Mark Johnson is Cofounder and Managing Partner at Michigan Software Labs.
Leaders want to remove emotions from talking about AI right now. They want to move from speaking of AI as “super cool” to starting to get the ROI from it.
Right now, it reminds me of the early days of the App Store, when the winning apps had a cohesive strategy and purpose before being launched.
It was less about launching something meaningless on the App Store (because many companies just tried to put their company websites in an app) and more about finding why it needed to be a mobile app.
Mobile was just the vehicle on which the technology could be deployed, but the strategy needed to be in place.
We are in the process of writing a framework for how the most successful companies are deploying AI. We are interviewing our current clients and prospective clients to gather this research. Right now, it seems to be clear:
AI needs to be in the fabric of your company going forward—but not the flashy stuff—just what can produce a return. Here’s how I would summarize our findings so far:
“AI isn’t magic. It’s a capability.”
Most companies are still figuring this out.
New BCG research reveals a stark reality: only 26% of companies have developed the capabilities to generate tangible value from AI.
According to the study, the gap between AI leaders and everyone else is widening:
• Leaders achieved 1.5x higher revenue growth.
• 1.6x greater shareholder returns.
• 1.4x higher returns on invested capital.
What separates the leaders from the rest?
• They focus on core business processes, not just support functions. 62% of AI’s value comes from transforming core operations.
• They’re strategically selective. Leaders pursue half as many AI initiatives as others. But successfully scale twice as many solutions.
• They follow the 70-20-10 principle. With 70% of resources into people and processes, 20% into technology and data, and 10% into algorithms.
From the research, it seems most companies make a critical mistake: obsessing over algorithms while neglecting the human element.
We are finding that keeping a human in the loop is the key ingredient to ensuring the success of your AI rollout.
For example, we are helping a middle market company right now to leverage their data using AI by providing a way for them to gather all their “institutional knowledge” in one central repository. Think of downloading all of your leader’s knowledge and insights about what to do in every situation and turning it into actionable insights. You still want a human in the loop to make sure what is coming out is actually valuable and reliable to build decisions on.
But the research is clear: 70% of AI implementation challenges stem from people and process issues, not technology.
AI isn’t failing these companies. Their approach is.
Leaders understand that AI transformation is fundamentally about organizational change, not just deploying new tools.
We are recommending a new approach we call “Do More with Less.”
Most companies respond to budget cuts by slashing innovation.
That’s exactly backward.
When resources tighten, your technology strategy shouldn’t shrink—it should sharpen.
We’ve guided dozens of organizations through economic downturns, and I’ve noticed something fascinating:
The companies that thrive don’t just cut costs. They reallocate resources toward frugal innovation.
Here’s what works.
• Audit your tech stack ruthlessly. Most enterprises waste 30% of their software spend on unused or redundant tools. Cut out those tools and focus the spend elsewhere.
• Embrace automation for repetitive tasks. One group automated their invoice processing and saved 22 hours per week. Build something custom if you need to that is built on a more modern and less expensive tech stack.
• Deploy AI strategically, not broadly. Focus on high-friction, high-value processes first. Ask your team, they will likely tell you.
• Optimize before you migrate. Many companies saw costs surge after cloud moves because they lifted-and-shifted inefficient systems. Don’t do this. As my wife has often said, “Clean out the refrigerator before you go shopping for new groceries.”
• Invest in process improvements before new technology. The best tech can’t fix broken workflows. The hard truth: Economic pressure exposes inefficiency that was always there.
Your competitors are using this moment to get leaner and more agile. The question isn’t whether you can afford to innovate during lean times.
It’s whether you can afford not to.
One way to get lean is to find someone who can help you with these five tasks in an “audit-like” manner. I hope these tips help you strategically explore AI for your business.
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