including critical thinking, emotional intelligence, and complex problem-solving – are crucial in an AI-augmented workplace.
A catalyst for growth
Leading companies are increasingly building multi-skilled workforces, as they shift focus from having a workforce built for “just in time” to one built for “just in case.” AI is no longer just a disruptor; it is a catalyst for growth and a driver of organizational transformation that can make these changes possible.
Leaders must act boldly and decisively, embracing AI as a strategic enabler and a critical tool for navigating uncertainty. In doing so, they can position their organizations at the forefront of innovation, resilience, and growth in the AI era.