AI Can Build Your Next Business—If You Think Bigger

Welcome to the Civil from BCG. AI, I think it has the potential to invent, to actually create and allow companies to capture new growth. Right now from my vantage, organizations are so focused on the advantage of AI to cut costs, to change how jobs function in their organizations. And I think they're gonna miss the window. And that windows the largest opportunity in two decades, unless they start to focus outward on what they can build in the world. (upbeat music) AI is more than automation. It has the power to create entirely new business models and revenue streams. Those that embrace that shift will stay ahead. Those that don't risk falling behind. So how can companies and organizations harness AI to invent the future, rather than just optimize the present? I'm Georgie Frost, and today on the so-what, I'm talking to Beth Viner, who leads BCGX, ventures and business build globally. So the way we talk about Gen AI and AI at BCG is within a framework called deploy reshape and invent. And deploy is really around how individuals use AI in their day-to-day roles. Think about this as giving access to chat GBT, to everyone in your organization and expecting them to use it to be more efficient. Reshape is pulling all those individuals together to think about functions within an organization, how to make it more efficient. So you can imagine an extrapolate that to accounting and finance, to marketing, and to every really, really part of an organization. Invent is what I'm most excited about. And invent is around allowing AI to put you in a position to capture new growth. And so this could be building new products and services. It could be allowing you to unlock the assets you have in your organization at a greater pace and speed. It might be allowing you to get to market more quickly, but really all of it allows you to respond to the changing behaviors and dynamics in the world to build new things that your customers actually want. And so this is the space and place where I think less of the tension exists right now. And we also see less of the large organizations playing your even towing into the space from reshape at the moment. - Well, I was gonna ask you, where do you think businesses are in that triangle as it were of deploy reshape invent? And I would suspect invent is the one that is perhaps the most overlooked. Is that fair? - Yes, you nailed it. I think invent is entirely overlooked by large organizations. I just think AI is still new. And especially as we think about the tools and services that exist to support large organizations that are at their disposal, almost all of them are focused on functional roles. I think that reshape is also where all the focus is because is less risky to large organizations when they think about it, right? They can always have a person in the middle because functions by definition are the bodies of humans in an organization who represent a functional part of your business or specific set of roles. And so it's easy to understand how in customer support, there's a human in that loop right now, right? And so it's easy to mitigate risk and understand how you can test and learn. It's a really different story when you cross that chasm, which feels like a big leap. And so I think one of the questions is like, how do we make it feel like less of a leap for companies? Just to foreshadow a little bit. But really when we look at that, we're saying you're putting new products and services into the market with customers, right? And those are driven by AI. Forget the fact that a lot of people have built for a long time, has had AI and machine learning in it, but I think at this moment, this precipice, it just feels different, right? The technology is moving in a much faster pace. And the risk, especially for highly regulated industries, feels like something that they just don't have they're footing about right now, right? And so testing it in more of a reshape and a functional set of roles to gain comfort, but also to upskill and gain the capabilities and their organization. Well, it just seems like the right move right now. You touched on it then. You said, AI has been around for many years actually. But what is it about the AI now that you are so excited about when it comes to invent? What can it do? Where's the potential? I think the potential for me is in the speed of it. It's in its ability to respond so quickly and coupled with the speed is accuracy. You have to understand how to engineer really the right response to get what you're looking for. But to me, that's a skill you can practice and learn, right? And so I think as we look at places where we see invent already at play and we see it coming, like drunk discovery in my mind is a great example. And one of the promises here is the speed at which generative AI is kind of the next wave of AI and what will really power what we all believe is a huge technology boom, a huge growth boom, is its ability to sift through vast data and not just sift through it, but then make sense of it. And then pull together and synthesize a set of potential futures, right? And so that process, which whether it's in pharmaceuticals or whether it's in movie and film production or whatever it might be, generally takes a long time for humans and organizations to get there. And so that speed at which you can really create these net new things and test them out, even before you really commit to putting them into market is something we just haven't seen yet. - Well, you mentioned there, pharmaceutical, you mentioned there, it's film and entertainment, which industries, which other industries, do you think are most ripe for AI disruption? Well, film and entertainment to me, sits in a larger category around anything where content creation is at the core of what an industry does, right? And so film, television, music, publishing, all of those spaces are ripe for disruption. The question there is how do these industries find and strike the right balance? Because right now when I look at content creation and the industries at which that is at the center, these are tools that all of us have at our disposal right now. And so you start to see how that will change the pace of creation, the quantity of creation. And then you start to understand how organization should respond, right? Is it around curation to find the right content that you want to watch? Is it around tools that actually allow people to access their data and library of content, right? You know, what is it and what should they be doing? - I think two other industries for me, certainly healthcare, drug discovery being probably front and center and the place where we're seeing just so much invention and innovation, their companies right now who are bringing drugs discovered using Genai into clinical trials. I think the other place for me, and again, these two industries, healthcare, and this next one, financial institutions, to me are heavily regulated, right? And so I think it's a question of how you move forward. But when I think about financial services and the space here, how AI machine learning will be used to create better credit models, right? And so you could increase approval rates and hopefully organizations, banks, other loan entities can reduce their credit losses. It can also improve and provide access for people who might want to say buy a home, who prior to this could never qualify, right? And so you start to see the different ways that AI will impact these industries from an invent point of view, from an external perspective that creates new growth that finds new markets, it finds new customers and kind of endpoints that really change the way people behave. - How do you make sure, because we've all read examples, particularly in financial services, where it is so unbelievably crucial to get it right, where AI has got it very wrong. So how do you make sure, and whatever company you are, it may not be as serious as a loan application, for example, but every company needs to do it the right way. How do you make sure that you do that? - Yeah, I mean, I think first and foremost, responsible AI just needs to be part of any risk assessment and governance structures you're putting into place. The same as it would be, by the way, or should be, if you're building any new product service or business line or a new business altogether, I think it has to be a piece of that puzzle. It has to be a part of the conversation and a tangible part of the conversation. The second thing I would say is that what I worry about most is that rather than dealing and thinking about how to responsibly use AI, my worry is that organizations are using that as such a gate that they actually never get to the test and learn piece of this. Right, and so as I look at where the pace of change is happening, regulated industries are just going very slow. What will happen is that digitally native startups and organizations will start to put these new products and services into market. They'll be much more risk in those and they may fly under the radar a little bit because they're much smaller organizations and entities to start. But what I worry is that the big organizations are really just missing the boat. And what missing the boat means here, you know what, I'm just gonna wait and see. You're not building this muscle to fast follow because what is believed by those executives who believe that to be true, is that they will have the time to fast follow. They will have the capabilities to fast follow. And for me, that fast follow is so much faster than large organizations can see and are ready for. Right, and so the way to think about this is to say, responsible AI, right? You have to have some guardrails and a scaffolding. It should be a front and central conversation. But it can't be a gate to starting to learn how to use Gen AI, how to use AI, how to put this technology into products and services in a safe way as you're starting to test and learn kind of in a closed pocket before you launch it. - I have two thoughts listing to what you are saying just then about particularly digital first companies and traditional businesses perhaps being left behind and thinking they can catch up. The first is, is there an element and we've certainly seen it across financial services that the big corporations think, well, we'll just let the startups pave the way, make the mistakes, break things, move fast and then we'll just buy them up and incorporate it into a division of ours. I mean, that could be one solution. The other one is, you said it's a real shame about traditional businesses not keeping up. Does it really matter? Some people may say, well, if they can't keep up, there is no space for them in this new world. So why should we mourn the loss almost? - I'm gonna start with that one 'cause I think it's so fascinating why would we mourn the loss of them? And to me, I guess as I think about it just from a broader perspective, it's just inefficient. They have the capital, they have the people, they employ a lot of folks, right? A lot of us use their products and services. And so as much as I'm a huge proponent of new businesses and startups and, you know, I've spent a lot of my career on that side building that new things, I want organizations to figure out how to respond. There's a lot of emotional capital, there's a lot of mind share and there's just a lot of resources that they control. And so to me, yeah, I guess it doesn't matter if they do. You might be right about that, but it's just a damn shame if they don't. They have all the assets that would allow them to be successful. If only they can shift their mindset and kind of start to capture some of the talent and capabilities that would allow them to move with more speed. - Okay, so then to the first part of that, which is couldn't they just buy up these startups and these digital first companies is, I suppose that could be one solution? - It could be one solution. You know, mitigating the risk a little bit, deciding that maybe there are not so good, they don't have the right skill set and just the right focus, right? They're focused on incremental growth, year over year, putting forth to the market, what they need to produce, right? It's not a bad strategy in theory that they wait. You just get to cherry pick the things that survive. Big companies can afford it, so that's probably fine. The thing that makes me most worried about it, well, there are two things that make me most worried about it. One, I think most large organizations have a pretty poor track record of integrating assets that they buy. That's both from a technology point of view, this is the second point, but also from a people point of view, right? When they buy these new companies, these assets, they're not just buying the technology, right? They have to bring in the people, they're buying the capability. And so inherent, I think in a lot of these acquisitions is this idea that you're Trojan horsing in an aquahire. If those people can't figure out how to operate in your culture, if your organization doesn't know how to absorb, doesn't have the empathy for the kind of skill set, but also mindset that it takes to build that new thing, then integrating it in, well, you might just not get all the value that you're hoping to out of it. With that in mind, and in the context of this digital future, a lot of emphasis has obviously been on jobs and individuals, but perhaps less so on companies, and what changes some will naturally fall by the wayside, some more will come up, they'll be merged in acquisitions. Do you expect that to quicken up? It's such a good question. I was having this conversation with a good friend over the weekend, and she's definitely of the mind that if big companies don't move quickly, they won't be here anymore. And she comes from a services background on the legal side. She was telling me this great story about like how, for clients now ask her things that they never would have asked her 18 months ago, and then she has to go into the intricacies of law to explain to them why chat GBT didn't actually understand their full contacts and like gave them a wrong recommendation, right? But you can see how quickly from her vantage, like it is going to change. I do think large organizations may be able to fend off some of the pace and speed of it a little bit, but the idea that you could have whoever you're talking to, Claude, your chat GBT, make you an app, right? That my friend was also telling me that her husband, like in three days, essentially, had Claude make him a version of MailChimp, just like build it. He's not an engineer, he's not a mobile app developer or web app for it, like none of those things, right? And when you start to see how people at an individual level gain those skills outside, if you don't allow that into your organization, eventually it's going to catch up to you. I don't want people listening to think that we're saying that every company is in this situation, and absolutely no companies are getting it right, or even trying the raw risk of worse, etc. No, there are probably plenty of companies that are trying this. Some successfully, but I imagine there's a lot that are trying but doing it unsuccessfully. Are there common mistakes that established companies particularly make when trying to adopt AI beyond the operational improvements? First of all, you're totally right. There are a lot of companies getting it right. A lot of companies, spending the calories, investing in their people, investing with cold hard cash, to start to make change. I think when we think about the invent piece of the AI puzzle, where companies are getting it wrong, is they are throwing spaghetti at the wall. And by that, I mean, they're taking ideas that they have in their head, and rather than unpacking that strategically to understand what people really want in the world, right? Just the same way, if you were watching a new product, you're looking for product market fit. What do people actually want in the world? How can you test and make sure validate your idea that it's true, that it's worth building? And by the way, if you invalidate it, that's okay, right? Like, there are a lot of ideas, a lot of good ones. So just find another one, or actually adopt the idea, change it a little bit, so that it actually makes sense in the market. So that you have that fit, the value prop works. Once you've captured that, then I think the thing that organizations often miss is they miss the economic, the business case, right? So there's a lot of great things that people certainly want in the world that make zero economic sense for your business, because it might be way too expensive to acquire customers. It might actually just not fit into the business that you're in, so it's like strategically, like, doesn't make sense. You don't have the right humans and people in that, and so take, create that part of your business from the ground up, would not make sense from a business case point of view. And so I think that's the second piece, is like really getting detailed and digging in to the viability of the business. And the last piece that you then kind of a third tranche of that, is you really have to think about the feasibility of this business. You have to stop and say, "Is this a business we want to be in? What's the benefit?" And then it goes back to the economic model, it goes back to the people, and so you can see these iterative loops that you go back and forth in, right? And so the ability to balance kind of these different kind of muscles, capacities and capabilities in an organization, for me, that's a leadership shift that has to take place. Looking ahead, what excites you the most about the future of AI-powered business invention? I think for me, it's just the optimism around what the future holds. It's this idea that anybody can kind of be the change, can kind of be the center point. Ideally, you know, they're in a big organization, but I think what's pretty incredible about it is you don't have to be. It's not only could be or should be or will be a great equalizer, but I think the opportunity to create incredible equity, to allow people to kind of come forward without the traditional paths, to education or the traditional backgrounds from an economic, socio-economic perspective, it's pretty incredible, right? And so I'm really excited to see what people build. And hopefully those people are part of organizations, but for me, I think that's the most exciting part of that future. And finally, you've outlined the so-what, but what is the now-what? What are the next steps, the takeaways? The now-what for me is for individuals and organizations to look inside and to see what their assets are. What are they really good at, right? And then to look out in the world and see what it is that people want. And then to marry that back in, right? Figure out is there a business there? How do we make it happen? And so to me, the now-what is moving forward, not just by throwing spaghetti on the wall and hoping it sticks, but by actually realizing that an innovation and invention is entirely a scientific process, by which if you actually follow it and listen to the signals in the world, and actually go through to really understand and interrogate ideas in a meaningful way, that you'll end up in an incredible place and you will invent and innovate for your organization. So for me, that's the now-what. Beth, thank you so much. And to you for listening, we'd love to know your thoughts to get in contact, leave us a message at the [email protected]. And if you like this podcast, when I hit subscribe and leave a rating, wherever you found us, it helps other people find us too.