Competing Through Data and AI: A New Form of Darwinism

Survival Can Be Fleeting

In the 1950s, the average company lasted around 60 years. By 2017, that number had dramatically plunged to less than 20 years. AI will even further reduce it.

Yet, some companies are thriving. And others are recovering faster than their industry peers. What’s the common thread in their success?

Data, Data, Data

Like location, location, location in real estate, it is an organization’s data, data, data, and its ability to derive business value from data that enables them to thrive—data that helps them better delight customers, optimize operations, and innovate their business models and products apace today’s dynamic business and technology environment.

And data is the key to AI success. Without a solid data foundation, organizations cannot gain the trillions of dollars of generative AI economic benefits noted in a recent McKinsey Report, “The data dividend: Fueling generative AI.”

Where do organizations stand today?

The same McKinsey report states, “percent of leading organizations note that managing data is already one of the top challenges preventing them from scaling AI use cases.”

Viewing Data-driven Competition Through A Darwinian Lens

We are all familiar with Darwinism, “The natural selection of small, inherited variations that increase an individual’s ability to compete, survive and reproduce.”

So, it is not necessarily the fittest that survive. Survivors are the most adaptable to variation, turning challenge into opportunity.

Is your data preventing your business from adapting rapidly? Or might it be stuck in its old ways, risking extinction while other, more adaptable organizations take advantage?

Data Investments Must Continue, Even in Tough Times

When economic hardships hit or an organization faces challenges beyond its control, the response is often to cut data investments. While it’s essential to be prudent and make informed and potentially frugal decisions, it’s also important not to overreact.

Another McKinsey report states, “High-performing organizations are three times more likely than others to say their data and analytics initiatives have contributed at least 20 percent to Earnings Before Interest and Taxes (EBIT).”

Twenty percent of earnings before interest and taxes from data and analytics alone! That is an incredible contribution and a significant validator for why organizations must continue investing in data and analytics.

New types of analytics that deliver more in-depth insights help you uncover new opportunities. And those insights—automated, real-time, predictive, and prescriptive—are essential to survive and thrive.

Getting Buy-in for Data Investments

Data’s business value often means something different to various organizational stakeholders. To improve your alignment, ask your stakeholders open-ended questions, such as:

• How does our customer experience beat our competition?

• Where can we further streamline our business processes?

• # What must we do to get our innovative new products to market faster?

• From an opportunity cost point of view, what happens if we don’t act?

With answers to such questions, your organization will see that continued data investments are critical to your success. With them, your organization can take advantage of AI’s new opportunities, drive needed adaptive transformations, and compete effectively. Failure to adapt may accelerate your organization’s demise.