Don't Get Left Behind: Why AI is the Future of Business Strategy

When crafting your business strategy, it’s only natural to want to plan way ahead, spending significant amounts of time fine-lining the details of your upcoming annual plan.  

But to what extent is this annual plan actually reliable, directive, and applicable? 

Sometimes, the longer you spend planning your strategy and the longer you try to apply it, the less successful it will likely be. This rings particularly true in today’s market dynamics, where strategies that would’ve led you to success six months ago may ultimately hinder you today.  

To thrive, businesses must combine past and present data to better understand their business direction. Combining this data with trends and simulating scenarios helps them anticipate possible futures and create a fruitful, ever-evolving strategy that adapts to threats, opportunities, and changes brought on by internal and external forces.  

But this is no easy feat — especially when traditional methods for strategy formulation are at play. Not only do these take time and effort, but by the time you’ve finalized your strategy, the facts have already changed, rendering it outdated. 

So, how do you keep your business strategy ahead? By leveraging artificial intelligence (AI) in business strategy. 

In this article, we’ll uncover the power of AI for creating and evolving your business strategy. We’ll highlight its ability to keep you competitive by aligning your business strategy with the broader environment. 

But before we highlight how AI can augment your business strategy, let’s discuss the typical struggles that make developing, executing, and evaluating traditional annual strategies cumbersome.  

Frustration from yearly cycles

A strategy created ahead of time and applicable for an entire year is either outdated, too rigid, slow to respond to market changes, or completely missing the mark. This is because traditional yearly strategic cycles likely base decisions on predictions, internal evolutions, trends, customer preferences, and market changes — most of which may be directionally correct, but almost all of which will deviate, some of them wildly due to unforeseeable (yet hugely impactful) events. 

“If you're wrong about anything in your annual plan, you're probably already too late to fix it.” 

– David Brussin, Founder and Executive Chairman, Monetate 

Misalignment between internal motions and external environment

Given the inherent lag between strategy development and execution with annual planning, businesses face stark disconnects between what they’re doing and how suitable it is to their external environment — be that due to sudden competitive forces, regulatory changes, or technological advancements. This keeps them in constant catch-up, with an ever-present (or constantly widening) gap of missed opportunities and unaddressed threats.  

Read more about the strategy execution gap

Data silos, siloed thinking, and fragmentation

Fragmented business data often results in two outcomes: Teams either spend a lot of time connecting the data dots or no time at all. 

If employees spend too much time in alignment meetings, sifting through incomplete datasets or scouring to find the correct data, they may end up wasting lot of time. Knowledge workers reported spending nearly 29% of their week (11.6 hours) searching for crucial information — time that could’ve been better spent actually doing the work.  

In the second scenario, employees may be impartial to cross-functional alignment. In this case, the business may not act as one, with differing interpretations of outcomes leading to strategic disarray. 

Bias-prone human decision-making 

As much as we’d like to think experience trumps biases, human decision-making is prone to faulty judgments, swayed by biases and susceptible to subjective interpretations. Whether emotions, personal beliefs, external hierarchical structures, or power dynamics, these factors can distort strategic analyses, leading to suboptimal decisions. 

Ineffective performance measurement and evaluation 

A good strategic plan is ever-evolving. Cyclical feedback mechanisms inform, reflect, and direct strategic progress, while strategic adeptness accounts for changing circumstances. As such, ongoing strategic evaluation is vital. 

If business performance and goal progress are not measured constantly and appropriately, a business will struggle to see where its strategy is headed, what the likely outcomes are, and what it needs to do to improve the future state. Poor performance measurement is typically caused by: 

• Outdated or irrelevant metrics capturing the wrong data for current business dynamics and goals 
• Strategic misalignment across objectives, resulting in disjointed efforts and conflicting priorities 
• Inflexible metrics keeping you at a standstill, unable to adapt to evolving business needs and market conditions 
• Improper data collection and analysis lead to skewed insights and misguided conclusions 
• Limited feedback inhibiting continuous improvement and necessary adjustments  

These pain points — outdated or irrelevant metrics, strategic misalignment, inflexible metrics, improper data collection and analysis, and limited feedback — if persistent, can’t just be shrugged off as a one-off bump in the road or a minor strategic mishap. One unaddressed pain point can affect all aspects of business strategy, from development and execution to evaluation.  

How effective is your current strategy? Spot major red flags of strategy failure here.

AI has become increasingly sophisticated in recent years, offering a wide range of applications for diverse business needs across industries, functions, and teams. From enhancing marketing engagement with personalization to improving financial security with prompt fraud detection, AI continues to revolutionize how businesses operate worldwide.  

And while its applications can extend to strategy development, execution, and evaluation, the use of AI in business strategy raises some questions. 

What are the benefits of implementing AI for business strategy? What challenges do businesses face when using AI in business strategy? How can companies effectively leverage AI to reach their desired outcomes? 

Let’s dive into these below. 

Benefits of AI for business strategy

Using AI in business strategy can offer many advantages, empowering informed decision-making, risk anticipation, and efficient operations — all of which contribute to effective strategy development, execution, and evaluation.  

Some key benefits of using AI in business strategy include: 

• Enhancing decision-making by aligning business objectives with company capabilities, resources, and internal context using structured strategic frameworks 
• Enabling real-time analysis of large volumes of structured and unstructured data to uncover valuable insights 
• Predicting and assessing risks across specific contexts and strategic directions 
• Utilizing historical data and predictive analytics to inform future strategies and actions 
• Expediting the transformation of strategy documents and information into concise summaries or actionable plans, facilitating the translation of strategy into tangible results 

Challenges of combining AI and business strategy

While the benefits of AI are vast, businesses may be hesitant to implement AI. This hesitation is heightened when it comes to involving AI in business strategy — a core, fundamental aspect of business operations.  

The most prevalent challenges of implementing AI for business strategy are: 

Distrust and skepticism

Distrust and skepticism surrounding AI arise from concerns around transparency and reliability. Unlike human-led decision-making, AI algorithms often operate as "black boxes” — it’s difficult for stakeholders to understand how decisions are reached. The rapid pace at which AI capabilities evolve — although beneficial — doesn’t help either. Businesses simply don’t understand what AI is truly capable of, fuelling fears of job displacement and loss of control over decision-making processes.  

"When executives think about strategy automation, many are looking too far ahead — at AI capabilities that would decide, in place of the business leader, what the right strategy is. They are missing opportunities to use AI in the building blocks of strategy that could significantly improve outcomes."  

– Yuval Atsmon, Senior Partner, McKinsey & Company 

Data quality

The reliability and quality of strategic insights generated by AI heavily depends on the quality of the data they operate with. If the data is of poor quality — containing inaccuracies, inconsistencies, or biases — a business may create, refine, and execute strategies using flawed or unreliable insights, eroding trust in AI-enhanced strategies and potentially leading to costly errors. 

Insufficient skills and guidance

Businesses may find using AI for business strategy challenging due to a lack of expertise, skills, or structured approaches. Employees skilled in machine learning, data science, and AI engineering are essential for maintaining AI solutions aligned with strategic goals. Without them, a business may not know where to start with leveraging AI. Moreover, the absence of frameworks integrating AI into strategic workflows often leaves businesses unsure about its applicability and sustainability within the company. 

While the benefits of AI for strategic purposes are evident, the challenges that may arise leave businesses feeling doubtful. Overcoming these includes striking the right balance between human and tech-based decision-making.  

One way to do this is by consulting experts in strategy, AI, and technology. These specialists can guide you with incorporating AI into your strategy, ensuring its benefits are fully realized while minimizing risks.  

Within Quantive, we’ve created a team to focus on understanding, building upon, and leveraging AI technology for strategy optimization. This team focuses on experimenting to find the winning combination between technology and human intelligence to reach desired outcomes effectively. 

Need help making the most of AI in business strategy? Read more about Quantive's consulting services here. 

For a unified integration of AI with business strategy, you can use an AI-enhanced strategy management platform. This solution enables the collaborative, unified application of AI at each stage of your strategy, overcoming the issue of siloed tech and data use that typically causes friction, delays, or bottlenecks across strategy management.  

At Quantive, we’ve made it our mission to make data-driven strategy management a competitive advantage for our customers. We’ve created Quantive StrategyAI as a dedicated solution integrating AI throughout the strategic management process. It informs strategic decision-making and outcomes at all levels of your organization, every step of the way.  

See how Quantive StrategyAI streamlines strategy development, execution, and evaluation

AI empowers businesses to evolve from the traditional cadence of strategic decision-making to a continuous one that aligns seamlessly with the pace of business execution. This entails a shift from slow, infrequent, and annual strategic planning — a process typically perceived as complex, requiring thorough analysis, numerous decision frameworks, time-consuming collaboration, and astute stakeholder alignment. 

With AI-based connectivity and data-driven communication, strategic decision-making enters a new era. Decisions can be faster and more accurate, rooted in agility and responsiveness as opposed to the slow pause-reflect-decide-act approach typical with the traditional business strategy cadence. 

As a result, AI emerges as a powerful solution addressing the main pain points and challenges present in traditional strategy planning. Here’s how: 

Proactive optimization and agility

AI-driven predictive analytics can help you understand your business’s direction, offering insights beyond those provided by traditional means. By discerning leading and lagging indicators within complex datasets and identifying anomalies that might bypass human observation, predictive analytics enables your business to face core issues head-on, accurately defining your path to success. 

Risk mitigation and outcome prediction

Scenario planning powered by AI's advanced algorithms and data analysis techniques can help mitigate unforeseen risks and forecast outcomes promptly. This empowers you to confidently — and quickly — navigate uncertainty with pre-emptive and responsive actions.   

Strategy and market alignment

AI is a powerhouse in driving strategic adaptation, processing vast amounts of structured and unstructured data from diverse sources in real time, ranging from company documents to social media, news articles, and industry reports. This empowers you to pivot your strategies according to market needs, regulatory changes, and competitor actions to ensure alignment and stay ahead of the curve. 

"One of the challenges most strategists face is the overwhelming complexity of the world we operate in — the number of unknowns, the information overload... In reality, it [AI] can be a sharp knife that cuts through some of the clutter." 

– Yuval Atsmon, Senior Partner, McKinsey & Company 

Objective decision-making

AI insights powered by information from your business's internal and external context can facilitate bias-free decision-making. These recommendations can inform the next best steps and mitigate biases to enhance the quality of business strategy development, execution, and evaluation. 

Streamlined communication

AI capabilities such as natural linguistic processing (NLP) and machine learning can help you interpret complex strategic concepts, breaking these into actionable steps according to each employee's role and responsibilities. This bridges the gap between top-level strategic objectives and daily operations, empowering individuals to understand, implement, and create initiatives that directly support the wider strategy. 

The old way of managing your business strategy is not cutting it anymore — It’s simply unfit for the current fast-paced environment. The only way to keep up is by keeping your business strategy on the leading edge. 

And with AI, you’re not just keeping the pace. You’re setting it. 

Using AI tools for decision making and business strategy helps you overcome the shortcomings of traditional business strategy development. By facilitating proactive strategy improvements, adaptability, alignment, and data-driven actionability, AI helps you bypass the time-consuming, error-prone, and manually-intensive barriers plaguing the traditional strategy approach. Instead, your business can rely on an agile, refined, and present approach to business strategy — one suitable for sustained success amid the chaos. 

Quantive empowers modern organizations to turn their ambitions into reality through strategic agility. It's where strategy, teams, and data come together to drive effective decision-making, streamline execution, and maximize performance.   

As your company navigates today’s competitive landscape, you need an Always-On Strategy to continuously bridge the gap between current and desired business outcomes. Quantive brings together the technology, expertise, and passion to transform your strategy from a static plan to a feedback-driven engine for growth.   

Whether you’re a visionary start-up, a mid-market business looking to conquer, or a large enterprise facing disruption, Quantive keeps you ahead — every step of the way. For more information, visit www.quantive.com.