If Necessity Drives Invention, What Drives Reinvention? Generative AI.

If Necessity Drives Invention, What Drives Reinvention? Generative AI.

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At last month’s World Economic Forum’s annual meeting in Switzerland, the musings of French author Jean-Baptiste Alphonse Karr, and his most famous aphorism kept replaying in my head: The more things change, the more they stay the same. While he hasn’t been with us for more than 130 years, his words are timeless.

January 2024, Switzerland, Davos: Accenture hosted hands-on workshops on generative AI for business … [+] leaders around the world during the World Economic Forum Annual Meeting 2024 meeting in Davos-Klosters, Switzerland.

Accenture

You see, the last time I was in Davos was over a decade ago. Then, the world was still recovering from the 2008 financial crisis and discussions centered on the challenges and opportunities of a new economic reality. I recall that technological innovation and its contribution to economic development, sustainable growth and societal wellbeing were major themes. Fast forward 13 years and we’re still focused on navigating change. On creating opportunity. On using technology to build a better world.

Yet the challenges we face today are quite different. So are the opportunities. And so are the tools we have at our disposal to address them.

The case for reinvention

In 2022, we predicted that companies that reinvented themselves by leveraging technology, data and AI would achieve a new performance frontier. This year, we predict a significant uptick in companies that embrace generative AI as a catalyst for reinvention over the next 12 to 24 months. And, as I mentioned in my last column, based on discussions I had with today’s leaders and executive working sessions my colleagues and I led in Davos, business leaders are on board. They are becoming believers in the potential of generative AI to impact every aspect of their enterprise and are more open to the concept of continuous enterprise reinvention.

Their thinking is evolving for several reasons. The first is that the level of disruption they face has never been higher. Accenture’s ACN recent Pulse of Change Index found that the rate of change affecting businesses has risen by 183% since 2019—with technology being the top driver of business disruption today. And there’s no indication the pace of disruption will moderate any time soon. We found that 88% of C-suite executives expect the rate of disruption to speed up even more in 2024. And more than half (52%) don’t feel prepared.

I think business leaders are beginning to realize that navigating today’s accelerated pace of disruption calls for the type of accelerated response that reinvention, driven by generative AI, can deliver. As my colleague Jack Azagury reiterated when we released the C-suite insights around change just before Davos, “We believe that the companies that will succeed in the next decade are those that embrace a strategy of continuously reinventing every part of their business using technology, data and AI, including harnessing the power of generative AI, and help ensure their people are at the center of their transformations.”

There is mounting evidence that a reinvention strategy can reset an organization’s performance frontier, but it must be part of an ongoing focus and attention that splices reinvention into organizational DNA – ultimately building lasting resilience and sustained growth.

In the series of Gen AI workshops we hosted for business leaders, we explored this very point. We reviewed findings from Accenture’s Reinvention in the age of generative AI research, which found that companies that have already built the capability for continuous reinvention and have made swift progress in executing their strategy increased their revenues by 15 percentage points more than their peers between 2019 and 2022 and their average profit margin was 5.6 percentage points higher. Moreover, this group of leading companies are aggressively increasing the pace of their reinvention to extend their lead with the gap in revenue growth projected to increase 2.4X from 2022 to 2026. This makes for a particularly compelling position in the face of today’s macro environment.

Finally, and perhaps most importantly, I think that the emergence of generative AI technologies has allowed business leaders to consider reinvention as more than a theoretical concept. Indeed, our research found that 81% of business leaders see generative AI as a key lever in their reinvention strategy. It’s easy to understand why. We haven’t seen a technology with the potential to impact every aspect of a company in recent memory.

Reinvention in action

While the number of companies who have successfully built the capability for continuous reinvention remains small (9% today, up from 8% last year according to our research), I am encouraged by the number of business leaders at WEF24 who are readying their organizations for the profound AI opportunities that lie ahead. There was, for example, a pharmaceutical executive who is anticipating generative AI’s transformative impact on drug discovery.

Yet, amid these leaders’ eagerness to embrace change, I also sensed uncertainty on how best to harness the full potential of generative AI responsibly. Leaders find themselves at the crossroads of limitless possibilities and uncharted risks. It’s an exhilarating—and frightening—place to be.

Generative AI is more powerful and accessible than previous forms of AI. That requires leaders to think differently about how to use it. They need to educate themselves on generative AI technology and use cases, as well as the risks, and then apply it responsibly. They need to collaborate with others to identify new sources of value. And they need to have a sense of humility, recognizing that generative AI and its applications will continue to evolve and likely take them in unforeseen directions.

In addition to C-suite education, collaboration and humility, here are five other imperatives executives should consider that will enable a successful reinvention strategy in the age of generative AI:

  1. Lead with value in developing end-to-end business capabilities, powered and reinvented with generative AI. Identify strategic opportunities to reinvent the value chain and scale them to capture their full value potential.
  2. Develop an AI-enabled, secure digital core. Invest in the right technology infrastructure, security practices, data management tools and capabilities and ecosystem partnerships to support the reinvention agenda.
  3. Set and guide a vision for how to reinvent work, reshape the workforce and prepare workers for a generative AI world. Companies will accelerate their progress if they bring people along as stakeholders of and advocates for change.
  4. Close the gap on responsible AI. We found that only 2% of companies have fully operationalized responsible AI across their organizations. With over 40% of working hours in the U.S. likely to be affected and augmented by generative AI, making responsible AI pervasive, systematic and enterprise-wide is key.
  5. Drive continuous reinvention, not as a one-time effort. Blend technologies like generative AI with people’s ingenuity to capture long-term value and build lasting resilience through an operational mindset for continuous change.

The more things change, the more they stay the same…or do they?

Comparing my experiences and conversations in Davos in 2011 with those in 2024 reminded me that business leaders are working toward the same objectives they always have: growth, resilience, sustainability, stewardship of public trust. Yet the world in which they operate, the challenges they face, and the tools at their disposal are in a constant state of flux.

Those changes and disruptions make their jobs harder. But they also present unique opportunities to do things differently. Better. Faster. More impactfully. Right now, the opportunity lies in using generative AI—not just as a tool for productivity, but a guiding force for business reinvention. This may be the moment disruption meets its match. This may be the moment that disproves Karr’s long-lived adage once and for all.

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