The Three B’s of AI Strategy

As AI changes what customers can do without us, we need to rethink what belongs together and where we can still earn our keep.

AI can perform many of the tasks that once justified a firm's price, but task exposure alone does not determine a firm's fate. The same capability can undermine one business while strengthening another, depending on how tasks connect to assets and what customers will still pay for. We introduce the Three Bs framework to help managers work through these questions: Bypass examines how someone might deliver the same result without you; Bottleneck identifies what that alternative would still struggle to obtain; and Bundle determines what should be brought together to make your contribution worth buying. Drawing on two research programmes involving 626 firms tracked over eight years and extensive work with senior executives, the framework helps managers decide what to invest in, what to control and why customers will still have reason to choose them as AI's capabilities continue to change.

Read the full paper here.