FOUR OF OUR BEST NEW IDEAS FOR THE C-SUITE

Last time, we told you the gen AI honeymoon can’t last forever. This edition of the CEO Shortlist explores what happens as we move from proof of concept to sustained sources of new value. As we know, it’s never just about the tech; gen AI is not a magic wand that will solve underlying organizational issues. Today’s leading executives are exploring how to integrate gen AI into their businesses by managing risks, building new capabilities, and aligning resources with strategy. We hope you enjoy the read.

—Liz and Homayoun

What’s new

Still on the sidelines? If your company hasn’t moved yet on AI, you’re at risk of being left behind. Our latest survey shows that 72 percent of companies have adopted the technology and that in just one year, users of gen AI have doubled. We also learned where companies are using this tool and how much they’re investing in it. 

Get in the game with “The state of AI in early 2024: Gen AI adoption spikes and starts to generate value,” by Alex Singla, Alexander Sukharevsky, Lareina Yee, and coauthors.

What’s now

Quit searching: money trees don’t exist. The money for gen AI transformations and other strategic initiatives typically has to be reallocated from somewhere else. But that’s easier said than done. Too often, annual resource allocation processes ultimately fail to align resources with strategy.

No need to panic, though. Read “Keep calm and allocate capital: Six process improvements,” by McKinsey partner Tim Koller.

What’s next

Get used to it. Gen AI is here to stay. As the novelty wears off, companies must figure out how to implement the new technology to create real value. Here’s how they can start. 

Surf “Gen AI’s second wave,” a Five Fifty from McKinsey Quarterly.

What’s needed

The biggest risk with gen AI? Not taking a risk with gen AI. “There is substantial risk associated with not diving in,” says McKinsey senior partner Ida Kristensen. But that doesn’t mean you should jump in without looking. Leaders should incorporate safeguards around data privacy, bias, and explainability when strategizing gen AI programs.

Risky business? Not necessarily. Check out “Managing the risks around generative AI,” the latest episode of McKinsey’s Inside the Strategy Room podcast, featuring Kristensen and McKinsey partner Oliver Bevan.

We hope you find these ideas inspiring and helpful. See you next time with four more McKinsey ideas for the CEO and others in the C-suite.

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