In recent years, many organisations have rushed to embrace artificial intelligence, viewing it merely as a tool for incremental improvements in efficiency. According to a recent McKinsey study, as many as 84 per cent of enterprise AI initiatives focus on cost-cutting and process optimisation. However, this narrow approach fails to tap into the true transformative potential of AI.
From Efficiency to Innovation
Historically, technological breakthroughs have generated value far beyond mere substitutions:
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Electricity did more than replace candles. It powered factories around the clock, illuminated cities well into the night and gave rise to completely new industries that were unimaginable in the candle era.
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The internet did more than digitise documents or transfer PDF files. It became the backbone for companies such as Amazon, Google and Alibaba, and helped drive sectors that have grown at rates seven times faster than global GDP.
If we bracket AI in the same old spreadsheet-and-macro mindset, using it only to automate routine tasks or shave seconds off workflows, we risk missing out on groundbreaking opportunities. Just as early uses of electricity would have seemed trivial if limited to candle lighting, early uses of AI confined to efficiency tweaks ignore its power to unlock entirely new capabilities.
Why Efficiency Plays Are Only the Beginning
Efficiency is important. It saves time, reduces errors and frees teams to focus on higher-value work. Yet McKinsey’s findings highlight a stark contrast in return on investment:
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Companies that apply AI to invent new products or re-imagine business models achieve a return three to five times greater than those whose AI efforts centre solely on cost cutting.
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By contrast, enterprises that use AI mainly to trim existing processes tend to see smaller gains and risk plateauing as competitors replicate those same efficiency enhancements.
In economic terms, efficiency creates a one-off improvement; innovation, on the other hand, lays the groundwork for sustained competitive advantage and new market creation.
Shifting the Mindset: From “Automate” to “Imagine”
To unlock the next wave of AI-powered growth, organisations must shift their strategic focus:
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Ask new questions
Instead of “How can we automate this task?” ask “What can we do today that was impossible before?”
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Reimagine business models
Consider how AI might enable entirely new revenue streams, services or ways of engaging customers. For example, predictive analytics could evolve into personalised, real-time recommendation engines that anticipate customer needs before they even express them.
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Invent novel products
Use AI to create products that learn and adapt, offering experiences that traditional software simply cannot match. Think of smart devices that evolve with user behaviour or platforms that generate bespoke content on demand.
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Foster cross-disciplinary collaboration
Break down silos between data scientists, domain experts and creative teams. Innovation often sparks at the intersection of diverse perspectives.
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Measure for innovation, not just savings
Develop metrics that capture growth in new markets, customer lifetime value improvements and the speed at which new AI-powered services can be launched.
Case in Point: AI as a Launchpad
Instead of viewing AI as a souped-up photocopier or a faster spreadsheet, think of it as a launchpad for entirely fresh business opportunities. For instance:
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Automotive industry: Beyond automated assembly lines, AI could underpin on-demand manufacturing of customised vehicles, adjusting production parameters in real time to meet individual customer requirements.
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Healthcare sector: Rather than simply processing patient records faster, AI might enable predictive health monitoring systems that detect early warning signs in real time, personalise treatment pathways and even propose new drug formulations.
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Financial services: Rather than using AI only to detect fraud, firms could deploy generative models to design entirely new investment products tailored to individual risk profiles and life goals.
Embracing the Unimagined
The real revolution in AI will not come from doing what we already do, only quicker and cheaper. It will come from daring to imagine what has never been done before. By freeing ourselves from a narrow focus on automation, we open the door to possibilities that can redefine industries, transform customer experiences and generate value far beyond mere cost savings.
AI is not a tool for lighting our candles more efficiently. It is the power source for the unimaginable. Let us stop asking how to automate what we already know, and start exploring what we have yet to conceive.
