How To Offer New Human+Machine Value Propositions With AI - Forbes

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The role of artificial intelligence (AI) is becoming undeniable for businesses of all shapes and sizes. If you have repeatable tasks in your value chain, chances are that you will use an AI technology. As you get serious about AI, consider these two very different types of transformation initiatives or "pivots":

1. AI pivot to gain efficiencies by reducing cost or increasing output.

2. AI pivot to create completely new product or service propositions.

It is important to recognize the nature of your pursuit at the onset.

Let's look at each type of pivot in more depth:

AI Pivot To Gain Efficiency

If you use AI to enhance your bottom line by reducing cost or increasing your output in terms of quantity or quality, you are not necessarily changing your end-product or service. This is not necessarily a true strategic pivot by definition. This type of change will be very common and it may not be a huge long-term competitive advantage because everyone will pursue such changes over time.

Any initiatives to reduce operational overhead such as generating reports, operating equipment or carrying out quality assurance tasks would fall in this category. An organized roadmap can be developed based on a cost-benefit analysis and a prioritization framework. This AI transformation is relatively simple to formalize.

AI Pivot To Offer A Completely New Value Proposition 

The second type of AI transformation is a pursuit to create a completely new set of products or services in the marketplace. With the right approach, you could end up disrupting the market by slicing through the prevalent cost/value tradeoff that defines the status quo. This is a blue ocean pivot, and as a blue ocean strategy nerd, I get very excited about it.

So let's explore a step-by-step plan to create the right mindset for it:

1. Let intuition lead your way instead of experience.

You are too close to the business. Your knowledge may become a weight upon your intuition and wisdom. AI technologies have the power to alter human behaviors, and it can change the constants you have been working with.

To prepare for this journey, zoom out of your current definition of the target market, what customers like and don't like and any other assumptions you may have. Get ready to start with a blank slate and embrace the what-ifs you will encounter.

2. Ground yourself with your 'why.'

Write down what business you are in. It's not what you do, it is why you do it. We will end up changing what you do but we will never change why you do it, so this is an important step.

After the Second World War, Interstate highways were being built and commercial airlines were taking off. Imagine if the railroad companies in America had asked themselves the "why" question? Were they in the business of railroads, or was their mission to move people between places with speed and comfort? If any of them had offered the latter answer, they probably would have owned the biggest airlines today.

The "why" will not only broaden the scope of your thinking but it will also give you focus. It will serve as the guiding post as you enter the uncharted territories with flashy technologies around you.

3. Nurture the human+machine partnership.

History of mankind and technology proves that when automation replaces human labor, people find new things to do that are worth even more than the value of labor replaced by machines.

Securing the future of your people is, at its very heart, a Human+Machine pivot. The whole point is to transform the roles of people along with the AI instead of replacing their jobs in a way that the sum is larger than its parts. It should not only promise prosperity to your people but also improve the quality of their jobs. After all, who really wants to do mundane and repetitive tasks every day?

Once you paint a vivid picture of how everyone’s role transforms, people will typically develop the right intrinsic motivation that is critical for the success of any movement.

4. Apply design-thinking methods.

Companies make a mistake when they consider AI to be an IT project. It is a business model transformation, and I would argue that your non-technical people who have a pulse on the market are more critical to be in the driver's seat. The creative process has to uncover the latent needs of customers, and the best approach is to use various tools of the design-thinking framework.

Start with a broad scope of ideation and narrow down carefully so that every good idea gets its due consideration. Rapid prototyping is valuable to explore serious ideas. You can use the pseudo-intelligent prototyping techniques to visualize the experience.

5. Use a phase-gate innovation framework.

AI initiatives can be a wild west when it comes to managing investments because most stakeholders have limited understanding of the technology. Many times, an idea can feel as if it should be easy to execute based on the best-case prototypes, but it does not perform in the real-case scenarios. You will need a well-organized phase-gate innovation process (also known as a stage-gate model). Test multiple ideas. Use a prioritization model that accounts for the machine’s learning curve and success rate projections using your test data.

6. Use a low-code/no-code approach where possible.

The cost of AI technologies has been reducing over the last year or so as technology becomes more readily accessible. One of the biggest dynamics behind this shift is the low-code/no-code movement. Most AI tech is being democratized by open-source communities across the globe, and developers have been building plug-and-play components to make it more modular and adaptable.

If you are reading this article, you are already thinking about AI and that puts you ahead of the majority. COVID-19 has given every business an opportunity to pause, rethink and set a new direction moving forward. Now is the best time to start.

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How To Offer New Human+Machine Value Propositions With AI - Forbes
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