A tale of two titans

ChatGPT launched just over a year ago and Microsoft was quick to position itself as a backer and believer in OpenAI. Investing billions of dollars into OpenAI and and Mistral, and embedding AI into its current offerings, simple bold decisive steps were made quickly that convincingly show they are betting big on AI. The result? They’re currently the worlds’ most valuable company.

Alphabet’s response however was muted in comparison. Why? According to a recent article in the FT, this can be attributed to their size, scale and structure which hampered decisive action, to the numerous teams with competing models and sub-par products vying for attention and the very real risk to their underlying search business of introducing a ChatGPT alternative. The company famously lost USD 100 billion the day it launched Bard because it gave the wrong response. It’s reputation would appear to have taken an equally sizeable hit as well.

If Google can be disrupted, why not you?

To the casual onlooker, it really does seem like Alphabet’s leadership was caught off-guard by the emergence of ChatGPT. Why they didn’t anticipate this change despite the work they have done to contribute to the development of generative AI is anyone’s guess. In contrast, Microsoft acted swiftly and decisively, jumping onto the AI bandwagon with confidence and foresight. Their initiative set the tone for how they plan to navigate the evolving technological landscape. Meanwhile, Google's diffuse decision-making and internal focus left them poorly positioned to respond effectively. If anything, they seemed disconnected from real-world developments and consumer demands, raising questions about their strategic direction.

This serves as a stark reminder: if successful and innovative companies like Google can be disrupted by massive technological shifts such as generative AI, why not any other company?

What to take away from this?

This time it’s different

It’s clear that Generative AI is transformational technology and the level, scale and pace of disruption it delivers is unlike anything we have seen and with massive implications on how we live, work and play. There will be questions that we haven’t needed to or learned to ask that will need answering soon. With time (and more money), the level of change we are witnessing will only compound which will quickly impact how businesses organize themselves to create and deliver value.

Uncertain times call for leadership 

From COVID-19, inflation, and recessionary fears—business environments have been anything but tranquil and with the advent of AI and climate change risks, there’s every reason to believe that uncertainty and complexity will continue to be the key themes of the day. There is no place for leadership based on conservatism, short-termism and an aversion to making choices. Instead, what’s required are bold strategies, initiative, vision, and the ability to make hard choices.

AI adoption is not a strategy 

Generative AI changes the game for every business. Nonetheless, embracing AI alone cannot a strategic end in itself. In the words of AG Lafley: “strategy is a way to win, nothing less”. Adopting technology without an underlying plan on how you plan to win in you arena will not get you far. While there is a lot of buzz today about AI adoption, one would hope that a greater if not equal attention is being spent on devising a strategy to win beyond AI adoption.

How agile are you?

We’ve seen how Microsoft's swift and decisive actions contrast sharply with Google's sluggish approach. As relentless disruption becomes the norm, leaders will have to prioritize agility if they hope to capitalize on emerging opportunities in a dynamic environment. This calls for speed, courage and decisiveness. It requires leaders to move away from needing guarantees and firm answers to support decision making and towards embracing informed hypotheses, rapid experimentation and learning.

Whether we realise it or not, we’ve entered a new age and the game has changed; and that requires us all to change right along with it or risk getting swept up by the currents.

Yours,

Hardesh.