CHAPTER 1
Embracing the AI-First Era

In today's rapidly evolving technological landscape, we've seen buzzwords like cloud first and mobile first dominate the conversation over the past decade. These first focuses were all about the technology.

But today, let me introduce you to the new mantra that's transforming the way we think about business: AI-first. Why is this shift so crucial? Artificial intelligence (AI) isn't just about technology; it's a transformative force that's changing our lives at an incredible pace, redefining how we connect, work, and experience the world around us. I've seen firsthand how AI can improve lives, from simplifying daily tasks to providing insights that were once unimaginable. For instance, using AI to analyze health data has given my family critical insights that helped manage a chronic illness more effectively. It's personal because I've experienced the positive impacts and believe in its potential to create a better future for everyone.

The AI-First Mindset: A New Paradigm

Think about a future where AI is deeply embedded in our daily lives. Imagine a humanoid robot arriving at your doorstep to deliver a pizza. But this is not just any delivery service-it's an AI-driven experience. The robot doesn't just hand you the pizza and leave. It walks into your home, sets the table, pours the drinks, and serves the pizza. When the meal is over, it even cleans up, selecting the right dish soap and doing the dishes for you.

This might sound like science fiction, but it's a near-future reality. The implications for brands are profound. If a robot is serving your drinks, do you need to market to the company that makes the robot? Does the AI decide which product to use based on pre-programmed preferences? How do companies like Coca-Cola or Pepsi adjust their strategies when the point of consumer interaction shifts from human to robot? These are the questions that AI-first leaders must ponder.

Just yesterday, I was at the dentist, and instead of the usual manual examination, they used an AI-powered tool for tooth recognition. This device scanned my teeth and identified potential issues with pinpoint accuracy. Interestingly, it wasn't the dentist who operated the AI tool but the dental hygienist. When I asked her how she felt about it, she said, "I was so intrigued that I took two classes on AI to understand how to use it better." This shows how AI is not just replacing roles but transforming them, requiring new skills and training.

Consider another innovation-mood jackets. Remember mood rings from the past? These jackets work on a similar principle but are far more advanced. They sense your emotions and physical states, such as when you're hot, cold, or sad. In factories in Asia, they are being tested to determine the best break schedules for workers based on their physiological data. This raises important questions for managers: How do you manage change when implementing such personal data-driven technology? How do you explain to employees that their jackets are monitoring their moods and breaks?

These scenarios aren't some distant future-they're happening now. AI is already making breakthroughs, like in the mining industry, where an AI system discovered a significant copper deposit in Kenya.

A forward-thinking exploration company used AI to analyze massive geological datasets. Traditionally, mineral exploration is labor-intensive and slow, but AI changed the game. The system processed satellite images, geological surveys, and historical mining data, identifying a high-potential region in Kenya. When the company verified the findings on the ground, they uncovered a major copper deposit. This breakthrough is set to boost Kenya's economy and create jobs, proving AI's transformative power in resource exploration.

This isn't just about technology; it's about revolutionizing industries. AI enhances precision, accelerates discoveries, and minimizes environmental impact. The discovery in Kenya showcases AI's potential to solve complex problems and open new opportunities.

The message is clear: we can't resist AI. It's time to learn and adapt. AI-first isn't just a strategy-it's a fundamental shift in business and technology thinking.

What It Means to Put AI-First

So, what does it mean to put AI-first at the heart of your business strategy?

Adopting an AI-first approach means deeply integrating AI into the fabric of your organization's decision-making processes, operations, and customer interactions. It's about leveraging AI as a fundamental driver of innovation, efficiency, and competitive differentiation. "Innovation in the future means applying a layer of AI to everything you do," commented Kevin Kelly, cofounder and senior maverick at Wired magazine.1 He discusses this topic in his Ted Talk about the pervasive impact of AI across various aspects of our lives and industries.

But how do you go about doing this?

When you adopt an AI-first strategy, AI becomes the engine of innovation within your organization. This could mean using AI to develop new products or services that were previously unimaginable. For instance, consider Netflix. They use AI to personalize content recommendations, thereby enhancing user experience and keeping customers engaged. Their AI algorithms analyze vast amounts of viewing data to predict what you might want to watch next, ensuring a personalized and satisfying user experience. This level of innovation was made possible by embedding AI into their core business strategy.

This means that one principle is that AI, combined with humans, should be a driver of innovation.

AI-first also means using AI to streamline and optimize your operations. Take Amazon as an example. They use AI-driven robots in their fulfillment centers to automate the sorting and packing of products. This integration of AI not only speeds up the delivery process but also reduces operational costs, allowing Amazon to maintain its competitive edge in the e-commerce market. By leveraging AI, Amazon continuously improves its operational efficiency, setting a high bar for logistics and supply chain management.

Customer service is another area where an AI-first approach can transform business operations. Traditional chatbots often provide scripted responses that can frustrate customers more than they help. However, AI-powered systems, such as those used by Apple's Siri or Google Assistant, engage in more sophisticated interactions. They learn from each interaction to provide more accurate and personalized responses. This capability goes beyond mere automation, creating new opportunities for meaningful and engaging customer experiences.

Embracing an AI-first strategy means more than just adopting new technologies; it's about fundamentally rethinking how your organization operates and competes. It involves a strategic shift toward leveraging AI as a driver of innovation, efficiency, and customer engagement.

But not the only driver. Humans are critically important. We will still want handcrafted items from the farmer's market. The goal is to ensure that AI becomes a key component of your business strategy with your teams. Humans bring unique characteristics that will always be part of the narrative of a company's success.

As we navigate the AI-first era, the most successful organizations will be those that can integrate AI into the crucial facets of their operations while balancing it with the invaluable contributions of human insight and creativity. By doing so, they will not only stay competitive but also lead the way into the future of business and technology.

Examples of AI-First Success

Organizations that excel with AI-first strategies tend to share common traits: they will integrate AI deeply into their operations, enabling it to drive innovation and efficiency across multiple facets of their business. (I say will as most companies today have not matured enough to integrate AI deeply into operations.) They will prioritize AI as a key component of their decision-making processes, enabling them to anticipate and respond to market demands more swiftly and accurately. (See Appendix A for a simple AI marketecture.)

Moreover, these organizations see AI not merely as a set of tools but as a transformative force that fundamentally reshapes how they deliver value to their customers. By fostering a culture that embraces continuous learning and experimentation with AI, these leaders position themselves to not only keep pace with technological advancements but to also set the pace in their respective industries.

• Healthcare: In the healthcare sector, SimBioSys developed TumorScope, a simulation engine that uses diagnostic data to create virtual replicas of individual tumors. It predicts responses to therapy, assisting physicians in personalized treatment planning.
• Retail: Retailers like Zara use AI to optimize their inventory management and predict fashion trends. Their AI systems analyze customer behavior, social media trends, and sales data to forecast demand for different products, ensuring that they stock the right items at the right time. This AI-driven approach helps Zara stay ahead in the fast-paced world of...