Stop Funding AI Party Tricks

It’s easy to get dis­tract­ed with new things like AI. In every con­ver­sa­tion I’m hav­ing right now, AI is the hot top­ic. But there is a mas­sive dif­fer­ence between a ​“cool tool” and a core dri­ver of strate­gic val­ue. Dis­cern­ment is hard when every­one has an opin­ion and every ven­dor is sell­ing a revolution.

If you want to move past the hype, you need a filter.

The Collins Filter

I recent­ly watched Jim Collins field a ques­tion about how to use AI prop­er­ly in strat­e­gy. His answer was bril­liant in its sim­plic­i­ty. He did­n’t talk about neur­al net­works or pro­cess­ing pow­er. He talked about the Fly­wheel.

The fil­ter is this: You only know you’re on the right track if the AI ini­tia­tive clear­ly strength­ens a spe­cif­ic com­po­nent of your exist­ing flywheel.

If it does­n’t pow­er one of those indi­vid­ual ele­ments — mak­ing the whole fly­wheel spin faster and more effort­less­ly — it’s a dis­trac­tion. It might be a ​“neat” exper­i­ment, but it’s not strategic.

Effi­cien­cy vs. Growth

AI gen­er­al­ly hits a busi­ness in two places.

First, there’s Improve­ment. This is the ​“Prof­it per X” play. It’s about tak­ing a ten-per­son job and turn­ing it into an eight-per­son job — and even­tu­al­ly, per­haps, a two-per­son job bol­stered by a small army of agents. It’s about stream­lin­ing and cost-sav­ing. Most peo­ple are dialed in here because the math is easy.

Then there’s Growth - grow­ing the num­ber of ​“X’s” in your com­pa­ny. This is the hard part. This is pick­ing the activ­i­ties that actu­al­ly dri­ve the core unit of your busi­ness forward.

This is where the Fly­wheel becomes your best friend. A fly­wheel isn’t an abstract con­cept; it’s a mechan­i­cal real­i­ty. For an AI project to be ​“notably sol­id,” it must do two things:

1. Iden­ti­fy the fly­wheel com­po­nent: It has to plug direct­ly into an aspect of your fly­wheel (e.g., Cus­tomer Acqui­si­tion, Ser­vice Deliv­ery, or R&D).
2. Move the KPI: It must move a spe­cif­ic, mea­sur­able met­ric with­in that component.

Bul­lets Before Cannonballs

If you can’t draw a straight line from the AI tool to a spe­cif­ic KPI that makes your fly­wheel turn, you might just be play­ing with shiny objects.

The Fly­wheel is your defense against ​“strate­gic drift.” It allows you to pri­or­i­tize which ideas deserve ​“bul­lets” — those small, low-risk tests — before you com­mit the ​“can­non­balls” of mas­sive cap­i­tal and time.

AI can be the great­est accel­er­ant your busi­ness has ever seen. But remem­ber: an accel­er­ant only works if you have an engine to put it in. If the fuel isn’t going into the engine, you’re just mak­ing a mess on the floor.

It’s worth think­ing about. Hard.

The Chal­lenge: The 60-Sec­ond Audit

Take your list of cur­rent AI ini­tia­tives. Pick the top three. Now, for each one, answer these two questions:

• Which spe­cif­ic com­po­nent of our Fly­wheel does this drive?
• What is the spe­cif­ic KPI that will prove the Fly­wheel is spin­ning faster because of it?

If you can’t answer both in under six­ty sec­onds, don’t invest more until you can.

Addi­tion­al Resources:

• Arti­cle - The 4 Forces of Growth: Learn to Pre­dictably Scale Your Business
• Arti­cle — How Man­age­ment-Dri­ven Com­pa­nies Use Bench­marks to Beat Mediocrity
• Arti­cle — SMaC Down: South­west Air­lines Changes the Recipe of Their Success

Videos:

• Inter­view — Unlock­ing Busi­ness Poten­tial: Top 5 Take­aways from a Con­ver­sa­tion with Sal­im Ismail
• Inter­view — Quest Glob­al CEO & Founder, Ajit Prabhu