Extractive summaries of and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Week 298 | May 26 – June 1, 2023.
Three Lessons From Chatting About Strategy With ChatGPT
By Christian Stadler and Martin Reeves | MIT Sloan Management Review | May 30, 2023
While speculating about the future of AI is irresistible, the more practical question is how we can use it right now. What generative AI could add to the work of business strategists? A series of experiments on different aspects of the strategy creation process suggest three lessons:
- Expect interesting input, not infallible recommendations. In one of the experiments the tool suggested the ideas that matched from a recent workshop held in a European country. The tool was also able to provide business models and cost estimates for these business ideas. On the one hand, this is impressive. At the same time, it highlights that the tool seems unlikely to come up with ideas humans can’t, although it gets results faster and with less effort. In another experiment, it also became obvious that humans are better at translating ideas into actions. Still, LLMs can be helpful in the strategy process for a few key reasons: they are fast and easy to use, the tendency toward conventional thinking can be mitigated by asking the right follow-up questions, and it’s easy to generate many ideas.
- Experienced strategists will benefit most from ChatGPT. ChatGPT acts like a worldly-wise and persuasive friend who is prone to overconfidence to the point of sometimes asserting fiction as facts, either because errors were present in the initial training set or through some emergent process that experts are still trying to understand. While it would be foolish to rely unquestioningly on the advice of such a fallible friend, its suggestions could in fact be very useful in several ways, provided we fully apply our powers of judgment. The main attraction of ChatGPT in strategy work is probably its ability to write well, complementing the blind spot of many strategists.
- Strategists use different data and use it differently. ChatGPT processes billions of data points to construct output. This might create the false impression that it exceeds the cognitive capacity of humans. It’s easy to overlook the limitations imposed by the lack of transparency into the exact nature of this data set and its gaps. Strategists often rely heavily on proprietary information, since effective strategies must uniquely reflect the position and capabilities of each company. We know for sure that current tools don’t have access to such inside knowledge. It is, therefore, not surprising that ChatGPT’s answers are somewhat generic — more or less according to the textbook, but lacking spice.
3 key takeaways from the article
- While speculating about the future of AI is irresistible, the more practical question is how we can use it right now. What generative AI could add to the work of business strategists?
- A series of experiments on different aspects of the strategy creation process suggest three lessons: Expect interesting input, not infallible recommendations, Experienced strategists will benefit most from ChatGPT, and Strategists use different data and use it differently.
- ChatGPT and similar tools are more likely to be useful in particular steps of strategizing (like idea generation and storytelling) and to experienced strategists rather than naive beginners. Such tools are, therefore, no substitute for the cultivation of strategic minds. And just as airline pilots must avoid over-relying on an autopilot, would-be strategists must avoid impeding the development of their own discriminating powers.
Topics: Strategy, Technology, Artificial Intelligence