Competing in the Age of AI

Strategy and Leadership When Algorithms and Networks Run the World

by Marco Iansiti , Karim R. Lakhani

Number of pages: 280

Publisher: Harvard Business Review Press

BBB Library: Booklets

ISBN: 978-1633697621

About the Authors

Marco Iansiti : Prof. Iansiti's research examines the digital transformation of companies and industries,


Karim R. Lakhani : Karim R. Lakhani is the Dorothy & Michael Hintze Professor of


Editorial Review

AI (Artificial Intelligence) is quickly turning into the new foundation for businesses, defining how companies operate and execute their tasks. The first big implications of AI on our society are not in simulating humanity, but rather in transforming our organizations and the way they shape our world. To bring about these changes, AI does not need to copy human behavior- they only need a weak AI that is capable of performing tasks humans can do, like analytics and data processing.

Book Reviews

“Marco Iansiti and Karim R. Lakhani show how reinventing the firm around data, analytics, and AI removes traditional constraints on scale, scope, and learning that have restricted business growth for hundreds of years. From Airbnb to Ant Financial, Microsoft to Amazon, research shows how AI-driven processes are vastlymore scalablethan traditional processes, allow massivescope increase, enable companies to straddle industry boundaries, and createpowerful opportunities for learning--to drive ever more accurate, complex, and sophisticated predictions.”

“The authors analyzed the A.I. capabilities of hundreds of firms, and some of the best parts of “Competing in the Age of AI” are those case studies. The discussion of Satya Nadella’s turnaround of Microsoft is particularly revealing. But their sweeping conclusions often feel overblown and sometimesinconsistent. And the authors use Amazon as the poster child of a company for which “almost every human interaction is removed from the actual critical path in service delivery.” But that feels like a stretch given the company’s roughly 600,000employees.”

“AI Strategy: Iansiti and Lakhani talk about how crucial it is to have an AI strategy that is in line with the overarching objectives of a company. They underline how important it is for business leaders to comprehend how AI will affect their sector and organization. The book examines how AI can fundamentally alter a company’s business model in “The AI-Driven Business Model.” It talks about instances of businesses that have used AI to successfully develop new value propositions and revenue sources. Iansiti and Lakhani explore the relationship between networks and ecosystems in the era of artificial intelligence. They describe how AI can boost network effects and promote cross-organizational cooperation.”

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Wisdom to Share

Digital operating models that depend on AI are transforming the competition of industries in a completely new way.

Algorithms look at transactions to judge how competitive a business is and judge accordingly. Analysts even feed the AI data on a user’s communications to assess “relationship quality.

The AI Factory The core of Ant Financial, and the modern firm in general, is a process called an AI Factory.

You don’t have to be a big company to build an AI Factory. In the Laboratory of Innovation Science at Harvard, people have developed an AI system that maps the shape of tumors based on CT scans.

Strategy for a New Age In the late 90s, physicist Albert-Laszlo Barabasi observed the structure of the Internet, and found that there was a percentage of network nodes that were becoming much more connected and relevant than others.

The tremendous amounts of data can also be hijacked or stolen by cyberattacks, threatening the privacy of the consumer.

Technology improves at a relentless pace, with no signs of slowing down. Even if AI never totally catches up with human thinking, digital systems will take over an increasing number of tasks now performed by humans.

As traditional structures are broken down, relationships of power will change, and some skills and functions will lose their relevance. It becomes entirely critical for the leadership to be all in, to be totally committed to leading the transformation.

The impact of senior roles cannot be understated, but now more than ever, anyone can rise to a crucial role.

Today’s leaders need to deal with constant and frequent change, with companies collaborating and colliding in the market. The greater the wisdom, the better the outcome for all of us.