What does it actually mean for businesses?

During the cryptocurrency boom in 2017, a beverage company changed its name to “Long Blockchain” and Stock price 5 times higher?

Today, as then, it would be difficult to find a company that isn't clamoring to adopt transformative technology. todayIn other words, artificial intelligence.

Companies developing AI tools and hardware are garnering investor and media attention, while the companies that use them boast that they are driving evolution, optimization, and productivity through cutting-edge technology.

AI is in a league of its own when it comes to its impact on business and the world at large, with enormous potential that some see as comparable to the advent of the internet.

But it's this very fact that's bringing back flashbacks to 2017. In a chaotic landscape where new tools and new versions are released every day, where the current tools have serious flaws, and no one knows what tomorrow will bring, can every company suddenly become “AI-driven”?

Are companies really systematically integrating AI into their products and processes, or is it enough for Bob in HR to use GPT-3 to generate a generic job description for a company to claim to be “AI-driven”?

While the latter is unfortunately more prevalent, it's the former that I'm interested in: what are the characteristics of companies that are fully committed to AI, and how can we distinguish them from those that are simply buying into the hype?

To find out, I met with Philipp Mühlbauer, CEO of a German POD startup. Merchant One — is a self-described AI-driven company. Philip explained how AI is integrated into merchOne’s processes and products, highlighting five elements that are the basis of the company’s AI transformation.

1. Understand the technology and recognize its potential

AI is not a fad or a single tool. AI is a transformative technology. Many continue to associate AI with ChatGPT or their early experiences creating emails and disappointing articles. But that is missing the bigger picture, and recognizing this is a prerequisite for comprehensive AI adoption.

Even just looking at ChatGPT and its many wrappers, the capabilities of AI are extremely broad. It can digitize and automate processes that were not possible before. Anyone can analyze huge amounts of data instantly. Tasks that used to take weeks can now be completed in hours.

At the same time, dozens of AI tools are emerging every day to target and automate specific use cases. “The last 18 months have made everyone realize that what we previously believed about AI was nothing compared to what we should expect,” says Philip.

It is shortsighted to equate AI with a single tool or use case. Recognizing the transformative potential of AI is the first step for any business to embrace it and begin new ways of working.

2. A comprehensive transformation process

AI has many uses and can permeate every aspect of a company, including product offerings. This can be a daunting task for any organization: Where do you start? How do you manage it all? How do you make sure you don't miss out?

These are questions of strategy, not individual tools or use cases. Companies need to take a holistic approach and systematically consider how AI can create value across the entire organization, from products and services to internal operations. Without this holistic view, AI implementations will be uncoordinated efforts where vast potential is wasted on disjointed use cases.

For example, merchOne's AI strategy is based on three pillars:

1. people — Influencing the organization to enable everyone to harness the power of AI (e.g., one-on-one coaching on using AI)
2. product — As a company, we constantly reflect on how AI will change our business (e.g., new product development)
3. process — Improving business processes to better serve customers (e.g., analyzing thousands of reviews to find and address issues)

Of course, you need a North Star to aim for. Philippe advocates for customer satisfaction. “At the end of the day, the customer needs to benefit all the time, whether that's better customer service, smoother interactions with the company, or a better product.”

3. Cultivating AI evangelists

Another hallmark of AI-driven companies is the presence and support of AI evangelists – people dedicated to staying at the forefront of AI technology. It's virtually impossible for every employee to do this voluntarily, as they won't have the time or resources to even keep up with updates to the most popular tools.

Leaving it up to individuals also comes with risks, such as the proliferation of tools that complicate collaboration, pose security threats, and make document creation impractical.

Therefore, you need leaders with the authority to research, test, and recommend AI tools to drive the discovery of new tools and use cases, and help teams make the most of existing ones.

This can happen at an organizational level or at a more granular level, such as with team managers taking the lead, as in merchOne's case: “We have AI evangelists within the organization who spend more time on AI than anyone else, and they use this information to make their direct teams smarter.”

4. Be a pioneer

The sheer volume of AI tools released every day can be daunting, and can also leave you questioning their quality and usefulness. Chasing the latest tools can be risky. Moreover, as AI evolves every day, some may worry that by the time a tool is introduced, it will already be outdated.

Of course, caution and discretion are required, but Philip advises: “If you wait for the perfect tool, you'll be waiting a long time. Use what's available, get as much benefit as you can, learn what you can, and don't get discouraged when you have to throw it away. The last 12 months have been crazy in terms of what's possible and what's not, and there's more change to come.”

The market's rapid evolution shows few signs of slowing, and by the time essential tools become established, early adopters will have a clear advantage in terms of both mature internal processes and the practical experience to get the most out of these tools.

5. Workforce transformation

Arguably the biggest factor in the success of an AI transformation is having a workforce that embraces continuous upskilling. This is particularly challenging. With media reports of “AI is coming to take your job,” it's common for employees to see AI as a competitor rather than an assistant. However, this attitude is at odds with the growing demand for AI fluency.

In fact, embracing AI has become a core requirement of merchOne's hiring strategy. To help all employees adapt to the new reality, the company has expanded its learning platform with AI-related content. It also offers one-on-one coaching and mentoring on how to leverage AI, with more than half of employees taking advantage of the opportunity.

“We see it as our responsibility to help our employees future-proof their careers. AI isn’t going to go away in a year or two. It’s here to stay. Not learning about AI is like not learning English in the business world: it no longer makes sense,” Philippe points out.

Accept it as the situation requires.

One thing can be said about the progress of AI over the past year: no one knows how far it will advance in the next 12 months. AI is advancing by leaps and bounds, with barely a week going by without major companies making breakthroughs and smaller disruptive companies raising millions of dollars.

But the real benefits of AI are already here, and we can't afford to let them go unchecked.