Reinvention in the age of generative AI
January 12, 2024
January 12, 2024
Why is generative AI different from other technological innovations we’ve seen in recent years? This technology has the power to reinvent every facet of an organization. This is new. Through our work, we see empirical evidence that this trend is already in motion, particularly as generative AI rapidly disrupts every industry.
Organizations are still operating in an unsettled landscape. The annual Accenture Pulse of Change Index found the rate of change affecting businesses has risen steadily since 2019 — 183% over the past four years. In response, 83% of organizations have accelerated the execution of their transformation since last year.
Disruption is up 33% year-on-year
Accenture Pulse of Change: 2024 Index
A small number of “Reinventors” (9%) have already met the high bar of building the capability for continuous reinvention. They’re making swift progress in executing their strategy and setting out to define a new performance frontier with technology at the core of their reinvention journey.
Among the largest companies, especially those with revenues over $50bn, the number of Reinventors has quadrupled in the past year. Industry giants are not standing still. Unlike the digital revolution, the largest companies are taking an early lead, leveraging their substantial investment in building their digital cores and resources. Two industries saw double-digit increases in the number of Reinventors: in software and platforms the figure is up 34 percentage points to 43%, and in life sciences it’s up 13 percentage points to 20%.
Most organizations are still at the beginning of their reinvention journey, with few organizations reinventing at scale today. Similar to last year, the majority (81%) are “Transformers.” Transformers should keep going. They are taking many of the right steps toward reinvention — however, they are less likely to be building sustainable capabilities to reinvent continuously and may be missing the speed and cost efficiencies from a connected strategy of reinvention. And we see a financial performance difference, with Reinventors pulling ahead. The remaining 10% of “Optimizers” are organizations where reinvention isn’t currently a priority.
Reinventors are creating an imperative for others to act.
Generative AI is not your average technology revolution. In the last several decades, we have not seen a technology that has the potential to impact materially every aspect of a company — this is why we connect generative AI and reinvention. For those companies that deploy this technology to its full potential, they will — by definition — reinvent themselves.
Our research shows that most companies apply generative AI in a way that is focused on well-known, no-regret moves like content generation or customer care, with limited focus on novel, strategic bets. But a smaller fraction of companies (Reinventors or future Reinventors) take a more balanced view, focusing generative AI on those no-regret areas, but also putting significant focus on strategic scaled bets as well.
What Reinventors know
Lead with value
Understand and develop an AI-enabled, secure digital core
Reinvent talent and ways of working
Close the gap on responsible AI
Drive continuous reinvention
Shift the focus from siloed use cases to prioritizing business capabilities across the entire value chain based on an objective assessment of the business case, enterprise readiness and the corresponding return on investment. Companies can pursue investments in two categories: table stakes investments that offer radical productivity improvements and strategic bets that offer truly novel advantage including reshaping how industries operate.
Invest in technology that runs seamlessly and allows continuous creation of new capabilities. Generative AI requires a fundamentally different enterprise architecture. Data is more fluid, with unstructured and synthetic data becoming more important. And, with new foundation models being released every week, companies need to use the right models to support each capability. AI-ready applications with a flexible architecture allow you to access a range of foundation models in partnership with ecosystems. Reinventors prioritize their digital core as a key competency.
Set and guide a vision for how to reinvent work, reshape the workforce and prepare workers for a generative AI world. Reinventors are two times more likely than other organizations to anticipate productivity gains of 20% or more in the next three years. Two out of three strongly agree that, with generative AI, work will become more fulfilling and meaningful. Of all the executives we surveyed, 95% agreed that generative AI will in fact create net new jobs in their workforce. And it will mean leaders with different skills, who make change a core part of company culture by giving people a voice in the process.
Design, deploy and use AI to drive value while mitigating risks. The vast majority (96%) of organizations support some level of government regulation around AI, but only 2% of companies have self-identified as having fully operationalized responsible AI across their organization. The gap between intent and execution Is huge, and must be addressed. Closing the gap requires more than a responsible AI framework for risk management and ethical, sustainable use of AI. It requires an actionable plan that moves from commitment and frameworks to action on the ground.
Because change is constant, reinvention never ends. Organizations must drive continuous reinvention. Organizations cannot approach reinvention as a one-time effort undertaken every few years. They must build the capability to continuously reinvent and make the ability to change part of the organizational DNA. It’s a switch that places an enterprise into a state of openness to new thinking, requiring a cultural and operational mindset for continuous change, powered by a flexible digital core that supports generative AI at pace and at scale.
Generative AI has democratized artificial intelligence and made technology much more human-like. This means the pathway to reinvention is much faster than we envisaged even a year ago, as the technology has the potential to redefine entire value chains. Organizations that make bold bets to reinvent while recognizing the importance of blending technology with people’s ingenuity will capture long-term value and build lasting resilience.