Only about 12 per cent of CEOs say AI has delivered both cost savings and revenue gains. The usual response is to study that 12 per cent. The more useful question is why the other projects, the ones marked as failures, are quietly throwing away their most valuable output.
The 12 per cent is the easy part
Getting a return from an AI project is often not the hard thing it looks like. A company running its operations inefficiently will find that almost any competent AI project surfaces flaws worth fixing: process, supply chain, warehouse, pricing, contracts. That is where a good share of the 12 per cent comes from. It is real, and it is the floor, not the ceiling.
The bigger question is how you grow that number across every company, and the answer is not in the technology. It is in what leaders are not looking for. This is the same misdirection I wrote about in The Question Your Organisation is Asking About AI is Probably Wrong.
The spin-offs of innovation
On the way to a project’s stated goal, the people doing the work have epiphany moments. I call them spin-offs of innovation. A team sets out to cut licensing costs and, along the way, sees a new revenue model, a fix for a problem in another division, a better way to price, an idea nobody had scoped. Those moments are worth as much as the visible target, sometimes more.
That is where you grow the 12 per cent: by looking for the invisible spin-offs as deliberately as the headline goal, and by giving them permission and funding to become something. It is the opposite of the low-ambition approach I criticised in AI Leadership Failure: Set Low AI Goals, Automate the Obvious, Fail Quietly.
Why pass-fail measurement quietly destroys the value
Here is the honest version of the problem, and I want to be careful not to overclaim. I cannot tell you that the projects marked as failures were secretly full of breakthroughs, because by definition nobody counted. That is exactly the point. When you measure a project as pass or fail against a single goal, you guarantee that every discovery outside that goal goes uncounted, unfunded and unremembered. You will never know what was lost, which is its own kind of loss.
The KPI becomes the executioner. An idea gets surfaced, and because it is not the one thing being measured, it is quietly killed. So the fix is not a better dashboard for goal A. It is to make the question itself broader: what else did this project uncover, and what will we do with it? That is where the real return, and the real bonuses, should come from. It is the same reason value leaks long before the P&L moves, which I set out in The P&L Moves Only After the Leader Does the Work, and why the phase everyone wants to skip is the one that matters, in Into the Chasm and Back.
The 12 per cent is what got measured. The far larger number is everything a pass-fail scorecard threw away before anyone thought to look.
If you are leading your organisation through this, I work with a limited number of senior leaders each quarter. Get in touch at Anglero.com.
Thomas Anglero is a Strategic AI Advisor, keynote speaker and author of Intro to Artificial Intelligence. He has delivered over 450 keynotes across 30 countries for organisations including IBM, the WHO, the World Government Summit and the European Commission. He founded the IBM Watson AI Lab for Cancer at the Oslo Cancer Cluster and closed over $500 million in enterprise transformation deals as CTO and Chief Innovation Officer at Cognizant.
Frequently asked questions
Why do only about 12 per cent of AI projects deliver both cost and revenue gains?
Reaching a single stated goal is often the easy part. The low number reflects how projects are measured, not what they could produce. Most of the real value shows up as discoveries outside the goal that no one counts.
What are spin-offs of innovation?
The unplanned discoveries a team makes on the way to a project’s stated goal, such as a new revenue model, a fix for another division, or a better pricing approach. They are often worth as much as the headline target.
How does measurement destroy AI value?
Measuring a project as pass or fail against one goal guarantees that every discovery outside that goal goes uncounted, unfunded and unremembered. The KPI becomes the executioner of ideas it was never set up to see.
How do you increase the 12 per cent?
Look for the invisible spin-offs as deliberately as the headline goal, and give them permission and funding to become something. Make the question broader: what else did this project uncover, and what will we do with it?