Speed and agility are important. Change capacity is what will win

 Everyone is talking about the impact AI will have on business.  AI may make companies more productive, more efficient and possibly more profitable.  AI may lead to fewer employees, cutting costs.  AI may lead to new insights and new products or services.  All of this is well and good.

The problem with all of this AI enthusiasm is that it is not asymmetrical.  If company A has AI and deploys it, company B has access to much if not all of the same technology and will likely be getting much, if not the same, answers.  As everyone moves toward mutually assured AI, where every company has the same insights and the same analysis, AI won't be a competitive advantage for any company, because the ones that are keeping current on AI will all have the same information, and those that did not choose to stay current will wither and die.

So, how do the companies that keep up on the cutting edge with AI win?  If we assume that all of their remaining competitors have the same insight and analysis, who wins?  The answer, interestingly enough, comes back to execution speed and agility.  When everyone has the same insights, the winner will be the company that can execute on the insight very quickly and with great precision.  Moreover, opportunities and markets are likely to rise, become crowded and shift to "red oceans" fairly quickly.  That means that companies that want to win will not only need to execute fast to enter new markets or opportunities and build some differentiators, it will mean that they will need to pivot and move quickly into new markets or opportunities as they emerge.

The importance of speed, or better yet, velocity

The idea that speed will win is not new.  What's different is not just speed but velocity.  Velocity is speed in a specific direction, speed with strategy behind it.  But this isn't a rush to a new strategic position that we'll hold forever.  The days of winning a position, then fortifying it and defending it are likely over.  The new strategy will require getting in fast and first, taking as much of the market share and profit as possible, then identifying new and adjacent or sometimes entirely new opportunities and markets and moving quickly to those.

Speed AND agility

It's also not new to talk about the importance of agility, but what's new is the important of nimbleness and agility combined with velocity.  Most companies have the ability to shift direction and take a new position but expect to take a position and hold it.  AI and its ability to analyze data and project trends will mean that all competitors are likely to spot new opportunities unfolding and many may arrive at the same conclusions at the same time.  The winners will be the few that can execute quickly.  Others may arrive late and need to pivot.  Even the companies that "win" are likely to find that new markets and opportunities open up, so the traditional Lewin model of unfreezing, changing and freezing isn't going to work.

Change is the key strength

If you read the last paragraph closely, you'll note that I referred to what was a trusted change paradigm - to unfreeze from current state, change and then re-freeze.  However, with speed and agility paramount, refreezing isn't going to work.  All of this emphasis on speed and agility will mean that the capacity to change - structures, org charts, positions, jobs, business models - will become very important.

Companies that understand this and incorporate the ability to restructure, reposition, reframe themselves will be more successful in the long run.  Warren Buffet used to describe what happened when the tide goes out - you can see who is swimming without their trunks.  The demand for change and the ability for change will show us who has been giving lip service to the ability to change, and which firms can actually reconfigure, that are built for change.

Fighting the last war

Military planners used to say that our armed forces were "fighting the last war" - that is, they prepared to fight as they had fought previously.  Markets and opportunities will be as evident to one company as to another with AI.  What to offer, how to price, how to serve customers will be child's play as we all adopt AI and it provides insights.  What becomes important isn't size or depth, but speed, agility and the ability to reconfigure, to change as the markets and needs change.  Companies that understand that AI will become a mutually shared capability, and not all that differentiating, will see that speed, agility and the ability to change will be the winning combination.

Implications

If you think about the implications of what I've written, you might get some sense of why the SaaS marketplace is taking it on the nose.  If getting in first and locking up as much of the potential opportunity as possible is important, then switching back to selling a product rather than allowing customers to subscribe to a product would allow companies to lock in value more quickly.

The subscription model works for recurring revenue over time, but what if the winning strategy is to get all you can as quickly as you can?  If my suppositions are correct, we could see a shift back toward selling products and services instead of subscriptions.  We could see an attempt to win as much market share as possible, which could result in lower margins but higher market share.  

Business models, financial models, valuations, service structures could all need to become much more dynamic to align to new market realities.  The real competitive advantage in these situations isn't necessarily predicting what feature or function may need to change, but the ability to change quickly in any direction or attribute.