AI Suc­cess Be­gins with Lead­er­ship's Mind­set

Once a month, researchers at Copenhagen Business School provide Børsen readers with a current and research-based perspective on the challenges facing leaders.

This time, Torsten Ringberg, Professor at the Department of Marketing at CBS, discusses the importance of leadership first assessing whether it has the right mindset regarding their interactions with the market, and subsequently determining whether there is a need to utilise existing or new digital technologies to optimise this approach.

Companies are spending billions on artificial intelligence and technology, yet few are creating real value. The issue isn't the technology itself but rather the leadership's mindset. Without a clear leadership approach, AI projects risk becoming ineffective pilot schemes that fail to unlock the full potential of AI technology.

Why Do Many AI Projects Fail?

According to a BCG study, only 4% of companies generate significant value from their AI investments, and less than a quarter see any real impact. A similar report from Siemens reveals that many leaders struggle to recognise the potential of AI to develop new business models. In practice, AI is often used to optimise internal processes rather than create new value for customers, thus failing to strengthen the company’s relevance on the market.
As the economist Peter Drucker once said: “There is nothing so useless as doing efficiently that which should not be done at all.” In other words, it is not just about using technology to its fullest; but about using it for the right purposes. This begins with understanding and recognising the leadership's strategic mindset and whether it aligns with the way customers prefer to engage. Our studies of several hundred leaders' strategic mindsets and their customers' preferred interaction forms show that significant gaps exist between the two!

The Four Strategic Mindsets

In the book "Disrupt Your Mindset to Transform Your Business with Big Data", Pernille Rydén, Per Østergaard Jacobsen, and I describe four dominant strategic leadership mindsets. These mindsets determine how companies engage with their customers – and, in turn, how and which new digital technologies should be applied:

1.    Promote and Sell
An internally focused approach, where products and services are aggressively promoted to the market. (e.g., Ryan Air, Saxo, Temu).

2.    Listen and Learn
A market-oriented approach based on continuous insight into customer behaviour and preferences. (e.g., Coop App, Nemlig, and Starbucks).

3.    Connect and Collaborate
A proactive approach where customers are involved in the development of products and services. (e.g., LEGO, Ikea Co-create, DeWalt Insight Community, and Roccamore Facebook Groups).

4.    Empower and Engage
A holistic approach that integrates People, Planet, Purpose alongside product and profit, where the company sees itself as a responsible corporate citizen. (e.g., Too Good to Go, Social Foodies, and Patagonia).

In fact, it is the leadership's strategic mindset that determines whether existing or new digital technologies should be used.

Case Studies: How the Right Mindset Creates Value, with or without New Digital Technologies

LEGO’s turnaround is an excellent example of how a shift solely in mindset can transform a company. LEGO moved from a "Promote and Sell" mindset to combining "Listen and Learn" (better understanding of children's play) and "Connect and Collaborate" (inviting customers to contribute product ideas). This transformation into a customer-centric brand enabled LEGO to fully leverage new digital technologies while many competitors went bankrupt. Ikea Co-create adopts a "Connect and Collaborate" mindset through an open-source platform to engage fans in developing new products. Similarly, DeWalt’s Insight Community receives product ideas through its customer community platform.
That said, a "Promote and Sell" mindset can also benefit from new technologies, provided it aligns with what customers want. Consider online retail platforms like DBA, Amazon, Netflix, Momondo, and Zalando, among others.
In other cases, new business opportunities can be created entirely through innovative thinking without relying on new digital technologies. Nemlig.com transformed customer interaction in retail with its "Listen and Learn" mindset and home delivery service. Roccamore built a unique market with its "Connect and Collaborate" mindset, where customers contribute to product development via Facebook Groups.

How to Find Your Strategic Mindset and the Right Use of Technology

To ensure success with AI and digital technologies, you must start by focusing on the mindset aspect. Here are three steps to identify and optimise it:

1.    Identify Your Mindset
Become aware of your own, your colleagues', and your company's mindset. We have developed a leadership mindset test that provides this insight.

2.    Do We Have the Right Mindset? Adapt It to Customer Interaction Needs
Investigate whether a new mindset will create greater value relative to customers' preferred interaction style. We have developed a customer mindset test based on their interaction preferences.

3.    Invest in New Technologies Only If It Makes Sense
Examine whether existing technologies can achieve the desired results. If not, explore which AI and other new digital technologies can enhance customer interactions and create mutual value. Invest strategically – preferably in a step-by-step approach so mistakes can be corrected and new insights gained along the way.

Value-creating transformation and innovation can occur either with or without new digital technologies, depending on the market, as long as the optimal mindset is in place. The use of AI can generate new insights and optimise customer interactions, but only with the right strategic mindset.