Generative AI Framework: Define the Opportunity

By Francisco Dagnino
Feb 01, 2024

In the realm of Generative AI, the initial step of defining the opportunity stands as a cornerstone in sculpting a successful Generative AI strategy. This stage is not merely a starting point but a significant milestone meant to lay a solid foundation, steering the trajectory of your AI initiatives towards success. It is here that businesses carve out a niche, identifying avenues where AI can bring transformative changes that are actually impactful, far beyond the fad. As we venture deeper into the "Define the Opportunity" stage of the framework, I aim to provide you with a comprehensive guide to navigate this critical phase with precision and foresight.

In the inaugural installment of this series, we embarked on a journey, unveiling the vast potential of Generative AI for small and medium businesses (SMBs). We introduced you to the Generative AI Strategy Framework developed by Phi Research, a beacon guiding SMBs like the fictional CardboCanva in navigating the complex landscape of digital transformation. This framework serves as a roadmap, assisting businesses in identifying and capitalizing on the right opportunities, fostering innovation, and achieving sustainable growth. As we delve deeper, we continue to unravel the intricacies of each stage, starting with Defining the Opportunity. Click here to revisit the first installment.

1. Define the Place and Scope

Technology, Data & Analytics shouldn't be used for the sake of it. They have a place and scope of action. Both at the service of the business' strategy. Generative AI, in particular, has provides multiple opportunities, but it also has several limitations. Ensuring you have a clear scope of action for your Generative AI stratey will ensure you optimize your resources and reduce the risk of alienating customers and employees.

Identifying the Right Opportunities

To carve out a successful path in the Generative AI landscape, businesses must first pinpoint the right opportunities. This involves a deep dive into potential areas where AI can bring transformative changes. Here are some activities that businesses can engage in to identify these opportunities:

  • Attending specialized webinars and workshops
  • Commissioning research studies
  • Collaborating with AI experts and consultants
  • Participating in industry forums and discussions
  • Analyzing case studies and white papers
  • Conducting internal brainstorming sessions
  • Engaging in cross-industry collaborations
  • Seeking mentorship from industry leaders
  • Exploring pilot projects and proof of concepts

Aligning with Business Goals and Strategies

To ensure a fruitful journey in implementing Generative AI, businesses need to align their initiatives with their core strategies and goals. Here are some key points to consider, each followed by a set of questions to help establish them:

  • Establish Core Values: What are our organization's fundamental beliefs? How does Generative AI align with our core values?
  • Have Clarity on Goals and KPIs: What are our primary goals for implementing Generative AI? How will we measure success?
  • Be Intentional about Alignment: How does Generative AI fit into our broader business strategy? What steps are we taking to ensure alignment with our objectives?
  • Understand What Talent You Need: What skill sets are necessary for successful implementation? How are we planning to bridge the existing skills gap?
  • Ensure Understanding of Company Goals: How are we communicating the company's goals to all stakeholders? What mechanisms are in place to ensure understanding and alignment?
  • Plan for Strategic Alignment: How are we integrating Generative AI into our strategic planning? What steps are we taking to ensure a cohesive approach?
  • Focus on Value Creation: How will Generative AI create value for our business? What are the potential avenues for value creation through Generative AI?

2. Validating Needs and Strategy Alignment

In the pursuit of implementing Generative AI, aligning it meticulously with the organizational strategy and validating the current market needs is of paramount importance. This approach not only fosters innovation but also ensures that the AI initiative resonates well with existing market demands and the strategic objectives of the organization.

Aligning with the Organizational Strategy

Ensuring that the AI strategies are in harmony with the broader organizational goals and objectives is a critical aspect of a successful Generative AI initiative. It involves a deep understanding of how the AI initiative can complement the existing business model and create synergies with organizational objectives. Key considerations in this phase are:

  • What are my customers, prospects and target audience saying? What are their needs?
  • How does the Generative AI initiative align with our business goals?
  • What potential synergies exist between AI strategies and organizational objectives?
  • How can we ensure that the AI initiative complements our existing business model?

Assessing the Current Market Needs

Before embarking on the implementation of Generative AI, understanding the prevailing market needs is essential. Comprehensive market research should be conducted to identify gaps and opportunities where Generative AI can offer a competitive edge. Questions to ponder upon include:

  • What are my customers, prospects and target audience saying? What are and will be their needs?
  • What are the current trends and demands in the market?
  • How can Generative AI address the existing gaps in the market?
  • What are the customer expectations, and how can AI meet or exceed them?

Tools and Techniques for Validation

To effectively validate the needs and strategies, businesses can employ a variety of tools and techniques, including:

  • Data Analytics: Utilizing data analytics to identify the right metrics for measuring the success of the AI initiative.
  • Customer Feedback: Gathering insights from customer feedback to fine-tune the AI strategies.
  • Expert Consultations: Leveraging expert consultations to validate the feasibility and potential impact of the AI initiative.
  • Pilot Projects: Implementing pilot projects to test the viability of AI strategies and make necessary adjustments before full-scale implementation.
  • Market Surveys: Conducting market surveys to gather firsthand information on current market trends and customer preferences.
  • Competitive Analysis: Undertaking a competitive analysis to understand the market dynamics and identify areas where AI can provide a competitive edge.
  • Scenario Planning: Engaging in scenario planning to anticipate potential future developments and how AI can be leveraged to address them.

By focusing on meticulous validation and alignment with organizational strategies, businesses can set the stage for a successful and fruitful journey with Generative AI.

3. Defining Clear Objectives

Clearly defined objectives serve as a roadmap, guiding the project towards its intended goals and ensuring alignment with the organizational strategy. They help in maintaining focus and steering the project in the right direction, fostering a sense of purpose and direction.

Setting Objectives

Setting objectives is a pivotal step in the project planning phase, providing a clear pathway to assess success and steer the project in the right direction. Objectives are absolutely essential as they allow for a structured and focused approach to project management. Various frameworks can be utilized in setting objectives. Some recommendations:

  • SMART: A framework for setting specific, measurable, achievable, relevant, and time-bound objectives.
  • CLEAR: A modern approach to goal setting emphasizing collaborative, limited, emotional, appreciable, and refinable objectives.
  • OKR: A strategic framework where objectives define what one wants to achieve and key results are the specific measurements used to track the achievement of that objective.

Questions to consider while setting objectives include:

  • What specific outcomes do we aim to achieve with this initiative?
  • How will we measure the success of these objectives?
  • Are the set objectives achievable with the resources at hand?
  • How are these objectives relevant to our organizational goals?
  • What is the timeline for achieving these objectives?

Measuring Success: Key Performance Indicators (KPIs)

Establishing measurable objectives, as guided by frameworks like SMART, CLEAR, or OKR, facilitates the development of Key Performance Indicators (KPIs). These KPIs serve as quantifiable measures that help in monitoring the progress and success of the project, ensuring alignment with the set objectives and providing insights into the project's performance and success.

Matt Curtis, our CEO has covered KPIs extensively. Here are 3 posts I recommend to get you started: 

CarboCanva: A Case Study

In the fiercely competitive cardboard packaging industry, CarboCanva emerged from humble beginnings to become a beacon of innovation and sustainability. Now, at a critical juncture, they are gearing up to harness the potential of Generative AI to foster growth and innovation. Here's how they leverage Phi Research's Generative AI Strategy Framework.

Identifying the Right Opportunities

CarboCanva initiated their transformation by pinpointing areas where growth was stagnating. Through specialized workshops and customer interviews, they identified three key areas to leverage Generative AI:

  • Customer Packaging Design Assistance: Utilizing AI to offer personalized packaging solutions, enhancing customer satisfaction and engagement.
  • Automated Specialized Customer Support for Top-Tier Customers: Implementing AI-driven customer service solutions to provide prompt and personalized support, enhancing customer loyalty.
  • Carbon Footprint Analyzer for Customers: Developing an AI tool that allows customers to analyze the carbon footprint of their packaging choices, promoting sustainability and responsible consumption.

Aligning with Business Goals and Strategies

CarboCanva embarked on a journey to realign their business strategies with the evolving market demands. They initiated:

  • Sustainability Driven Innovations: Launching a series of AI-driven sustainable packaging solutions, reinforcing their commitment to environmental responsibility.
  • Strategic Partnerships: Collaborating with tech firms to integrate AI capabilities into their existing product line, fostering innovation and expanding market reach.
  • Employee Training Programs: Implementing training programs to upskill their workforce, preparing them to work alongside AI technologies and drive success.

Validating Needs and Strategy Alignment

To validate their strategies, CarboCanva adopted a multi-faceted approach:

  • Customer Feedback Analysis: Utilizing AI tools to analyze customer feedback, identifying areas for improvement and innovation.
  • Market Trend Analysis: Conducting AI-driven market analysis to identify emerging trends and align their product offerings accordingly.
  • Pilot Projects: Launching pilot projects to test and refine their AI initiatives, ensuring alignment with market needs and organizational objectives.

Setting Clear Objectives

CarboCanva set clear objectives to guide their AI initiatives:

  • Enhanced Customer Engagement: Developing AI tools to facilitate interactive and personalized customer engagements, driving customer satisfaction and loyalty.
  • Operational Efficiency: Implementing AI-driven processes to enhance operational efficiency, reducing costs and improving productivity.
  • Innovation and Growth: Fostering a culture of innovation through AI, developing new products and solutions that meet the evolving market demands.
  • Measuring Success: Key Performance Indicators (KPIs)

To measure the success of their AI initiatives, CarboCanva developed specific KPIs:

  • Customer Satisfaction Index: Utilizing AI tools to monitor and analyze customer satisfaction levels, aiming for continuous improvement.
  • Sustainability Metrics: Developing metrics to measure the impact of their sustainable packaging solutions, reinforcing their commitment to environmental responsibility.
  • Market Share Growth: Monitoring market share growth to gauge the success of their AI-driven innovations, aiming to solidify their position as a market leader.

CarboCanva's venture into Generative AI illustrates their commitment to innovation and growth. Through meticulous planning and execution, they are setting a new industry benchmark, showcasing how SMBs can adeptly navigate the complex landscape of digital transformation, and forge ahead with renewed vigor.

Conclusion

In this installment, we embarked on a comprehensive exploration of the initial stage of the Generative AI strategy framework: Defining the opportunity. We underscored the pivotal role of understanding the place and scope of AI implementation, highlighting essential activities and questions to facilitate alignment with business goals and strategies. Furthermore, we delved into the nuances of validating current market needs and aligning them with organizational strategies, emphasizing the indispensable tools and techniques for validation. We also went through the significance of setting clear, measurable objectives, and how they intertwine with Key Performance Indicators (KPIs) to gauge project success.

Defining the opportunity stands as a critical cornerstone in devising a successful Generative AI strategy. It lays the groundwork, fostering a well-structured pathway that is aligned with the business goals and market needs. As we delve deeper into the intricacies of leveraging Generative AI for business productivity and differentiation, this initial step ensures a robust foundation, preparing businesses to adeptly navigate the subsequent stages of the framework. Stay tuned as we continue to unravel the potential of Generative AI in the forthcoming segments of this series, equipping you with the knowledge to spearhead a transformative journey in the digital landscape.

Catch Up With Other Posts in This Series:

5 Introductory AI Use Cases

Orchestrate the Transformed Process

Select a Tech Framework

Prioritize & Execute Your AI Project Work

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