How AI Is Changing Strategy—and 4 Skills Leaders Need Next

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One of the most depressing things I see when I talk to boards of very large companies and to c-level leaders is a lot of them have come to believe they just can't change, right? So I show them what AI can do, and they're like, "Well, I guess we'll ride this out." And I'm like, "That's an insane answer. You have a hundred thousand people working for you. The smartest people in the world are working for your company. You have customers and resources. The idea that you can't be flexible and compete seems to be overly baked in right now."

Ethan Mollick, professor at Wharton and author of Coexistence, welcome to the IdeaCast.

Thanks for having me.

Yeah. So you've been closely tracking advances in AI and constantly experimenting with all the new tools. What is different today than even a few months ago in terms of how new developments should guide the way that leaders are thinking about strategy in particular?

One is the exponential curve continues. AI just keeps getting better. There isn't really a sign of that stopping right now. And the second is that agents are real, which are AI tools that can go off and do work on their own autonomously and do real, real process work, real important things. Um, and that has become a, a, a viable approach to work in the near past.

It seems like a lot of companies right now are thinking of AI as really a productivity exercise. You know, you're automating tasks, you're saving time, you're reducing costs. How does, you know, a genuinely strategic AI transformation strategy differ from that? What do you think-

Yeah

... companies should be doing now?

I think it's actually pretty urgent to do a few things. One is viewing this purely as a productivity tool gets you in trouble in a lot of different ways. People are getting ROI from AI, right? They're getting ROI from that productivity gain. Productivity gains are real. The problem is, is that those productivity gains get eaten up by the organization, which is if you don't change any part of the process, AI is mostly a single player entity, and you end up with more of everything. So if you don't change your KPIs, people can produce more PowerPoint, they produce more code. That's not actually what you want. So