As business strategists, Christian Stadler and Martin Reeves – from MIT Sloan Managment Review, wanted to see what generative AI could add to their work. They explored this question through a series of experiments on different aspects of the strategy creation process.
In each of the experiments, they put a realistic question of strategy to ChatGPT, followed by a lengthy back-and-forth to refine the initial responses. The intention was to understand how the tool can support ideation, experimentation, evaluation, and the building of stories – and where it falls down.
They derived three key lessons from their experiments:
- Expect interesting input, not infallible recommendations: ChatGPT was able to suggest disruptive business ideas and provide business models and cost estimates. However, it was unlikely to generate ideas that humans couldn’t conceive. While the tool is faster and requires less effort, it lacks the ability to translate ideas into actionable plans, especially considering the nuances of different corporate realities.
- Experienced strategists will benefit most from ChatGPT: ChatGPT can be a valuable resource for experienced strategists who apply their judgment and discernment. The tool can provide insights, characterize competitive environments, generate strategy-based ideas, simulate different strategies, and assist in creating engaging stories. However, its fallibility requires strategists to exercise their own discretion and ask the right questions to avoid being misled.
Strategists use different data and use it differently: ChatGPT processes a vast amount of data to generate output, but it lacks access to proprietary and inside knowledge that strategists often rely on. The tool’s answers tend to be generic and lack the spice of unique company-specific information. Additionally, strategists often rely on anomalies and analogies, which ChatGPT does not seem to handle well. The framing step in strategy development, where strategists distinguish useful fictions from misleading ones, is a crucial skill possessed by experienced strategists.
Overall, ChatGPT and similar AI tools can be useful in specific steps of the strategy process, such as idea generation and storytelling, but they should not replace the cultivation of strategic thinking. Experienced strategists should use these tools as aids while applying their own discernment and critical thinking skills. Click the link below to review the full article by MIT Sloan Managment Review.
