Hey, ChatGPT, Make Us An Innovative Company

Every company worth the ground it’s occupying yearns to be an innovative place. Many have extensive, well-planned initiatives, and stage motivational confabs and training sessions to achieve just that. Yet, new data shows no one has really upped their innovation game in recent years. Will artificial intelligence provide a boost, or is it yet just another costly technology to be tacked somewhere onto the process?

It’s still too early to say whether generative AI — often portrayed as a mechanized font of innovation — can deliver on the high expectations people have for it. At this point, only eight percent are implementing at scale, a new report published by Boston Consulting Group (BCG) suggests. More than half report they are still experimenting with the technology.

There is only a small degree of innovation “readiness” among companies, which BCG defines as a “strong link between business strategy and innovation strategy.” Only 12% have attained this. Innovation activity — the number of projects going through the funnel — has remained steady, “evoking a troubling image: zombie innovation systems just going through the motions.”

In assessing AI’s long-term potential in super-charging innovation, hope springs eternal for the BCG team, which urges companies to reshape “their innovation systems with gen AI.” The potential benefits of generative AI, which can pull together data and content and deliver logical concepts in a matter of seconds, will be too compelling to ignore.

“It can inspire and challenge teams,” the BCG co-authors write. “It can take critical time out of processes, freeing staff to focus on more value-added activities. And it’s likely to become table stakes for any ambitious innovator, making it an increasingly important dimension of an organization’s innovation readiness.”

While only eight percent have generative AI at work across their enterprises, there is no shortage of excitement over its potential in the near term. It already is among the top three of investment plans for the year ahead, as cited by 89% of executives, the survey also shows. Currently, 86% report that their companies are at least experimenting with gen AI as an innovation tool.

At the same time, no one should depend on generative AI alone to deliver innovation miracles. “Reshaping your innovation function with gen AI is only a first step, and one that, given technological progress, never really ends,” the report’s co-authors caution. Plus, every industry has its different needs and nuances.

Ultimately, the most important point is that generative AI will only deliver competitive advantage and growth when the actual products and services it helps produce hit the ground, they continue. At least 21% of companies in BCG’s research indicated they are getting close, reporting they have implemented generative AI “with impact” in an innovation-related use case.

The top innovators identified by BCG are 1.5 times more likely to have implemented generative AI in one or more applications, and five times more likely to be applying the technology at scale.

They are doing so with a combination of both generative AI and traditional, or predictive, AI. Traditional predictive AI supports analytical decision making and optimization, while generative AI “boosts creativity, developing content, and distilling the essence of vast troves of information.”

The BCG analysts provide guidance on delivering successful AI that have a material impact on the business:

• Start off with quick wins. “It’s a great way to start gaining traction, identify champions, and spotlight small-scale applications with greater potential. For instance, companies can use ChatGPT to write first drafts of reports, or take advantage of Zoom’s automated meeting summaries.”
• Rethink critical internal functions. Generative AI “becomes a powerful new addition to the business transformation toolbox, freeing staff to work on more value-added activities.”
• Build and sell new things. Leverage generative AI to enable “new products, services, and business models—and enhancing the attractiveness of existing ones.”
• Test strategic assumptions. Shared strategic assumptions may cover customers, competitors, business economics, competitive advantage, and technology. Generative AI, “lacking emotional bonds and biases, can help by bringing an external perspective, making connections you might have missed that support or undermine your convictions.”
• Generate images, UX designs, 3D models, and videos. “GenAI is a huge help in the process of exploring and refining ideas.”
• Identify and explore innovation domains. Generative AI “can help innovators connect the dots to identify and develop a richer understanding of the shifting landscape of demand.” Generative AI can “look for patterns in online and social media, strengthening trend analysis capabilities.”
• Develop ecosystem insights. Employ generative AI to gain perspectives on the market at large. For example, one company, “eager to identify new and interesting applications of its technology, is using gen AI to rapidly summarize, categorize, and extract key themes from its—and its competitors’—patent citation networks, including automatically generating summaries of the product offerings of the corporate patent owners.”
• Employ AI to enhance creativity, generate new product and service ideas. This is an “iterative cycle of ideation, design and prototyping, and testing and validation,” the BCG analysts point out. “It’s where new products, services, and business models are born and perfected. GenAI is a great support for the divergence phase of any focused ideation exercise. By adjusting the ‘temperature,’ it can rapidly complement the inventory of human-generated ideas with a universe of options ranging from more near in to more far out.”

Generative AI promises to unlock some of the innovative potential of many organizations. But it needs to be seen as a tool — not a replacement — that can amplify and guide human-inspired ideas and ventures.