Until recently, if you said AI could create business strategies, most would laugh you out of the boardroom. But the joke’s on us – AI isn’t just drafting emails, creating power point slides or crunching ad budgets anymore. It’s entering strategy meetings, idea whiteboards, and even investor decks.
So, the big question is: Can algorithms hold their own next-to-human intuition, market experience, and strategic foresight?
A recent comparison between two consulting firms – one traditional and another tech-savvy – showed exactly that. While the seasoned firm, based in America spent a week building a plan for launching a bagel brand in Paris, the AI-supported team generated a viable strategy in under an hour. The AI’s plan wasn’t just fast—it was sharp, surprising, and refreshingly unconventional.
AI in Strategy: A Gimmick or a Game-Changer?
If you’re still picturing AI as a glorified calculator, think again. Today’s AI models—like GPT-4 and Gemini Ultra can absorb vast unstructured data, forecast trends, simulate scenarios, and recommend strategic paths.
And the momentum is only growing. AI-related projects on GitHub skyrocketed from 845 in 2011 to 1.8 million in 2023, while investments in generative AI hit a whopping $25.2 billion in 2023 alone. These aren’t just numbers—they’re signals that AI is here to stay, and it’s gunning for a seat at the strategy table.
Beyond Tactics: Can AI Think Like a Strategist?
It’s one thing to automate repetitive tasks. But can AI truly help navigate strategic ambiguity— where data is incomplete, markets are murky, and intuition rules? Well, AlphaGo’s now-famous Move 37 taught us something: sometimes what looks irrational to us is just too advanced to comprehend—until we catch up. In business strategy, AI has already outperformed entrepreneurs in evaluating and refining startup plans.
What AI Still Can’t Do?
While AI is fast and fearless, it has some blind spots:
- It can hallucinate (yes, literally invent information).
- It can inherit bias, as seen in Amazon’s AI-powered hiring tool which displayed gender bias due to skewed historical data.
- It often aggregates ideas into “weighted averages,” when what you really need is one bold, differentiating strategy.
- In other words, AI brings the data. But only humans bring judgment, ethics, and contextual intelligence.
The Winning Combo: Human + AI
Instead of resisting, forward-looking leaders are learning to collaborate with AI. They’re using it to:
- Ask better questions
- Pressure-test ideas
- Spot patterns humans might miss
- Avoid common biases like “success bias”—over-indexing on past wins like the iPhone while ignoring flops like Google Glass
Think of it this way: AI is the strategy co-pilot, not the captain.
The Conclusion: It’s Not AI vs Humans, It’s AI with Humans
The future of competitive advantage won’t be about choosing between man or machine. It’ll be about learning to think together. So the next time you’re mapping a new market, sketching a bold new move, or just looking for fresh perspective—don’t hesitate to invite AI into the room. It might just surprise you with out of the box ideas and strategies.
Want to dive deeper into this topic?
Read the research-based article – A Tale of Potential collaboration. Will Algorithms and Boardroom Decisions Meet? by Professor Anand Nandkumar and Jai Kumar A fro ISB that inspired this blog.
Authors’ Bios’:
Anand Nandkumar
Associate Professor, Strategy Executive Director – SRITNE
He explores industry and firm level phenomena that influence innovation – the generation of new ideas and entrepreneurship – distribution and commercialization of new ideas. His research focuses on high technology industries such as pharmaceuticals, bio-technology and software, and it falls in between industrial organisation (IO), economics of technological change and strategy. Professor Anand current work in the innovation stream examines the effect of stronger IPR on different aspects of innovation such as the influence of stronger patents on long run incentives for innovation or the influence of stronger patents on the functioning of Markets for Technology (MFT). In the entrepreneurship stream, his current work examines the influence of venture capitalists on entrepreneurial performance.
Professor Anand graduated with a PhD in Public Policy and Management, with a focus in strategy and entrepreneurship from Carnegie Mellon University in 2008. Prior to his PhD, he worked for about 3 years with a start-up in the Silicon Valley and prior to that in New York City with one of the world’s largest financial services firm. True to his expertise, at the ISB, Professor Anand teaches Strategic Innovation Management and Strategic Challenges for Innovation based start-up’s.
Jai Kumar A
Associate Director – Research Initiatives & Projects (Srini Raju Centre for IT , ISB)
He comes up with a highly experienced and robust background in the education management industry. He brings a wealth of knowledge and expertise to his role. He holds a Master of Business Administration (MBA) with a focus on Marketing and Business Analytics from Gitam University, Hyderabad, He holds a Bachelor’s degree in Information Technology from Jawaharlal Nehru Technological University and a Diploma in Project Management from Alison, further solidifying his technical and project management skills. His diverse experience, coupled with his strong academic background, positions him as a distinguished professional in the education management industry, known for his strategic insight, leadership, and dedication to fostering educational excellence. His career trajectory includes significant positions at prestigious institutions.