Competing in the Age of AI Requires a New Strategy

Allow me to introduce you to the phrase of the decade. That’s AI (Artificial Intelligence) for business.

Artificial intelligence (AI) has infiltrated our lives like some form of body snatcher. It imbues previously inanimate objects like refrigerators and stereos with seemingly sentient attributes. They leave us feeling both impressed and unsettled.

Competing in the Age of AI

As small business owners, we straddle the intersection of user and creator.  As users of technology, we might enjoy the convenience that AI brings to our lives. “Alexa, order a half-gallon of milk.” Or “Siri, schedule an appointment with John Smith at 2 pm on Wednesday.”

As creators of products and services, we are thrust into a world of technology. It’s much easier to use than it is to integrate into our business. So the consumers of our products and services can experience that same level of convenience.

What’s the Impact of Artificial Intelligence on Small Business?

Artificial intelligence is disrupting. And it transforms how companies operate.  Larger companies have the technical resources to meet this new demand. But small businesses are at risk of being left behind.

Let’s start with retail. There are over  1 million retail establishments  across the United States, according to the NRF.  And then there’s Amazon.

One of the most common complaints among Main Street retailers is that customers come into their store to touch, feel and try their products and then buy them at a discount on Amazon.

One way those retailers are “fighting back” is by creating an online store on Amazon.  But is that all a small business can or should do?

How Can a Small Business Compete in the Age of AI?

To answer that question, I turned to a new book,  Competing in the Age of AI: Strategy and Leadership When Algorithms and Networks Run the World by Marco Iansiti, Karim R. Lakhani. This book describes the implications of artificial intelligence for business.

The authors focus primarily on larger businesses and brands, but there are plenty of lessons here that a small business owner can appreciate.

The first is to re-think how your business is structured and begin incorporating data and digital networks into your business model.  The book provides examples from well-known companies such as Pelaton as well as global company examples.

In the “AI Factory” chapter, you’ll begin to understand that the true power of artificial intelligence lies in helping your customers make better, faster decisions and choices.  Netflix is the example they use that we can all relate to.

Security isn’t a sexy topic, but it’s one that every business will need to embrace. Even though you, as the owner, are dedicated to running your business with integrity, there are forces outside your organization looking for data vulnerabilities.

Finally, the last chapter “A Leadership Mandate,” will prepare you for the challenges you are most likely going to face as artificial intelligence becomes more and more prevalent across the industry landscape.

Get An MBA in Artificial Intelligence

If business books that over-simplify major industry trends leave you with more questions than a basic understanding, this book will not disappoint.

Authors Marco Iansiti and Karim Lakhani are both professors of Business Administration at Harvard Business School.  And, this is what makes the book a bit challenging to get through if you aren’t used to reading more academically minded books.

The text is based on extensive research with hundreds of enterprise businesses and reads like case study after case study.

While this may land as being “over your head”, it’s worth taking the time to read the book carefully and giving yourself the time to digest the information.

Conclusion

Remember when you were wondering if having a website was necessary for your business?  Or, what about if social media was a fad? Well, put artificial intelligence for your business in that same category.

You don’t have to wonder if AI is important for your business, start by accepting that artificial intelligence will eventually be as critical to the sustainability and growth of your business.  Your challenge is understanding and planning for how and where you should start implementing AI to add value and improve your customer’s experience. Competing in the Age of AI will help you on this journey.

Image: amazon.com

This article, "Competing in the Age of AI Requires a New Strategy" was first published on Small Business Trends