GENERATIVE AI AND STRATEGY DEVELOPMENT

Strategic Exposure Group’s work on generative AI begins with a basic proposition:

The quality of a strategic choice depends on the quality of the exploration that precedes it.

Every decision involves choosing among alternatives. Each strategic alternative rests on assumptions about markets, customers, competitors, technology, execution, regulation, capital availability, timing, and other conditions that affect outcomes.

Those assumptions shape both the opportunity and the uncertainty associated with each alternative.

Yet traditional strategy development has always operated under practical constraints.

Individuals and teams can generate, compare, and evaluate only a limited number of alternatives and assumptions at one time. 

As a result, organizations typically have little choice but to narrow the field before committing significant resources to deeper analysis. Potentially important opportunities, uncertainties, and strategic alternatives may therefore remain unexplored.

This is one of the most important ways generative AI can change strategy development.

Most organizations are asking how AI can make existing work faster or more efficient. 

Those benefits are real. But the more significant question is different:

How can AI change what can be examined before strategic choices are made?

By dramatically expanding the range and scope of alternatives that can be generated, compared, and evaluated before narrowing the field, AI has the potential to fundamentally change the strategy-development process.

This matters because the quality of a strategic choice depends not only on the alternatives considered, but also on understanding the assumptions that drive their opportunities, and uncertainties.

Broader exploration is important, but it is not enough.

The quality of a strategic choice also depends on understanding which assumptions matter most.

Not all assumptions matter equally. Some have little effect on strategic outcomes. Others drive much of the opportunity, uncertainty, and attractiveness of a strategic alternative.

A disciplined use of AI can help decision makers identify which assumptions matter most and where additional analysis, judgment, experimentation, or learning may be required.

This changes the role of AI in strategy.

AI is not a forecasting machine.

It is not a substitute for executive judgment.

It does not eliminate uncertainty.

And it does not guarantee that better opportunities will be recognized.

But used properly, AI can make it practical to examine alternatives, assumptions, opportunities, and uncertainties at a scale that was previously impossible.

That is why its potential contribution to strategy development may be far greater than simply making existing work faster or more efficient.

The objective is not simply to make strategy development faster.

Nor is it automated decision-making.

The objective is to improve the quality of strategic choices by broadening what can be explored before commitments are made.

For senior decision makers, this creates a different way to use AI.

Not as a tool that provides the answer.

But as a tool that helps ensure better questions are asked, more alternatives are considered, more assumptions are surfaced, and both opportunities and uncertainties are examined before strategic choices are narrowed.

To learn more about how Strategic Exposure Group can help your organization apply generative AI to strategy development and decision support, please contact us at KPaul@StratExpoGroup.com.