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Why Portfolio Companies Must Embrace the Gen AI Revolution — Now!

New Bain Global Private Equity Report Sees Gen AI is a Game-Technology for Portfolio Companies in Value Creation

Capturing the immense power of Generative AI to drive value creation is on the agenda of most private equity-backed CEOs. As the transformative force of our time, Gen AI is not just redefining the nature of work; it’s reshaping entire industries and disrupting business as we know it. Sooner or later, this revolutionary technology will impact every industry, every company, and the job of every knowledge worker.

The urgency to lean into Gen AI is resoundingly affirmed in the recently released Bain Global Private Equity Report 2024. In the chapter Harnessing Generative AI in Private Equity, Bain observes that Gen AI is asserting itself as a game-changing technology across the global economic landscape. They envision it being rapidly deployed in portfolio companies to drive:

Operational efficiency. AI tools enable portfolio companies to streamline operations, automate routine tasks, and optimize labor use, leading to significant cost savings and operational efficiency gains that directly impact the bottom line.

Talent acquisition and optimization. Gen AI can augment the capabilities of existing staff, empowering humans to focus on higher-value activities while AI handles more routine tasks, thereby optimizing talent utilization and unlocking hidden potential.

Market competitiveness. Early adopters of Gen AI can seize a powerful competitive edge in the market by enabling innovations that outpace rivals and disrupt traditional business models, positioning themselves as industry leaders.

Improved decision making. Gen AI turbocharges decision-making by providing comprehensive data analysis that uncovers insights not immediately apparent through conventional methods, enabling leaders to make smarter, more informed choices.

Customer Interaction. AI can revolutionize customer service and engagement through more personalized and responsive communication tools, driving customer satisfaction and retention rates to new heights.

Value Creation. Implementing AI-driven solutions can directly contribute to value creation by enhancing product offerings, improving service delivery, and creating entirely new revenue streams that propel growth.

The CEOs of PE-backed portfolio companies that I coach and consult are leaning into Gen AI with fervor. While the potential benefits touted in the Bain report are undeniably attractive, they don’t materialize automatically (a point Bain glossed over). To make those transformative strides requires significant training, practice, and widespread adoption of Gen AI across your entire organization.

When I train leaders on Gen AI, I introduce them to the Gen AI Essentials Pathway, a powerful learning protocol that emphasizes the foundational elements necessary to build Gen AI literacy, proficiency, and adoption skills. It encompasses five steps:

In the training, all knowledge workers (including the CEO and C-suite) discover how to select and use large language models (LLMs) and how to craft prompts that elicit excellent outputs. They learn the three powerful personas they can leverage to harness the full potential of Gen AI: as an assistant, a strategist, and a creative force. They practice writing targeted prompts that deliver exceptional results. They are introduced to fifteen high-impact use cases and corresponding prompts that are invaluable for leaders and managers. Then, they conduct workflow audits of their critical objectives and tasks to identify use cases where Gen AI can be applied to maximize brainpower and human potential.

Before embarking on any task, they start by asking, “Can Gen AI help me with this?” As the training concludes, they are invited to participate in the 30-Day Challenge. I share examples of individuals who have dedicated just 30 minutes a day to Gen AI for 30 days, developing a new, indispensable habit that results in significant productivity gains, time savings, and better decision-making. A goal of a 20% productivity increase is established as a starting point.

We reconvene a month later to share our learnings and breakthroughs. Many participants report productivity improvements that exceed the initial 20% target. We dive into the use cases they are applying, the AI tools they’ve experimented with, the remarkable results they are achieving, and the exciting next steps on their Gen AI journey. Suggestions and best practices are freely shared, all in a spirit of discovery, learning, and leaning into this extraordinary new superpower. We discuss pain points and opportunities across the company where Gen AI can make a transformative impact, and then prioritize high-potential projects. They receive additional training, collaborating to apply Gen AI in innovative ways. Then we rinse and repeat, building their Gen AI capability that puts them on the path to delivering the game-changing benefits described by Bain.

If you want to get your people excited about Gen AI, you have to answer their first question: “What’s in it for me? “ When they see how Gen AI can help in their personal workflows to save time, help them make better decisions and do higher quality work, then they’ll be ready to tackle the company’s opportunities and challenges. Start by showing them how Gen AI can make their lives better.

A soldier isn’t forged without the crucible of bootcamp. A major league baseball player doesn’t reach the pinnacle of their sport without the rigors of spring training. Similarly, your team members won’t become Gen AI powerhouses without proper training and support. If you truly want to reap the rewards that Gen AI promises, invest in providing everyone with a solid foundation through comprehensive training and a robust learning process. Fail to do so, and you risk being left in the dust by competitors who are seizing this once-in-a-generation opportunity.

The Gen AI revolution is here, and the time to act is now. Portfolio companies that embrace this transformative technology and invest in building their Gen AI capabilities will be the ones that thrive in the new era of business. Don’t let this moment pass you by. Lean into the power of Gen AI, train your team to harness its full potential, and watch as your company soars to new heights of efficiency, competitiveness, and value creation. The future belongs to those who dare to embrace it — will you be among them?

What’s The Best City in the US for a Medtech Hub?

Here’s What ChatGPT Recommends …

In a recent Executive AI Bootcamp, our group of 25 CEOs discovered how to use Gen AI to enhance their strategic capabilities. We chose a use case of  selecting the best SMSA to locate a research and development center for a respiratory products medtech company, backed by private equity, that sought to become the market leader in its sector. ChatGPT gave us its recommendation, based on a set of criteria we provided.

That’s a timely, real-time use case it turns out, with a little twist.

Under the 2022 CHIPS and Science Act, the US Department of Economic Development, will award ten tech hubs in the US a $40-70 million investment. The goal is to invest in regions that have the potential to be global powerhouses, leveraging their technology, today and in the future, to grow employment and revenue.

The CHIPS and Science Act initiative brings together diverse stakeholders from the public, private, and academic sectors. The desired outcome will create Tech Hubs that build the workforce of the future, enable businesses to start and scale, and deploy and deliver critical and emerging technologies.

Medical technology has been identified as a key focus area. A recent Twin Cities Business article, Minnesota’s Campaign for MedTech Prominence, profiled several local medical device CEOs and others on the topic, who are lobbying for the Greater Minneapolis-St. Paul SMSA to be chosen for a tech hub. So, let’s put it to the test.

I prompted several Gen AI large language models to provide the right answer. Modifying our prompts from the AI for Strategy session at the bootcamp, here’s the prompt fed to ChatGPT4, Claude Opus 3 Haiku and Perplexity for the definitive recommendation.

Spoiler alert. ChatGPT4 chose Minneapolis-St. Paul as the overall winner. But not without some controversy. The other LLMs had different ideas.

Play the role of a skilled panel of judges with deep medtech / healthtech industry experience. The judges are considering the following metropolitan areas for the “smart med” designation. The overall winner will receive investment from the CHIPS and Science Act. The cities are: Boston, Minneapolis-St. Paul, Research Triangle Park, San Diego, Orange County, CA, San Francisco-Bay Area, Seattle and Austin.

Please do a broad-based assessment that includes the following factors:

  1. Supply of labor and skilled medtech human capital.
  2. Local tax situation and business climate.
  3. The health of the medtech/healthtech ecosystem of each SMSA, to include the size and impact of medtech / healthtech companies, the quality of nearby universities, the quality of healthcare providers, healthcare insurers and availability of venture capital firms.
  4. Ease of transportation and infrastructure.
  5. Community support.
  6. Quality of life and affordability.
  7. Other considerations you may identify.

Present a summary for each city. Create a table that evaluates each SMSA on these factors. Provide an overall recommendation of your top 3 finalists. Finally, choose an overall winner.

Here’s how the LLM’s responded:

ChatGPT4

Overall Winner: Minneapolis-St. Paul

Recommended Medtech Hub Finalists: Boston, Minneapolis-St. Paul, Research Triangle Park

Claude 3 Opus Haiku

Overall Winner: Boston

Recommended Medtech Hub Finalists: Boston, Minneapolis-St. Paul, Research Triangle Park

Perplexity

Overall Winner: Boston

Recommended Medtech Hub: Boston, San Diego, Minneapolis-St. Paul

The most widely used LLM, the workhorse of Gen AI, ChatGPT, chose Minneapolis-St. Paul as its recommended winner. The other two LLMs chose Boston. Both Minneapolis-St. Paul and Boston were mentioned in all three, while Research Triangle Park was mentioned twice and San Diego once.

What do you think? If you were the distinguished panel of judges, which city would you pick for investment as the premier medtech hub in the US?

Narratives of Tomorrow: Merging AI with the Art of Storytelling

Are You Leveraging AI to Tell Your Leadership Stories?

In our Executive AI Bootcamp, a cohort of twenty-five CEOs has gathered weekly every Thursday in February for a fast-paced hour of learning, featuring guest speakers and interactive Q&A. In last week’s session, we delved into “AI for Teams,” uncovering strategies to enhance productivity and the quality of work among top leadership teams. We explored a four-step process designed to optimize both functional and cross-functional teamwork, as well as to streamline processes using Generative AI to augment team workflows. The key takeaway was the importance of blending technology with a human touch to achieve the desired outcomes and experiences.

Our focus in Executive AI Bootcamp has predominantly been on practical, actionable use cases within the C-suite. However, we’ve also explored how Gen AI is being innovatively applied in ways that could indirectly benefit this group of high-powered leaders. This exploration was enriched last week by a visit from Erich Archer, an Emmy-award winning creative executive and content strategist, known for his exceptional storytelling skills.

 

The power of storytelling, an art as old as time, is undeniable. Storytelling is baked into our DNA. Our ancestors were weaving tales 30,000 years ago, capturing hearts and minds to influence and persuade. Think of the best CEOs you know. They are likely skilled storytellers.

Erich Archer stands out as a master storyteller.  As the executive director for 1623 Studios, a nonprofit community media center in Gloucester, Massachusetts, storytelling is at the core of Erich’s profession. Recently, he has been merging his passion for storytelling with Gen AI. He introduced us to great-great-great-great grandfather, Rufus Archer, who lived in nearby Salem from 1812-1909. Rufus was a cooper (a barrel maker) and volunteer fire fighter.

Using a few old pictures his father passed along of Rufus, Erich combined his storyteller’s imagination with the technology of Gen AI to create a documentary in the style of Ken Burns. This project included:

  • Writing the script with ChatGPT4.
  • Researching historical events with Perplexity.
  • Generating lifelike images from the photographs with Midjourney.
  • Producing a video from these images with RunwayML.

This innovative blend of Ai technology and storytelling crafted a captivating two-minute video, which transported us back in time, making Rufus Archer’s story come alive. Erich showed us what is possible when we combine AI technology with a good story. He created his production in about twenty hours for less than $200 on his laptop.

Will Gen AI eliminate the need for human storytelling? Absolutely not. The essence of leadership often lies in sharing a compelling vision of the future, sometimes by drawing on our past and the timeless values of our ancestors. Erich’s project serves as a profound example of how we can marry humanity with technology to engage and inspire. To experience the Rufus Archer story and learn more about how Erich crafted his remarkable piece, visit his LinkedIn page.  ​Watch the full video and read how Erich made it here.

Isn’t it Time to Boost Your Company’s Strategies with Gen AI?

Two Ways of Infusing AI to Optimize and Accelerate Your Business

Your job as leader is to create value in a sustainable way.  That requirement is about to become impossible if you don’t effectively embrace Gen AI.

Gen AI is the most powerful technology of our lifetime. If you aren’t leveraging it in your business, you are on the fast track to obsolescence. Gen AI is radically changing every industry, every company and nearly job. And that includes your job, CEO.

It’s imperative to get in the game. You simply can’t wait as your competitors will pull ahead of you and create an insurmountable lead.

Consider the findings of recent CEO studies:

  • 99% of companies plan to increase investments in Gen AI. – Accenture
  • 97% believe that Gen AI will transform their business over the next 3 to 5 years. – Accenture
  • 62% of CEOs acknowledged the urgent need to act on Gen AI to maintain a competitive edge, yet 61% find it challenging to initiate this shift. – EY
  • 49% of CEOs say Gen AI will create new revenue streams in the next 3 years. – PwC
  • Executives launching Gen AI in 12 to 18 months expect 15.7% cost savings and 24.7% productivity improvements. – Gartner

How are you infusing Gen AI into your company’s strategy?

Two ways to bolster your company with Gen AI is to optimize your operations and accelerate performance metrics like revenue growth, gross margin, EBIDTA, expense reduction, sales per employee, customer experience, and employee engagement.

To take advantage of Gen AI, you must know its five superpowers. They are:

  1. Generate text, images, audio, code or video.
  2. Synthesize text, images, video, data, code or audio.
  3. Generate ideas and be a thought partner.
  4. Complete tasks as a copilot.
  5. Interact with users.

Here’s what to do. Log into ChatGPT4 or your favorite LLM, copy and paste this text to discover suggestions for optimizing your company’s operations.  You’ll need to fill in a few details below to provide context.

“You’re the knowledgeable advisor to the CEO. Our company is a _______ to the ______ industries. We sell directly to ______ through this (distribution channel). I’m brainstorming ways to use generative AI to optimize my company, making our internal processes more efficient. I want ideas in five categories:

  • Ways to use Gen AI’s capabilities to generate text, images, audio or video.
  • Ways I can use Gen AI’s capabilities to process or synthesize text, image, video, data or audio.
  • Ways I can use Gen AI’s capabilities to generate ideas or be a thought partner.
  • Ways I can use Gen AI’s capabilities to complete tasks as a copilot.
  • Ways I can use Gen AI’s capabilities to interact with users.

Can you brainstorm ideas in each of the following categories for me?”

As you receive suggestions that spark your interest, follow up with prompts to dive deeper and gain more specific information.

Now that you’ve got ideas to optimize your business, ask Gen AI for suggestions to accelerate your company’s performance.

Use this prompt on ChatGPT 4 or your preferred LLM:

“You’re an advisor helping me decide how to incorporate Gen AI into my product (or service), based on the metrics that I want to drive. My company is a (company description) that sells (product description). We have (#) metrics we’re trying to drive: (list metrics)

Can you give me suggestions for Gen AI-powered initiatives that I can implement into my product (or service) to drive these metrics? Can you brainstorm ideas in each of the following categories for me?”

  • Ways to use Gen AI’s capabilities to generate text, images, audio or video.
  • Ways I can use Gen AI’s capabilities to process or synthesize text, image, video, data or audio.
  • Ways I can use Gen AI’s capabilities to generate ideas or be a thought partner.
  • Ways I can use Gen AI’s capabilities to complete tasks as a copilot.
  • Ways I can use Gen AI’s capabilities to interact with users.

Optimizing your operations and accelerating the performance of your products, services or company are two use cases that Gen AI is particularly well-suited for. These are classic examples of what I call Everyday AI.

Use these two prompts to get in the Gen AI game and begin creating the massive value that is your company’s right to create.

One other important fact. When you augment your business with Gen AI, you increase your company’s valuation.  CB Insights, the business analytics platform that provides market intelligence on private companies, just reported the following valuation premiums for venture-backed companies that are AI-augmented vs. those which are not AI-augmented in 2023.

  • Seed stage – 21% premium
  • Series A – 39% premium
  • Series B – 59% premium

Firms that are established and have a strong commercial presence will also increase their valuations as they lean towards becoming AI-driven. Gen AI makes every company a technology company.

It’s time to get in the Gen AI game? You can’t sit on the sidelines. If you aren’t sure where to start, shoot me a message.

The Starting Gun Has Fired…

There will be CEOs who are winners and losers. What about you?

The sprint has begun. If you’re not moving, you’re already falling behind.

For CEOs, the time to act is now. Gen AI is on the brink of transforming every industry, every company, and every knowledge worker’s role – including yours, CEO.

Leaders with vision are already on their feet, ensuring their teams and themselves are versed in the essentials of Gen AI.

They recognize the seismic shifts in work, seeing Gen AI not as a threat but as an ally to boost productivity, improve decision-making and elevate the quality of work.

I’m not the only one who sees it this way. Consider these insights:

  • 99% of companies are boosting their Gen AI investments.
  • 97% anticipate Gen AI will transform their business within three to five years.
  • A 20% productivity pickup is expected by automating tasks with Gen AI, says Accenture.
  • According to McKinsey, Gen AI tops the list of CEO priorities in 2024.
  • PwC reports that 84% of leaders believe Gen AI will streamline employee efficiency in 2024.
  • Gartner predicts Gen AI will deliver a 15.7% cost savings and 24.7% boost in team productivity within 12 to 18 months.

The future will herald victors and vanquished. Neglecting Gen AI as a top priority spells defeat. Delaying, failing to properly train, allowing rivals to forge ahead. What’s the price you will pay if you sit on the sidelines?

Last week, I launched a Gen AI series for twenty-five CEOs. Executive AI Bootcamp is a hands-on dive into harnessing Gen AI for productivity, strategy formulation, team enhancement, and leading into the Gen AI era. Despite 80% starting as beginners, they’re on track to becoming Gen AI powerhouses. They recognize the necessity and the immense opportunity to lead through this transformative era.

What will your Gen AI narrative be? Victor or vanquished. Sitting out puts you in peril. What’s your next move?

The Future is Now: Training is Critical to Navigate the Gen AI World

CEOs Must Get Trained to Chart Their Company’s Gen AI Path

At the World Economic Forum’s Annual Meeting in Davos earlier this month, several major consulting firms highlighted the promise of Generative AI. The key takeaway: Embrace Gen AI now or risk obsolescence! Selected findings:

  • 99% of companies plan to increase investments in Gen AI. – Accenture
  • 97% believe that Gen AI will transform their business over the next 3 to 5 years. – Accenture
  • 49% of CEOs say Gen AI will create new revenue streams in the next 3 years. – PwC
  • 44% of working hours are ripe for AI-augmentation or automation. – Accenture
  • Executives launching Gen AI in 12 to 18 months expect 15.7% cost savings and 24.7% productivity improvements. – Gartner
  • Headcount reductions from Gen AI implementation are projected to be 3.8% in 2024, 6.1% in 2025 and 8.2% in 2026. – Gartner

The message is clear: Gen AI adoption is accelerating. However, most employees feel unprepared:

  • 61% of workers will need retraining by 2027. – World Economic Forum
  • 60% of white-collar workers fear jobs loss from Gen AI. – Oliver Wyman
  • 57% report insufficient Gen Ai training from their employer. – Oliver Wyman
  • 57% are overwhelmed about integrating AI into their roles. – edX

So what’s a forward-thinking CEO to do? Get trained on Gen AI yourself first. Discover firsthand how it augments productivity, strategy and creativity. See how it enhances decision-making and saves time. Then, get your top team trained on real-world AI applications.

With you and your top team AI-enabled, have informed discussions about your Gen AI ambition. Where’s the potential? What possibilities exist? How can AI augment strategies and create better futures? What work is off-limits to Gen AI? What new skills are needed? How will you reskill your people?

The Executive AI Bootcamp starting February 1 is an excellent first step for CEOs. Check it out. If you are a CEO, and desire to lean into an AI-powered future, join us.

 https://www.youtube.com/watch?v=dO9x8yyyMeE

Here’s Why Smart CEOs are Embracing Gen AI

Twelve months after the launch of generative AI large language model ChatGPT, one thing is certain. Gen AI has been widely accepted and adopted, being the on-ramp for tens of millions who seek an intelligent partner who can generate and synthesize text, code, audio, video and images. Think of it as a smart teammate who can brainstorm ideas, interact with customers and complete tasks.

As 2023 has been the year when gen AI went mainstream with individuals, 2024 will be the year when business follows. Over the next year, smart CEOs who have not yet discovered the powers of gen AI will adopt and implement AI solutions to boost productivity and increase profitability. Getting trained and incorporating gen AI into individual and company-wide workflows will move from novelty to necessity.

If you have not discovered the superpowers of gen AI, it is imperative to move quickly. This is no time for taking a “wait and see” attitude or to sit on the fence. If you need more facts and projections about the torrential growth and enormous opportunity of AI, consider the following:

Unprecedented global growth. AI is projected to contribute over $15 trillion to the global economy by 2030. Source: PWC Global 2023 Artificial Intelligence Study

Capture a competitive advantage. The AI investment forecast will approach $200 billion globally by 2025. Source: Goldman Sachs

Opportunities for early movers. 82% say AI may provide new attack strategies for adversaries. Source: KPMG 2023 CEO Outlook

Enormous productivity potential. $4.4 trillion is the potential productivity gain from AI. Source: McKinsey

Top investment priority. 70% of CEOs report generative AI is their top investment priority.  Source: KPMG 2023 CEO Outlook

Boards desire AI acceleration. 66% of board members want to accelerate the adoption of AI. Source: IBM

Quantity and quality of knowledge worker productivity rises substantially. AI increases knowledge worker productivity by 66% and work quality by 40% on certain tasks. Source: HBS and BCG.

 Leaders fear being unprepared for AI. 81% of executives say learning AI is mandatory. 79% fear being unprepared without it. Source: 2023 edX AI Survey

 Learning and applying AI tools will soon be mandatory. 77%s of executives say AI skills will become more important over the next two years. Source: 2023 edX AI Survey

Saves time. In IT, a 55% increase in productivity when generating code. In marketing and sales, an 80% reduction in time to marketing copy drafts. In customer service, a 75% potential reduction in volume of human-serviced contacts. Source: McKinsey

It’s getting better. The gen AI models are far from perfect, but they are improving rapidly. AI is either “good” or “excellent at 70% of managerial skills. Smart managers will use AI to make better decisions and improve their performance. Source: Indeed.

Widespread workforce retraining is required. 61% of workers will require retraining by 2027. Source: WEF Future of Jobs report

Everyone needs a smart teammate. AI is a smart, tireless teammate. 91% of executives would like AI to support them. 81% are excited to learn AI skills and apply them to their job. 75% hope many aspects of their jobs can be augmented by AI. Source: 2023 edX AI Survey

Still skeptical? The 2023 edX AI survey, taken by over thirteen hundred CEOs and C-suite leaders, found that 47% of the respondents believed “most” or “all” of the CEO role should be completely automated or replaced by AI – and 49% of the CEOs agreed!

The advent of gen AI marks a pivotal moment in technological evolution, and there’s no turning back. For CEOs, achieving proficiency in gen AI is not just beneficial, it’s imperative. This new era demands a transformation of the CEO’s role, leveraging AI to future-proof their leadership and pave the way for others.

Understanding and utilizing gen AI to enhance decision-making is the first step. Once mastered, it opens doors to vast improvements in business operations, and the development of innovative AI-augmented to products and services. The potential of gen AI extends to elevating your productivity, creativity and strategic thinking. To stay in the game and thrive, it’s time to get going on your AI journey.

 

GenAI and Medtech CEOs: What I’ve Learned

To Thrive in An AI-World, Leaders Must Master New Skills to Be More Productive, Creative and Strategic 

It’s been one year today since ChatGPT launched and brought generative AI into the mainstream. In just five days, over one million people tried ChatGPT – it took Twitter two years to hit that milestone. And in 2023, terms like “artificial intelligence,” “generative AI,” and “AI” are ubiquitous in business publications.

ChatGPT and other large language models (LLMs) allow us to write a prompt and see GenAI’s superpowers at work within seconds. It excels at generating and synthetizing text, video, audio, images and code. It’s also exceptional at brainstorming and generating ideas, completing tasks and interacting. However, it’s not perfect. It’s quirky and sometimes provides wrong answers.

Is this GenAI hype or the real deal? The jury is still out, but the quality of the LLMs is improving rapidly.  CEOs are jumping on board – mentions of AI on S&P 500 earnings calls have tripled compared to last year according to Bloomberg. And CEOs are putting their money where their mouths are. The investments and projections are staggering:

  • AI investments could approach $200 billion globally by 2025 (Goldman Sachs).
  • AI could contribute over $15 trillion to the global economy by 2030 (PwC).
  • AI productivity gains could reach $4.4 trillion (McKinsey).

In the medtech and healthtech sectors, moving to the “AI class” is vital.  2023 has been challenging – EY projects anemic 0.4% revenue growth versus the modest 3.5% growth last year. Slow growth and shrinking margins make productivity gains imperative. Meanwhile, AI in healthcare is projected to have an 85% CAGR through 2027 – faster than any other industry – and becoming a $22 billion market (BCG).

While medtech has been slow to adopt AI, firms that embrace it can optimize productivity, accelerate revenue and transform their businesses with new innovative AI-augmented products and services.

Productivity starts at home. An HBS/BCG study showed AI boosts knowledge worker productivity 66% on certain tasks. The productivity gains apply to executives, too. Yet, in my discussions with CEOs and senior leaders, most executives admit they don’t use AI in their daily work. They know “AI” as a term but haven’t realized its potential. That is a risky position. While AI may not take your job, someone who knows and uses AI soon will. When I ask these leaders if they would like to learn how ChatGPT, Claude and other AI-based tools can save them time, make them more creative and improve decisions, I get an overwhelming “Yes!”

Yesterday, I gave a CEO client a ninety-minute abbreviated version of the AI for Executive Productivity workshop. First, we identified the work he does that requires both brain and brawn. His list of “use cases” included:

  • Preparing the board deck and prepping for the board meeting.
  • Preparing for important meetings with key customers and investors. Gaining updated news about their companies, thinking of ideas to build rapport, questions to ask, questions to anticipate.
  • Writing the monthly letter to all employees
  • Preparing, writing and sending emails
  • Analyzing the monthly financial reports
  • Analyzing and summarizing industry financial reports such as proxy statements, annual reports, S-1s and 10Ks.
  • Reading and summarizing analyst and industry specific reports.
  • Preparing for sales calls.
  • Preparing for and rehearsing difficult conversations.
  • Writing performance reviews.

One-by-one, we took each of his use cases and he discovered first-hand how gen AI can help with a first draft or complete each of these tasks as an assistant, a strategist or a creator.  In ninety minutes, we just skimmed the surface, but he was amazed and sees the potential. Hours and hours of drudge work will be saved each month. Imagine if you and your team was AI-fluent and applied it daily. What would that be worth?

The takeaway is clear: AI is here to stay and rapidly improving. Leaders who don’t skill up on AI’s potential will struggle to remain competitive and become obsolete.  Medtech firms that fail to adopt it will be left behind. Make this your personal strategic imperative. Make AI your teammate to augment your daily work routine. The time to start is now – because an AI-powered future is closer than it appears!

Executive Teams Continue to Flounder Post-Pandemic: Here’s What CEOs Need to Do

Four actions every CEO must take to shape their top team into a cohesive, high-performing unit.

Good CEOs create top leadership teams by selecting the best executives they can find. Great CEOs differentiate themselves by shaping a high performing top team that operates cohesively. But cohesive teamwork is on the decline the past three years.

According to DDI’s CEO Leadership Report 2023, CEOs don’t believe their top team is on the same page. Since the pandemic, more than two-thirds of CEOs say their executive team is ineffective at driving strategy. This problem is seen by other senior and mid-level leaders and creates a lack of confidence in the CEO and top team. Top teams may have high performing individuals, but still not work cohesively if CEOs don’t shape positive team dynamics and create consensus on the company’s top priorities.

The DDI findings are consistent with the results reported earlier this year from the Leadership Confidence Index, which showed the confidence CEOs have in their top teams has dropped precipitously since mid-2021, falling 7.1%.

Three key messages from these findings:

  1. CEOs are concerned about their top team members abilities to drive strategy, transform and reinvent the business.
  2. Top team members are concerned how they work collectively as a team, how they lead change, and how they role model a positive culture.
  3. The next-generation leaders (those who report into top team members) have the lowest levels of confidence about top teams, creating potential retention and succession risks.

It doesn’t have to be this way.  Great CEOs are obsessed with the psychology and performance of their top teams. They care about the dynamics of the team and how the team works together. They know a high performing top team can be a huge value creation lever.

The four actions smart CEOs can take to build a value creating top team are:

  1. Focus on the roles, then the team.
  2. Create clarity.
  3. Shape the team’s dynamics.
  4. Build a team to perform and transform.

Fail to focus on developing your team and you will experience mediocrity. Excellent performing top teams don’t get there by accident. Get these four actions right and you will shape a group of talented senior executives into a cohesive, capable and committed top team that creates great value.

Three Costly Mistakes CEOs Make with Their Top Teams

The confidence level CEOs have in their top executive teams dropped 7.1% the past eighteen months, as reported by the Leadership Confidence Index. This news is alarming, given the prediction of declining growth in 2023 by CEOs surveyed. In this challenging economic environment, CEOs, top teams and their companies must embrace a laser-like focus on creating and sustaining a competitive advantage.

One of the most important tasks for the CEO is to build a top team that can be relied on. Yet, few CEOs believe their top leadership team is performing as it must. The top team should be the CEO’s biggest lever for value creation. However, many CEOs make three costly mistakes that diminish team performance.  Remedy these three mistakes and you will be on your way to shaping and leading a top team that delivers.

Mistake #1 – Failure to Create Clarity

The old expression, “If you don’t know where you are going, any road will take you there”, holds true in business. If you aren’t crystal clear about where you are headed, and if your team isn’t aligned and focused on that destination, the execution of your goals simply won’t happen. Reaching your desired future state is impossible without clarity.

The Harvard Business Review article, No One Knows Your Strategy – Not Even Your Top Leaders, reported that in an analysis of 124 companies, only 28% of executives responsible for executing strategy could list three of their company’s key objectives. A study by Bain showed that 60% of employees don’t have any idea what the goals of their company are. They are wandering around, investing effort in ways that don’t contribute to the company’s focus.

How about your team? Have you and your top team defined your company’s place in the world and its purpose? Is everyone clear about your company’s purpose, vision, and key objectives? It’s doubtful.

A recipe for creating clarity is constructing a value creation blueprint with your top team. The value creation blueprint is a working document that identifies your vital growth initiatives and the “who, what, where, when, and how” the company will achieve full potential in a two to three-year timeframe. Grounded in the company’s purpose, mission, vision and values, the value creation blueprint becomes the living document, broadly shared and updated frequently, to create an aligned, mobilized and results-oriented mindset across your business.

Mistake #2 – Failure to Shape Positive Team Dynamics

Team dynamics is how your team works together. Many chief executives underestimate the criticality of positive team dynamics and overestimate the current state of their team’s dynamics. The Leadership Confidence Index findings reported that both top team members and their CEOs are concerned about how they work collectively, how they lead change and how they role model a positive culture.  Confidence in leadership team behavior declined 8% in one year.

Great CEOs are obsessed with the psychology and performance of their top teams. They know the dynamics of a top team can make or break a company. Investors understand this, too, as they believe the quality of the top team is the single most important non-financial factor in evaluating a new IPO. When a top team works together with a shared vision and supportive behaviors, the company is twice as likely to have above median financial performance.

How about your team? On a scale of 1 to 10, how is your team performing today and how should it be performing?

The best CEOs invest time, energy and money in building the capability and shaping the dynamics of their teams. That means getting to know one another and learning personal histories. Understanding what makes others tick. Strengthening connections. Discovering how to seek, give and receive feedback continuously, in a supportive way. Encouraging candor and rich debates of differing views before making enterprise-wide decisions. Appreciating that diversity in terms of backgrounds, ethnicity, sex, and ways of thinking leads to better solutions. Take these actions and build a top team that moves faster, innovates more readily and collaborates more effectively to get things done. You will likely need outside assistance to optimize the dynamics of your top team.

Mistake #3: Failure to Perform and Transform

It’s not good enough for the team to focus only on today’s business performance.  The team also needs to be focused on transforming the business for tomorrow. You must win today’s race while running tomorrow’s race, too.

The clear message for CEOs and their teams is they must reimagine and reinvent their businesses. To reinvent their business while navigating current operating challenges, CEOs need the help of their C-suite leaders, middle managers and other team members alike. They need to reimagine a company with a bolder value proposition that achieves a more ambitious purpose in the future.

But how can leaders transform the business, reinvent their company, when they haven’t yet reinvented how they lead?  To reinvent as a leader is to consciously transform how you operate, connect and lead, so you stay relevant, energized and create maximum value.

The CEO of Moderna, the biotech firm that pioneered the messenger RNA (mRNA) COVID-19 vaccination, Stephane Bancel, says the reinvention of Moderna must start with him. Every quarter, he takes the time to reinvent how he approaches his job – to recraft his role as CEO. What he needs to start and stop doing. The vital functions and key responsibilities that only he, as CEO, must perform.

Bancel reflects on how to bring an even greater sense of purpose to his work. On the relationships he must develop and nurture. And on what he must learn and how he must grow to stay current and thrive.

Are you, and your top team members, reinventing how you lead, like Bancel? Are you recrafting your roles to create maximum value, while you elevate the contribution of the next generation of leaders?

Forty percent of global CEOs think their company will no longer be viable in ten years’ time, if it continues on its current course, reported the PwC’s 26th Annual CEO Survey. With 75% of respondents believing growth will decline in 2023, most CEOs feel it is critically important for them to reinvent their businesses for the future.

CEOs and their top teams need to perform while simultaneously focusing on how to transform. PwC’s CEO study revealed chief executives spend 53% of their time driving current operating performance and only 47% thinking about the future today. The respondents believed 43% of their time should be focused on the current state while 57% should be invested on evolving the business and its strategy to meet future demands.

To transform, C-suite leaders must engage and empower others. They must use more of the visionary and coaching styles of leadership to lift others to execute today’s business, so they can place a greater emphasis on the transformation of the business.  They will need to continuously recraft their roles and reinvent their impact so they stay relevant and thrive.

Summary

It’s time for CEOs to double down on optimizing their top teams. Overcome these three costly mistakes and invest the energy, time and resources towards building a top team that creates a valuable enterprise. That’s a competitive advantage that can’t be duplicated. Failing to do so will put the company, and you, in a perilous position.

Creating clarity, shaping positive dynamics, and reinventing top team members’ contributions and roles, while reimagining the business for the future, are the steps towards high performance and value creation.