Business inherently involves competition, without any judgment on whether that is good or bad. Competition motivates companies to innovate and provide better products, services, and customer experiences, while also enabling them to respond more quickly and accurately to changing market conditions. Competitive agility is a key factor that can help a business outperform its rivals. But how can you create competitive agility? The solution may emerge from the convergence of business innovation and generative AI. This article focuses on business innovation and the role of Generative artificial intelligence (AI) in the process. If any of these bullet points resonate with you, this article is worth reading for you:
- You are a business leader, executive, or R&D manager looking to boost your organization’s competitive agility through the power of Generative AI.
- Your team need to be more innovative. And as a leader, you consider using generative AI to boost the team’s ability to innovate
- You want to explore how AI may enhance the innovation process.
- You understand the importance of innovation and digital skills for business and want to put it into practice.
This insightful article enables discovery and enhancing your competitive agility through the use of artificial intelligence. It includes compelling examples of how generative AI tools can significantly foster business innovation.
What is Competitive Agility?
Competitive agility is a response to mitigating the effects of the fast pace of change. In this sense, agility refers to organisational responsiveness to changing market conditions. Agile organisations quickly adapt to changing market needs, developing new products and services ahead of competitors (Ndlovu, 2015).
But how can you drive competitive agility? The answer may lie in the intersection of business innovation boosted by AI. Competitive agility is an asset for firms, allowing them to recognise and adapt swiftly to environmental changes. This capability becomes essential during industry turbulence, enabling companies to navigate challenges effectively and capitalise on emerging opportunities. While turbulence is often linked to industrial downturns, it’s important to recognise that the observed market changes can result from industry decline or growth.
The rapid growth of the IT sector, related to the fast-changing technology land space, has continued since 1983, which is considered the official birthday of the Internet. IT technology and new business capabilities (because of technological development) have influenced almost all industries.
Technology to drive competitive agility
For many companies, digital transformation has become an instrument allowing firms to identify and take advantage of expanding existing markets, discovering new markets, and establishing new business relationships.
Embracing new IT technology is essential for enhancing competitive agility. By focusing on business innovation, companies can drive meaningful improvements in their performance. Organisations prioritising effective innovation are likely to see higher market valuations, stronger operating performance in the future, and increased stock returns (David Hirshleifer, Volume 107, Issue 3,). This proactive approach positions them for success and fosters a culture of continuous improvement and adaptability.
A mature Agile organisation culture can combine with an adaptive digital portfolio to help firms adapt and navigate new opportunities that emerge as an outcome of the innovation process. Business innovation typically happens at different stages of this portfolio start and should be spotted and nurtured actively by companies. Commercialising this innovation can provide competitive agility from a business perspective. Business innovation does not have a one-size-fits-all formula, but successful organisations set themselves apart with a unique culture that supports the innovation process (Rola, 2024).
What is Generative AI?
Generative AI refers to deep learning models capable of producing text, images, and other types of content based on the data they were trained on. It can be viewed as a machine learning model designed to create new data rather than simply making predictions about a specific dataset (Zewe, 2023).
A generative AI system learns to produce additional objects that resemble the data it was trained with. Generative AI enables users to generate new content based on a variety of inputs quickly. Inputs and outputs to these models can include text, images, sounds, animation, 3D models, or other data types.
How Generative AI Fuels Business Innovation?
With the rise of consumer generative AI programs such as Google’s Bard and OpenAI’s ChatGPT, the generative AI market is expected to experience significant growth. It is projected to increase from a market size of just $40 billion in 2022 to $1.3 trillion over the next ten years (Blumberg, 2023). The growth of artificial intelligence (AI) is one of the greatest emerging technological trends in recent years.
The potential outcome of developing this technology will have an important and long-lasting impact on shaping businesses. More recently, the business landscape has witnessed the growth of Generative AI, a group of AI techniques that leverages relics from existing data to create novel and unique items. Generative AI tools, like the most popular chatbot types, ChatGPT, Gemini, and Poe, present a remarkable opportunity to produce text that closely resembles human writing, unlocking various possibilities in various fields.
While it is essential to consider the ethical and legal implications that accompany these technologies, the advantages they can offer to organisations, society, and individuals are genuinely encouraging. (Y.K. Dwivedi, 2023) By approaching this innovation with careful consideration, we can discover meaningful ways it can enrich the business innovation process itself. Generative AI systems like Chat GPT aim not to replace humans but to assist them in achieving remarkable things. It has the potential to modernise innovations fully (World Economic Forum, 2023).
The following sections will briefly define business innovation and present possible scenarios to enhance the business information process and practical examples for modernising innovations.
Business innovation
Business innovation involves introducing new ideas, workflows, methodologies, services, and products or enhancing those existing within a business context. Fostering imagination and creativity is essential for innovation to thrive. The following model illustrates the relationship between imagination and creativity and outlines how people can innovate in a business environment (Rola, 2024).
Figure 1 Business innovation steps. Author’s elaboration based on (Renzulli, Ronald, Laurel, Brandon i Karwowski, 2021)
The definitions of imagination, creativity, and innovation are provided below.
Imagination is defined as engaging in possibility thinking, considering new alternatives, and generating novel ideas (Craft A., 2014)
Creativity is defined as developing novel and task-appropriate ideas, behaviours, and products that can result in innovative outcomes (Beghetto, 2013)
Innovation is defined as applying creative ideas to behaviours and product development that influence the broader socio-cultural context (Foundation, National Science, 2013)
The following paragraphs propose examples of practices that help organisations enrich each component of business innovation.
Imagination – The Power of Divergent Thinking with AI
Generative AI can act as a vital divergent thinking assistant for your team. Divergent thinking involves producing multiple answers through processes like shifting perspective on existing information (seeing it in a new way) or transforming it, for instance, through unexpected combinations of elements usually not regarded as belonging together (Cropley, 2015). Divergent thinking significantly contributes to product development by fostering the creation of a wide range of solutions. The first and one of the most crucial stages of product development is idea generation. Divergent thinking can be used to encourage the exploration of various product features and functionalities and should be seen as a great o opportunity to innovate.
One of the easiest ways to benefit from Generative AI as a divergent thinking assistant is to invite it to the next brainstorming session. In that case, we will be using hybrid brainstorming. This engaging iterative approach includes two productive brainstorming sessions! Initially, researchers invited ChatGPT to generate a diverse array of innovative ideas. In the subsequent phase, they shared this list and encouraged ChatGPT to select the most unique and bold concepts, fostering fresh and creative combinations. The focus is on enhancing creativity and driving innovation by humans to cooperate with the outcome of the initial
AI Prompt
“Generate new product ideas with the following requirements: The product will target health insurance customers aged 22-55, who are moderately overweight. It should be a digital product available to sell on a web page. I want a product that could be sold at a retail price of less than 100 Euros.
First step: generate a list of 100 ideas (short title only)
Second step: review the list and determine whether the ideas are different and bold; modify them as needed to make them bolder and more different. All ideas should be unique. This is important!“
Results obtained using Chat GPT:
List of AI-generated ideas for digital products.
Creativity – Leveraging AI for Creativity and Design
During the creative phase of new product development, unique designs generated by artificial intelligence can inspire designers to broaden their thinking about what is possible and desirable in a product, encompassing both form and function. This innovative approach can facilitate the creation and design of new products. The product team is encouraged to develop an evolved set of ideas with the assistance of AI.
Following the suggestion from (Tojin T. Eapen, 2023) stable Diffusion, an AI graphics-generating model was utilised to explore various possibilities to enrich creativity. This deep learning model converts text into images, producing high-quality, photo-realistic images that resemble actual photographs using simple text input. Using this tool, several potential designs for toy-inspired shoes were created.
If needed, the product design team can also enlist the support of a creative design assistant to help them tackle various business challenges creatively.
Innovation – Critical Thinking in the Age of Innovation
Many creative people have ideas for new business innovations every single day. Visionary types’ personalities are often attached to their innovation proposal. One of the key skills in that case is well-developed critical thinking and recognising the world may not be so optimistic about your innovation.
The purpose of critical thinking in innovation is to thoughtfully examine ideas, not just to eliminate flawed ones, although that can sometimes be important. This process allows us to identify and address potential shortcomings, transforming these ideas into stronger, more viable solutions. When applied effectively, critical thinking helps ensure that promising ideas are refined and sent back to creative thinkers for further enhancement.
Feedback, as they say, is a gift. Constructive feedback is incredibly valuable because it enables us to assess our performance and highlights important changes we can make to improve. On the other hand, it is a type of feedback that is hard to give and receive, and people often think very emotionally about it; from this perspective, feedback received from AI assistance can be easier to digest, especially if it is built in as a standard process or an innovation process.
The ability to think critically consists of three essential elements (Judy Chartrand, 2018):
- Recognising assumptions. This involves separating fact from opinion
- Evaluating information. This involves stepping back and objectively sorting through different positions
- Drawing conclusions. This involves bringing diverse information together to arrive at conclusions that logically follow the evidence.
Incorporating critical thinking into the innovation process allows us to carefully examine warning signs and red flags, transforming potential challenges into opportunities for improvement. By making critical thinking a fundamental aspect of creativity, we can enhance our innovations and drive them toward greater business outcomes.
Here are examples of prompts that can help in evaluating your idea with Generative AI assistance:
Recognising assumptions
AI prompts
“What information do you need from me to give me the best answer possible?”
“I need you to apply critical thinking and identify assumptions because of which this initiative might fail.”
“For each assumption, please propose specific experiments along with clear success criteria to evaluate whether the assumption holds true. “
“What assumptions am I making about the people, data, or circumstances involved in this situation?”
Evaluating information
AI prompts
“What evidence supports each position? Is it based on facts, opinions, or assumptions?”
“What sources have been used to support these claims? Are they credible, current, and reliable?”
“How does each position align with facts, data, or proven research?”
“Who is presenting this information, and what might be their motivation or bias?”
“Summarise the main findings of this document.”
Drawing conclusions
AI prompts
“What assumptions must be true for this conclusion to hold, and how might these assumptions be challenged?”
“What gaps, inconsistencies, or contradictions exist in the evidence that could weaken this conclusion?”
“How can I test this conclusion against counterarguments or alternative explanations to ensure it is valid and logical?”
“What logical steps connect the evidence to the conclusion, and are there any missing links in this reasoning?”
“Are there any unintended consequences of this conclusion that I need to consider?”
Context and humanity are still necessary
AI continues to struggle with understanding context and interpreting data beyond mere patterns. One key reason for this challenge is that AI cannot grasp the underlying meaning of the data. While it can identify patterns, it cannot interpret them like a human can. AI excels at processing large volumes of data, but it does not comprehend the subtle nuances of the social, cultural, and historical factors that influence this data (Hoffman, 2023).
The rapid growth of generative AI enriches various parts of organisations and raises critical concerns, including ethical dilemmas, fairness, accountability, security, and more. As these technologies reshape workflows and societal interactions, addressing their implications becomes increasingly urgent to harness their benefits responsibly. Ensuring the responsible use of AI should be a top priority for organisations looking to adopt generative AI, as this can help mitigate risks and prevent harm to customers, businesses, and society (KPMG, 2023).
Humanity and context over generative AI are embedded by Amazon, one of the leaders in competitive agility from my perspective. Despite having access to extensive data and metrics, when issues arise, they do not solely rely on numbers. Instead, they seek context and meaning from real-life anecdotes. Interestingly, when data and anecdotes conflict, the latter often proves to be more accurate, as noted by Amazon’s CEO, Jeff Bezos. (Emmi, 2018).
The Future of AI and Business Agility
Businesses must continually evolve to achieve competitive agility. Start small, think big, and utilise AI to advance your innovation efforts. AI can be a crucial enabler of success, whether you are refining business models or enhancing product development.
Innovation doesn’t always require invention. Instead, it can involve modifying your business model and adapting to changes in your environment to deliver better products or services. This adaptability can be considered the cream of the crop in competitive agility.
Machine learning (which has existed since the 1940s) and artificial intelligence (which has existed since the 1950s) are not new technologies. However, they have reached a tipping point and have rapidly evolved in recent years thanks to the evolution of technology in many fields. This evolution, along with new capabilities that come with generative AI, has the potential to trigger significant changes in many industries.
Embracing new IT technology can be essential for enhancing competitive agility. No matter what the technology is (first personal computer, mobile phone, GPS, internet, 4g or 5g network AI), technology is the tool that can help businesses innovate and evolve, and this has proven to be a good way to gain competitive agility.
This article presents examples of using Generative AI as a useful and helpful assistant during process innovation. This can increase and enrich the business innovation process without significantly increasing cost, resources and human effort.
Competitive agility seems to be a necessity for many organisations. Gaining an advantage in that field will be one of the distinguishing features for future business leaders regardless of the scale of the venture. Embracing Generative AI can be a step toward unlocking your business’s potential to adapt quicker to change.
The journey may begin with small steps, but the impact can be profound. If this article resonates with you and encourages you to delve into capability building and business transformation, please feel invited to explore further insights and resources at pawelrola.com.
Your growth journey starts with the first step!
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