Can Artificial Intelligence build an effective strategy?

Creating a strategy is not easy, but for a business to grow, it is a non-negotiable requirement. Strategising requires analytical thinking, developing an action plan and knowing what actions to avoid. Once created, it requires a strong leader to embed it within the organisation. Does Artificial Intelligence have the capacity to deliver this?

An effective strategy provides a clear roadmap – a set of guiding principles or rules that define the business actions and priorities required to achieve desired goals. And it ensures that resources, both physical and virtual, are sourced and allocated to the correct areas of business.

Strategists must also be adept at market and trend research, conducting thorough research to understand the competitive landscape and market dynamics, and staying informed about industry trends and best practices.

Automated tools could take a good chunk of this work away from humans and free up their time for other activities, though the business of interpreting the trends and working out what they mean for the business will still need to be carried out by people.

In larger organisations, the constituent departments generally feed into the over-arching business strategy, drawing on the expertise of specialists in each of the business areas.  For this to be carried out by AI tools, the automation of strategic thinking would need to reflect these devolved processes. The strategy of the finance team, for example, will be very different from that of the marketing team. While each department is working together towards a common set of goals, individually the teams have different responsibilities and therefore different approaches to meet their targets. Automated systems would need to ‘join the dots’, pulling each strategy together into a cohesive overall picture – an extremely complex task.

Automation can cope easily with straightforward tasks such as prioritising a task list, so long as there is an algorithm or set of instructions to define its work. The problems start when priorities change and human emotions drive the prioritisation process.

Artificial Intelligence does not possess consciousness or human experience. It cannot ‘think’ instinctively like a human and can only be programmed to perform tasks. It can assist with the analytical elements of the strategic process, with AI tools already available that can perform SWOT analysis by analysing data to identify relevant trends, opportunities and threats. But when it comes to evaluating this data to make strategic decisions, AI cannot draw on its ‘thinking’ to know what to prioritise. A human mind is required to take the strategy development to the next stage.

Once a strategy has been developed, clear communication is essential to ensure that the overall vision and the complexities within it are conveyed to colleagues at all levels of the organisation. They need to understand the direction of travel and how it will impact them. This may give rise to questions, and being able to answer them and empathise with the individual concerns of colleagues is fundamental to the successful implementation of the strategy. If colleagues can see why they are being asked to do something, it becomes easier for them to be motivated to do it. Skills of persuasion and influence are therefore key when delivering new ideas across a business, and there may also be ethical issues that need to be considered when a new strategy is rolled out. If necessary, certain modifications may be required to address such concerns. This is beyond the ability of AI and requires a human touch.

Although a strategy is a long-term plan, it is not set in stone. It is subject to changes in market conditions, business performance, and other factors outside the business’s control such as conflicts in supplier countries. These sorts of issues can be identified as risk factors by AI, and contingencies put in place, but there are also likely to be issues that it would miss. Things that have never happened before cannot be predicted by an AI system.

Artificial Intelligence’s role in strategy is more geared towards supporting the creation of the plan through analysis and enhancing the delivery across the business with automated tools, including involvement in return-on-investment calculations to inform future planning.

Working alongside critical thinkers and strategic decision-makers, Artificial Intelligence can perform a function as a facilitator, and this could be a good way to introduce automation and machine learning into a business from the very beginning, helping to develop the plan and then assisting the various departments to integrate it into everyday business practice.

Comms Team
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The Ennis & Co Comms Team

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