GenAI provides immense opportunities but poses dangerous risks. CEOs face the difficult mission to take action in a new and uncertain scenario to avoid being left behind.

Navigate 2024 growth horizons with Generative AI

Since its boom in late 2022, Generative AI has rapidly risen in relevance and kept attracting interest and investments. While it is true that it will impact some industries more than others, it has the potential to change every business and even our society as a whole. 

Catching the opportunities GenAI offers is pivotal for brands seeking to succeed, but value doesn't create itself - it has to be earned through strategy, trial, and effective resource allocation. 

This might seem overwhelming for CEOs, who are likely not immersed in technology. However, their priority should be to understand how GenAI will impact their businesses and industries and which are the best strategic moves to exploit opportunities, overcome challenges, and generate value.

According to Boston Consulting Group, while designing their Generative AI strategy, CEOs should focus on three key pillars:

  • Potential: identify the use cases that will drive the most value.
  • People: adapt your structure and educate your employees.
  • Policies: adhere to regulations and set up internal ethical rules.

Let's dive a bit deeper into these three pillars and explore the best moves to ensure a bulletproof AI strategy. Here's a comprehensive guide on how leaders can extract value from GenAI in 2024.

Understand AI potential: identify the best use cases for Generative AI

GenAI adoption presents high initial costs and requires resources, knowledge, and skilled talent. For this reason, as pointed out by McKinsey, selecting the best Generative AI use cases and focusing on them is the fundamental starting point for every AI strategy. We know that you must feel pressured to try everything and invest in everything, but it is counterproductive as you will dissipate resources. 

Executives, particularly CFOs, need to take their time to identify the largest opportunities for value creation and focus on them, ensuring they receive all the resources (capital, talent, equipment) they need. GenAI holds the potential to be a revolutionary technology, but it still doesn't mean that it will magically generate value in every business function.

Once you have identified the golden use case, you have a significant technical decision: should you fine-tune an existing model or train a custom one?

Fine-tuning an existing model is the most cost-effective decision, and at the same time, it can jumpstart experimentation since it's the fastest approach to GenAI adoption. However, these models depend entirely on the core model's functionality, domain knowledge, and modalities. They might not be adaptable to your specific needs or inefficient, and you won't have complete control over them.

On the other hand, training a custom LLM offers greater flexibility, but it comes with more significant costs and capability requirements. AI21 Labs estimates $1.6 million to train a 1.5-billion-parameter model with 2 configurations and 10 runs per configuration; to put these numbers into context, OpenAI spent $12 million on a single training run for GPT -3.

Finally, leaders need to evaluate the required investment and decide on several aspects:

  • Which is the best time for investment? The balance between being left behind and moving too soon, when the technology and talent required are not yet ready, is challenging.
  • How flexible should your investment plan and strategy be? Given today's state of the technology, it is better to implement GenAI in use cases with a high tolerance for variability and consider room for error.
  • Where should the funds come from? According to your specific situation, the budget could come from IT, R&D, or other sources.

How to prepare employees for the impact of Generative AI solutions

GenAI is a disruptive force for humans, and leaders are responsible for preparing the workforce to face the inevitable changes. CEOs need to work with the HR department to ensure the smooth adoption of GenAI inside the business. The question to answer is the following: how will the transformation unfold in your organization? Start from here, then move to redefining roles and responsibilities and adjusting operating models.

According to Deloitte, the digital transformation can result in up to $1.25 trillion in additional market cap, and GenAI can potentially be a powerful accelerator of this transformation. 

“Over the next decade, productivity gains and capabilities enabled by AI are expected to increase global GDP by $7 trillion, while the Generative AI market size doubles every other year.”

But, creating this value through GenAI solutions requires us to reimagine our way of working and the role of humans in the workplace. The most promising approach seems to be not seeing humans and AI as mutually exclusive opposites, replacing one another, but having a vision to work together in synergy to create competitive advantage.

  • Generative AI platforms can increase employees' skills, productivity, and efficiency, acting as an equalizer to level up talent: inexperienced workers can improve their contribution, while experienced ones can reach higher productivity levels.
  • AI-driven automation has the big benefit of freeing humans from tedious and repetitive work, giving them time and energy to focus on more stimulating tasks requiring a human touch.
  • Human creativity and GenAI capabilities can be combined to drive growth and build competitive advantage.

The CEOs are responsible for focusing on these three points, understanding where to employ GenAI and where to reallocate workers and ensuring that human-AI interactions are valuable.

How can we be prepared for future GenAI policies?

Everyone is starting to be aware of the risks posed by GenAI, from inaccuracies and hallucinations to data security breaches and copyright infringements. At the present moment, however, regulations are somehow falling behind. Policymakers are struggling to set rules and pose boundaries, while the need to have shared and comprehensive regulations becomes more and more urgent as the rate of adoption keeps going strong.

What are the current regulations regarding Generative AI?

  • Existing regulations like the European GDPR already apply to some aspects of GenAI.
  • Other existing regulations will need revisions to address issues and problems posed by Generative AI.
  • In some countries, such as the United States and China, there are substantial regulatory gaps surrounding GenAI and a strong need for new laws. 

While it is true that regulatory uncertainty makes it challenging to develop a Generative AI strategy, companies can control one thing: how they responsibly deploy the technology.

PwC suggests two steps to make sure your GenAI strategy is strong amidst regulatory uncertainty:

  • Build on your existing programs. Model risk management standards and established frameworks can be applied to AI models and strategies, and there are already more than 800 national AI policies to study. Moreover, organizations should strengthen their data security and privacy programs as a strong base for a successful GenAI framework. Transparency, explainability, and risk assessment should always be the priority.
  • Engage Risk Executives and work together to manage the risks. PwC suggests adopting a risk-based approach to Generative AI to be in a position of advantage with upcoming regulations. Moreover, this approach is helpful for reassuring consumers, stakeholders, and investors about the ethicality of your AI practices.

Supercharge your GenAI strategy with Tredence

Generative AI poses a big challenge for CEOs, executives, and investors. This technology can potentially disrupt nearly every industry, promising a competitive advantage and a massive transformation in our business structure. While CEOs are faced with urgent questions to answer and must take action now to avoid being left behind, the majority still struggle to understand how to employ Generative AI services for enterprises effectively. 

Challenges and risks are many, and the clock is ticking. With more than 70% of companies already experimenting with Generative AI, there is no time to waste: leaders must act now or lose the opportunity.

Companies like Tredence offer Generative AI consulting to design the perfect strategy for your business to unleash the true power of this technology. Take advantage of Tredence's cross-disciplinary capabilities and start your journey into new growth horizons with our Generative AI services.