On StrAItegy
- Frederic Etiemble
- Oct 7
- 8 min read
Everywhere you turn, AI is the headline act. Social and traditional media are buzzing with reports of companies “going all-in on AI”. Is it just clever communication to signal forward-thinking leadership? Or is AI now truly informing strategy in organisations?
In recent months, I've had fascinating conversations with Chief Strategy Officers (CSO) across industries on this last question. Their responses paint a remarkably inconsistent picture: some are making bold strategic bets on AI that could transform their business and - if successful - their industry, while others seem almost willfully blind to both the threats and opportunities AI presents. Many fall somewhere in between, grappling with how to meaningfully incorporate AI into their future strategy.
From these discussions, four distinct patterns emerged in how AI intersects with strategy:
as an efficiency accelerator,
as a transformative force reshaping entire business environments,
as an enhancer of existing products and services,
as an enabler of entirely new business models.
This article explores these four intersections and their implications, offering leaders practical frameworks for developing a strategy to thrive in an AI-enabled future.
First intersection: AI & operational efficiency
Chekhov famously said: “One must never place a loaded rifle on the stage if it isn’t going to go off. It’s wrong to make promises you don’t mean to keep.”
AI is the loaded gun on our corporate stage and all signs are that it is going to go off. Indeed, operational efficiency has been the cornerstone of most strategies for the last few decades, and AI turbocharges efficiency, so the temptation to leverage AI for even more efficiency moves will be impossible to resist. Like Chekhov's rifle, someone will use it. This is a modern version of the prisoner's dilemma: even if you think that massive cost-cutting enabled by AI could lead to significant unemployment and destabilise communities and that we would collectively be better off not to use AI, it’s hard to imagine that all your competitors will resist short-term efficiency opportunities. And if one competitor uses AI for efficiency and reaps short-term gains, then it would leave all others little choice but to do the same.
A CSO in the professional services industry told me about how they are implementing AI tools and agents to make their call centre operations radically more efficient. Soon everyone will follow.
Still, if you plan to use AI to turbocharge efficiency in your organisation, below are two questions to ponder.
Is a strategy purely focused on efficiency a good enough strategy?
Bill Fischer’s words come immediately to mind: “No company has ever saved its way to greatness!”
Efficiency can be a necessary corrective or a short-term stopgap, but it is not a long-term strategic direction. A strategy built only on cost cutting and streamlining will not create the future. It lacks the capacity on its own to generate growth, resilience or differentiation. An efficiency focus will have to be part of a strategy, but it can’t be the backbone of a strategy.
What should we hand over to AI?
The second question relates to core strategic capability and what do you actually want to hand over to AI? In my experience, many organisations struggle to articulate what their core capabilities truly are. Yet leaders need clarity on the following questions: What is genuinely at the heart of our value creation formula? And what can safely be handed over to AI without hollowing out our differentiating strengths? In media and journalism, for instance, would handing over the writing itself - a potential core capability - be a sound move? Or would it be misguided strategy?
In Reshuffle, Sangeet Paul Choudary warns us: “Using third-party AI tools can help you move fast, but if those tools become central to your customer value proposition, you may wake up to find that you’ve outsourced your competitive advantage.”
The strategic challenge here is to delegate as much as you can while protecting what is truly core to your value creation formula. A difficult task because what was core and working yesterday might need to change tomorrow.
Still, it also brings to mind the famous meme: “I want AI to do my laundry and dishes so I can do art and writing, not for AI to do my art and writing so I can do laundry and dishes.”
I’ll wrap up this first section with a quote from my business partner Sahil Merchant in his article on The Agentic Future, "AI is available to everyone, will be used by everyone, and will therefore likely benefit no one."
Like that professional services firm I mentioned, most companies will realise that using AI to turbocharge efficiency moves is not enough.
Second intersection: AI & your business environment
Efficiency moves are not enough because they are anchored in the world as it is today. But AI has the potential to rapidly transform our business environment in ways that are hard to envision. It would be dangerous to define a strategy that assumes that the world at your strategic horizon will remain the same as it is currently.
So, a key strategic question becomes: what will AI likely change in your business environment?
A framework I have used successfully to help leaders reflect on how the world may have changed at their strategic horizon is the AI Agentic Revolution.
You can find the full article here. In a nutshell, it argues that we are currently living through the AI Agentic Revolution, a fundamental shift from “doing the work” to “briefing AI agents that do it for you”. As organisations evolve how they work at different pace, it creates five distinct “worlds of work”:
The Old World (pre-2022) where we - as humans - need to figure out and execute all tasks.
The World of AI Assistants (2022) where we can delegate knowledge-work tasks to AI Assistants like ChatGPT or ask for step-by-step help on tasks that can’t be delegated.
The World of AI Tools (2024) where we can find specialised AI tools to do tasks for us.
The World of AI Agents (now) where we handover tasks to specialised AI agents who can handle entire workflows with minimal oversight.
The World of Connected Agents (emerging) where we handover work to AI agents who coordinate among themselves to accomplish complex objectives.
You need to anticipate which of these worlds of work will prevail at your strategic horizon and what it changes to strategic priorities. Will you still interact directly with humans, or primarily with your customers’ AI agents? Will your competitive advantage come from human expertise, or from having the most capable AI systems? Will your organisational structure revolve around human teams, or around AI agent networks? The world you envision will fundamentally shape the strategy you need to design.
A CSO in the medical research sector told me about the series of conversations he’s facilitating with the Executive team and the Board of Directors on what different AI-enabled futures could look like for them and what that means for their 2030 strategy.
Finally, anticipating the trends that will shape your business environment at your strategic horizon will create clarity on the required shifts to your business model.
Third intersection: AI & your business model
There’s often confusion around the intersection of AI & business models. The recent visual shared by David J. Bland, author of Testing Business Ideas, illustrates clearly that AI is not a value proposition but a key resource in your business model. Yet, the comments on his post also illustrate the wide confusion around this point.
To clarify this point, the analogy of electricity in the early 20th century is quite useful. While electric companies sold electricity as their core offering, most businesses used it to enhance their existing products/services and business models or enable new ones. So, if we go back to today and AI, unless you’re OpenAI or Anthropic, whose core business is developing AI, then AI is not your value proposition, but it could be a key resource you leverage to build a superior value proposition and business model.
How could AI improve my value proposition to customers?
My friend and colleague Christian Doll has been collating dozens of examples of what AI is capable of and how it can improve a value proposition to inspire his clients.
For instance, you could add a digital twin to your value proposition to act as a mentor to your clients, like Tony Robbins did.
For a professional training company that traditionally offers in-person workshops, a digital twin of the trainer could extend the value they provide beyond the end of the training workshop.
And there are many other ways they could enhance their value proposition by integrating AI, such as:
Providing personalised learning paths that adapt in real-time based on each participant's progress and learning style.
Creating realistic practice exercises using AI simulations.
Generating customised follow-up materials based on each participant's specific challenges.
Scaling expert knowledge by having AI assistants support human trainers during workshops.
The above examples show again how AI isn't the value proposition itself but rather enhances the core offering (professional development) by making it more personalised, accessible, and effective. The fundamental value to customers - improving their skills and capabilities - remains the same, but AI transforms how that value is delivered.
A CSO in the higher education space told me about the GenAI team they created to radically improve their current learning design approaches with AI and provide better courses to learners.
But the value proposition is not the only part of a business model that can be improved by AI, the rest of the business model can be transformed as well.
How could AI transform other building blocks of your business model?
Let's look at "channels" for example. Traditionally, organisations relied on websites and digital channels as key interfaces with customers. However, as we mentioned when introducing the AI Agentic Revolution, these once dominant channels could become increasingly obsolete as more consumer decisions are delegated to AI agents. When customers empower AI to make purchases, compare options, or handle routine transactions, the role of traditional digital channels fundamentally shifts. Organisations will need to adapt their channel strategy in the future to engage not just with human customers, but with the AI agents representing them.
As we’ve seen in section 1, AI will help you improve the efficiency of your operations, i.e. the backstage of your business model. But I’ll wrap up this section by reiterating that it will impact the frontstage of your business model as well. AI should help you future-proof your value proposition and anticipate the new customer segments, channels and customer relationships you’ll need to manage to thrive in an agentic future.
Fourth intersection: AI and new business models
Finally, looking beyond efficiency and enhancement of existing business models raises another important strategic question: what entirely new business models will AI enable? History shows that simply applying new technologies to existing models provides little protection from disruption. Consider how digital transformation alone wasn't enough to save traditional media companies - those that survived had to fundamentally reinvent their business models.
To truly harness AI's transformative potential, organisations must pursue business model reinvention, not just optimisation. The birth of the motion picture industry provides a compelling parallel. In the late 1800s, early adopters of motion picture cameras simply pointed them at existing entertainment, recording theater productions, circus acts, and royal ceremonies. But visionary pioneers like Georges Méliès saw beyond mere recording. They invented new storytelling techniques, special effects, and editing methods that transformed moving pictures from a novelty into cinema, an entirely new art form and industry. Similarly, while many organisations today use AI to merely enhance existing processes, the greatest opportunities lie in reimagining what's possible with this revolutionary technology.
What will the new business models and industries be? The key to answering this is to move beyond viewing AI as just a tool for improving what we already do and instead imagine entirely new ways of creating and capturing value that weren't possible before.
A CSO in the legal sector explained me how they are leveraging AI to invent the business model that will transform access to justice from an expensive service limited to those who can afford the price of scarce expertise (a lawyer) to a mass-market offering now that AI dramatically reduces the cost to access legal expertise.
In conclusion
While “going all-in on AI” doesn’t make a strategy, not leaning into AI is not a strategy either. AI is here to stay, so the critical strategy challenge for every organisation is to clarify how AI can make their operations more efficient, what it changes to their business environment in the mid-term, how it can contribute to strengthening their product, service and business model, and how it can enable the exploration of entirely new business models.
To achieve this, you don’t need an AI strategy. They tend to be containment tactics or tick-the-box exercises. What you need is a strategy refresh that acknowledges a world rapidly transformed by AI and clarifies how you will thrive in it.
About Fred
Executive advisor on strategy and innovation. Co-author of The Invincible Company, a guide to building resilience in organizations through corporate innovation. The book was shortlisted for the Thinkers50 Strategy Award in 2021.
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