November 23, 2025 • 15 mins
AI is rising on the agendas of global CEOs, according to the latest edition of the CEO Radar. But a surprising number of chief executives are still struggling to embed the technology into their businesses. On this episode of the CEO Radar Podcast, Edward Adams of Bloomberg Media Studios is joined by BCG Global Chair Rich Lesser and Vlad Lukić, BCG Global Leader of Tech and Digital Advantage, to explore how CEOs can compare themselves to their peers when it comes to corporate integration of AI.
This episode is sponsored by BCG.
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Speaker 1 (00:00):
Because you're a subscriber to this Bloomberg podcast, we thought
you'd be interested in a sponsored podcast called The Ceo Radar,
produced by BCG and Bloomberg Media Studios. It analyzes more
than forty eight hundred Q three earnings calls worldwide to
assess what topics merit a CEO's time and attention. Here's
a recent episode when the company is investing in these
(00:25):
AI pilots. Are they spending too long on them? Are
they giving up too quickly on them? Or is it
just right? I wish it was just right. It's both.
Speaker 2 (00:35):
Actually they're closing some of them too soon and some
of them they're just stinking on for way too long.
Speaker 3 (00:40):
But I think that focus on value creation and particularly
where you can build distinctive value creations, that is the
critical way to be thinking about where and how to
apply AI right now.
Speaker 1 (00:51):
The Ceo Radar reviewed earnings calls at forty eight hundred
companies worldwide to see what's on the agendas of both
CEOs and the market as a whole. I'm Edward Adams
of Bloomberg Media Studios on this episode. I'm joined by
BCG Global Chair Rich Lesser and Lad Lukic BCG Global
(01:12):
Leader Tech and Digital Advantage. Rich and Blad Welcome to
the podcast.
Speaker 4 (01:17):
Great to be here, ed Nice to be here.
Speaker 1 (01:20):
In Q three, tariffs remain the top one or two
topics that were most mentioned during earning's calls, both by
CEOs and by analysts, but the number of mentions went
down from Q two.
Speaker 4 (01:33):
There is a shift that I thought was really interesting.
Speaker 3 (01:35):
And when we did this a quarter ago, all of
the discussions are about policy related topics that will happen.
What will happen. Now it's about, Okay, what are we
going to do? There is still policy uncertainty. It's not
that things won't shift, but now I think everybody realizes
substantial tariffs versus anything we've dealt with historically in decades
are now most likely here to stay, certainly as it
(01:56):
relates to the US, and now we have to navigate it.
And I thought the interesting shift in the types of
questions and conversations that CEOs and ANAUS were having was
really quite reflective of that shift.
Speaker 1 (02:07):
And along those lines, they were talking far more about
growth topics we saw this year, particularly in AI, a
topic we didn't think necessarily could be mentioned any more often.
Than it had been.
Speaker 3 (02:18):
What we observe in our research is a bell curve
of behaviors where you've got about five percent of CEOs
that are really at the cutting edge about how to
embed AI into their core business, reshape how they operate
and invent new business models drive the business. You've got
another thirty or forty percent of CEOs that are well
on that journey, and you've got about sixty percent of
CEOs that are really struggling to get on that curve,
(02:40):
often either six zeros six percent. Right, No, it's a
hard it's a hard transition to make because on the
one hand, you have to change your mindset about how
you're going to translate AI into impact at scale, not
just do interesting pilots, and then you have to change
your mindset to raise Yes, there is an enormous amount
of interesting and important tech in here, but the hardest
(03:03):
part of that change is often the human part of
that change, how you embedded in and processes, leadership skills,
and companies just find that journey to be a bit hard,
and so every year webs are more and more moving
toward the more advanced and their ability to do it,
but it's still a substantial percentage of CEOs that are
struggling on that journey. But for the ones at the
(03:23):
top of the list, I think they're thinking about it
in very sophisticated ways. How do you pick fewer things
rather than more and really deliver them?
Speaker 1 (03:31):
LAD, you're oftentimes down in the trenches with these companies,
not necessarily always at the CEO level. Are you seeing
any disconnect between what rich is reporting at the top
and what you're seeing when you're talking to people two
or three levels down.
Speaker 2 (03:43):
Many times you could have the direction lined up by
the CEO and fully aligned.
Speaker 4 (03:47):
By the executives.
Speaker 2 (03:48):
But if you're running HR and now, you need to
hire igentic engineers that know how to wire these workflows together.
You need to change job descriptions, you need to introduce
new titles, and many times they they don't know how
to do that. They haven't done it before.
Speaker 1 (04:03):
Richard told us that they are About sixty percent of
companies are still struggling to get out of the incubation phase.
Right with AI, If we're on the outside of a company,
how do we recognize a company has moved beyond and
it's begun to really get some ROI from from its
implementation of that.
Speaker 2 (04:20):
I mean, I would say focused on the bottom line results,
like the really good ones immediately. However, we cut the
data and when we look at it, the ones that
have really leaned into AI are growing faster the numbers
are there.
Speaker 1 (04:31):
Are you finding that that CEOs are willing to talk
about that on earnings calls to sort of be public
about yes, we're improving in AI is one of the
reasons why.
Speaker 3 (04:40):
I think some are starting. One of the leading insurers
talked at length about underwriting and how they've really thought
about underwriting differently to be able to go faster and
more effectively. And in commercial underwritings it's often a speed game.
The ability to get to a proposal very soon for
a client is critical to whether you're going to win
the win the bid or not. And so a leading
(05:01):
mining company has talked about how it's automated. A huge
part of Western Australia runs it out of a control
center with TED people uses predictive and enerve AI to
be able to make much smarter decisions about what time
of data fill different kinds of ships, how to run
the whole process. Loreal has talked about beauty Genius. It's
desired to create a more agentic beauty platform that people
(05:23):
can use online and get recommendations, but also fulfilled orders
and do things. And how they just did a major
rollout here in the US and some other places this
year that it's a learning mode, but those are real businesses,
not just a small pilots.
Speaker 2 (05:37):
It's a test to build off of that. There is
need to communicate for several reasons. Son, you need to
get new talent. The talent is now looking at am
I joining a company that will be a winner in
the space, and will I get all the tools in
my hands to be successful. The buyers are looking at
their suppliers and saying are you going to be cutting edge?
And are you going to be pushing on the innovation
curve and on the cost curve fast enough to remain
(06:01):
so the CEOs need to signal both to their employees
and partners in the broader ecosystem that they're on top
of this.
Speaker 1 (06:06):
I want to find out whether or not you're seeing
AI as a job creator or a job killer, at
least at this stage of the process. Lad, you're on
the ground, what are you seeing?
Speaker 4 (06:14):
Yeah?
Speaker 2 (06:15):
Counter to like what we might hear in the media, right.
I'm actively engaged with probably twenty engagements right now. Not
a single one of them has a thesis on reducing
the number of labor. It is about growth opportunities and
growing the business. Now that is in the short term.
Does that mean it doesn't have longer term implications for sure?
Speaker 4 (06:32):
Right?
Speaker 2 (06:33):
But where I'm seeing the winning convoys when you get
the efficiency and then translate it into new value propositions
to customers, right and grow the business. So that's the
conbo that seems to be winning so far.
Speaker 3 (06:43):
I agree with that, but I would add the two things.
One is, we have seen examples I mentioned earlier, the
Australian example where a a mining company can control an
enormous amount of land area autonomously have a control center
with a very small number of people in it. I
mean obviously that has labor displacement from the way they
would have used to.
Speaker 4 (07:03):
Formal we would have operated.
Speaker 3 (07:04):
And then the second thing I'd say is there is
so much capital going into AI and data centers now
it's hard to see how that pays out in the
long term if labor displacement isn't a part of that.
Speaker 2 (07:16):
I'm optim is that it's going to generally result in
net positive number of jobs, but they're not going to
be the same jobs. People will have to be reskilled
and moving to new into new fields, et cetera. And
the ones that embrace this are going to be more
relevant than ever. If you embrace this and do it,
you'd get a superpower and you can be more relevant.
Speaker 1 (07:35):
But at the beginning of the year, there's a lot
of talk about agentic AI AI being able to accomplish
tasks to a degree on its own right, to be
able to book my flight to La get me a hotel,
get me a dinner reservation without me having to get
involved with it, as just one example. Are you still
seeing that emphasis on agentic at the as we begin
to close out the year, or has it has it
(07:56):
shifted somewhat?
Speaker 2 (07:57):
For sure, it's it's still there, and it's in two
specific flavors. One is articulating, are of the possible? Oh boy,
wouldn't it be cool if we could combine all of
these things together? Right, the reality is we're just not
there to pull it off. So where we're seeing agentic
being deployed is in a specific workflow end to end,
but then with a human to act on the decision.
(08:19):
What we're not seeing is and what a lot of
folks are hoping for, is agents talking to agents and
like stringing together a bunch of processes because you still
have accuracies in the eighty to ninety percent range. So
that means if I string together ten steps and each
one of them is eighty percent accurate, at the end
of it, I'm at less than fifty percent accuracy. So
you do need a human in between that is interpreting
(08:40):
and fine tuning the agents within.
Speaker 4 (08:41):
Those specific workflows.
Speaker 2 (08:43):
That's where we are, and for us to enable the
next level, we'll need better data, we'll need better infrastructure.
It was a fantastic catalyst to actually surface a lot
of the basic needs that the companies need to rewire
and rethink on their textag. So it's there as a
catalyst and the promise of what it was can happen,
and companies are leaning in and are committed to that
motion for the years to come.
Speaker 4 (09:04):
Which I don't need to tell you.
Speaker 1 (09:05):
The valuations of the Magnificent seven and other AI related
stocks are scott high. If those valuations were to tank,
much as we saw the valuations of dot com companies
tank during the dot com bubble. Do you think that
companies will continue to invest in their own AI initiatives
or do you think that may have a knock on
effect in terms of how the worldwide corporate environment looks
(09:28):
at AI.
Speaker 3 (09:29):
I think it will have very little effect on the
real economy. It'll obviously have a massive effect on the
stock market, as they represent a high share of total
stock market valuations.
Speaker 4 (09:38):
If that's an aarrea where will occur.
Speaker 3 (09:40):
But I actually think the more companies see the kinds
of impacts they can drive, and the more they can
point to examples even if it's of competitors or in
other industries that they can rise, they need to take action,
that will be what drives momentum. I actually think that
companies are realizing you can fundamentally operate differently with these technologies.
(10:03):
Even if the market is overvaluated, there's no question AI's
capabilities will continue to grow.
Speaker 1 (10:08):
Rich Are you finding that companies are investing in AI
in the right kind of way?
Speaker 3 (10:13):
Obviously a subset are, but I'd say too many more
than half are still at the stage where they're either
investing may need to do pilots and not thinking about
scaling or Equally importantly, they're doing the kinds of things
that are important to stay competitive, to be more productive
all of the many AI tools that come along from
tech players and others, but insufficiently investing to what will
(10:35):
really lead to competitive advantage, which is where you're either
reshaping entire workflows or functions, where you're building new business models.
Speaker 1 (10:44):
So lad when a company is investing in these AI pilots,
are they spending too long on them? Are they giving
up too quickly on them? Or is it just right?
I wish it was just right. It's both.
Speaker 2 (10:57):
Actually they're closing some of them too soon, and it's
some of them they're just sticking on for way too long.
We had a client that for three months was running
a pilot and in an area that had so much
value right and they were evaluating a tool that was
available three months ago, and at the end of it
was lukewarm results and they said, Okay, we're done. Well,
there's so many new tools that got released in the
last three months that can get the performance to the
(11:19):
next level, but they gave up. So if you know
that there is a lot of value in that workflow,
sweat it out, stick with it, don't abandon it too
soon because the pace at which the new tools are
coming is so high. Right on the flip side, there
are a number of them that are seeing good, interesting
results from the pilots, but it's in a process that's
not a bottleneck, and even if you solve it from
(11:39):
ten days to minutes doesn't change the overall outcome. You're
just increasing your cost. But they stick with it because
the technologies, they can show cool demos and it's moving,
but it ends up being a distraction. Stop stop those
much sooner than kind of instead of creating zombies in
the organization.
Speaker 1 (11:54):
So apply AI to the core of your business operations.
Speaker 3 (11:56):
Where there's business value in a very distinct and measurable way,
as opposed to where you can do really interesting stuff
that looks really cool. I mean not that we don't
all like to have a little bit of cool. You
want a little bit of pizaz in whatever you're doing.
But I think that focus on value creation and particularly
where you can build distinctive value creation that is the
critical way to be thinking about where and how to
(12:18):
apply AI right now.
Speaker 1 (12:20):
Since we're almost at the end of twenty twenty five.
One of the questions we want to ask you was
what were the kinds of attributes that CEOs needed this
year to be.
Speaker 3 (12:29):
Effective rich resilience? Like this is another year that could
be characteristic over this entire decade. But I just think
this ability to take unexpected things and figure out how
to navigate them and do it in a way that
both anticipates as best you can, but then can respond
quickly and adapt and then reimagine that set of attributes
(12:51):
is turning out to be over and over again really
critical in this world.
Speaker 1 (12:55):
Are you finding that most CEOs have that skill set
or is it something that any of them are still
reaching for.
Speaker 3 (13:02):
I think they've had to develop it a lot more.
In fact, when I meet new CEOs that I do
a lot of sessions with them, I always say, you
have no idea how much this generation of CEOs is
able to handle resilience. More than six years ago, pre COVID,
it had been so steady for so long, I think
people sort.
Speaker 4 (13:19):
Of lost that muscle.
Speaker 3 (13:20):
But now one thing after another, so I do think
CEOs are generally more capable, but each shock requires something different,
and the tear of challenges that we discussed on earlier
podcasts this year I think required a new set of
capabilities to be built. But people are more comfortable building
new capabilities in this world, Blaed.
Speaker 4 (13:38):
What do you think really good ones not?
Speaker 2 (13:40):
As they were resilient, they were not shying away from
asking some of the basic questions. I see too many
CEOs that sometimes don't want to ask a basic question
so they don't look silly in front of their technical
staff or in front of the juniors. Right, and the
really good ones went back to the basics. Okay, what
problem are we solving for each customer? Where what will
be the value created? So those the combination of resilience
(14:02):
and going back to the basics was the winning combo
this year.
Speaker 1 (14:04):
What was the best thing to come out of this
whole tariff chaos that we saw this year?
Speaker 2 (14:09):
It forced people to step back and think, Okay, how
do we make money in this business?
Speaker 4 (14:12):
Where are we irrelevant? What is the value we're delivering?
Speaker 2 (14:14):
And it really had them look at the business and
I would argue for a lot of them to fall
back in love with the business because there was a
momentum they were just building off of.
Speaker 1 (14:23):
Interesting are you seeing companies focus their attention?
Speaker 3 (14:26):
I think this year pushed people to build geopolitical muscle
that they probably needed to build in the long term anyway,
but it really accelerated it. I mean often the people
understood how to deal with tariffs and trade possees were
three and four and five levels down understanding supply chain risks,
not just in your own manufacturing, but deep into supply chains.
(14:46):
We're really not getting the attention that they deserved. And
I think the sharp impact of tariffs, the increases that
are so substantial versus the last eighty ninety years of history,
I think that's caused people to build muscle that will
served them well in the long term, but had not
received as much attention in years prior to this one.
Speaker 1 (15:06):
Rich and lad thanks for your insights today.
Speaker 4 (15:08):
Great to be here, Nice to be here.
Speaker 1 (15:11):
Those of you who would like to learn more about
the CEO Radar can read the full report at Bloomberg
dot com slash CEO Radar, and if you liked what
you heard, we encourage you to subscribe on YouTube or
your favorite podcast platform. I'm Edward Adams of Bloomberg Media Studios.
Thanks for listening.
Because you're a subscriber to this Bloomberg podcast, we thought
you'd be interested in a sponsored podcast called The Ceo Radar,
produced by BCG and Bloomberg Media Studios. It analyzes more
than forty eight hundred Q three earnings calls worldwide to
assess what topics merit a CEO's time and attention. Here's
a recent episode when the company is investing in these
(00:25):
AI pilots. Are they spending too long on them? Are
they giving up too quickly on them? Or is it
just right? I wish it was just right. It's both.
Speaker 2 (00:35):
Actually they're closing some of them too soon and some
of them they're just stinking on for way too long.
Speaker 3 (00:40):
But I think that focus on value creation and particularly
where you can build distinctive value creations, that is the
critical way to be thinking about where and how to
apply AI right now.
Speaker 1 (00:51):
The Ceo Radar reviewed earnings calls at forty eight hundred
companies worldwide to see what's on the agendas of both
CEOs and the market as a whole. I'm Edward Adams
of Bloomberg Media Studios on this episode. I'm joined by
BCG Global Chair Rich Lesser and Lad Lukic BCG Global
(01:12):
Leader Tech and Digital Advantage. Rich and Blad Welcome to
the podcast.
Speaker 4 (01:17):
Great to be here, ed Nice to be here.
Speaker 1 (01:20):
In Q three, tariffs remain the top one or two
topics that were most mentioned during earning's calls, both by
CEOs and by analysts, but the number of mentions went
down from Q two.
Speaker 4 (01:33):
There is a shift that I thought was really interesting.
Speaker 3 (01:35):
And when we did this a quarter ago, all of
the discussions are about policy related topics that will happen.
What will happen. Now it's about, Okay, what are we
going to do? There is still policy uncertainty. It's not
that things won't shift, but now I think everybody realizes
substantial tariffs versus anything we've dealt with historically in decades
are now most likely here to stay, certainly as it
(01:56):
relates to the US, and now we have to navigate it.
And I thought the interesting shift in the types of
questions and conversations that CEOs and ANAUS were having was
really quite reflective of that shift.
Speaker 1 (02:07):
And along those lines, they were talking far more about
growth topics we saw this year, particularly in AI, a
topic we didn't think necessarily could be mentioned any more often.
Than it had been.
Speaker 3 (02:18):
What we observe in our research is a bell curve
of behaviors where you've got about five percent of CEOs
that are really at the cutting edge about how to
embed AI into their core business, reshape how they operate
and invent new business models drive the business. You've got
another thirty or forty percent of CEOs that are well
on that journey, and you've got about sixty percent of
CEOs that are really struggling to get on that curve,
(02:40):
often either six zeros six percent. Right, No, it's a
hard it's a hard transition to make because on the
one hand, you have to change your mindset about how
you're going to translate AI into impact at scale, not
just do interesting pilots, and then you have to change
your mindset to raise Yes, there is an enormous amount
of interesting and important tech in here, but the hardest
(03:03):
part of that change is often the human part of
that change, how you embedded in and processes, leadership skills,
and companies just find that journey to be a bit hard,
and so every year webs are more and more moving
toward the more advanced and their ability to do it,
but it's still a substantial percentage of CEOs that are
struggling on that journey. But for the ones at the
(03:23):
top of the list, I think they're thinking about it
in very sophisticated ways. How do you pick fewer things
rather than more and really deliver them?
Speaker 1 (03:31):
LAD, you're oftentimes down in the trenches with these companies,
not necessarily always at the CEO level. Are you seeing
any disconnect between what rich is reporting at the top
and what you're seeing when you're talking to people two
or three levels down.
Speaker 2 (03:43):
Many times you could have the direction lined up by
the CEO and fully aligned.
Speaker 4 (03:47):
By the executives.
Speaker 2 (03:48):
But if you're running HR and now, you need to
hire igentic engineers that know how to wire these workflows together.
You need to change job descriptions, you need to introduce
new titles, and many times they they don't know how
to do that. They haven't done it before.
Speaker 1 (04:03):
Richard told us that they are About sixty percent of
companies are still struggling to get out of the incubation phase.
Right with AI, If we're on the outside of a company,
how do we recognize a company has moved beyond and
it's begun to really get some ROI from from its
implementation of that.
Speaker 2 (04:20):
I mean, I would say focused on the bottom line results,
like the really good ones immediately. However, we cut the
data and when we look at it, the ones that
have really leaned into AI are growing faster the numbers
are there.
Speaker 1 (04:31):
Are you finding that that CEOs are willing to talk
about that on earnings calls to sort of be public
about yes, we're improving in AI is one of the
reasons why.
Speaker 3 (04:40):
I think some are starting. One of the leading insurers
talked at length about underwriting and how they've really thought
about underwriting differently to be able to go faster and
more effectively. And in commercial underwritings it's often a speed game.
The ability to get to a proposal very soon for
a client is critical to whether you're going to win
the win the bid or not. And so a leading
(05:01):
mining company has talked about how it's automated. A huge
part of Western Australia runs it out of a control
center with TED people uses predictive and enerve AI to
be able to make much smarter decisions about what time
of data fill different kinds of ships, how to run
the whole process. Loreal has talked about beauty Genius. It's
desired to create a more agentic beauty platform that people
(05:23):
can use online and get recommendations, but also fulfilled orders
and do things. And how they just did a major
rollout here in the US and some other places this
year that it's a learning mode, but those are real businesses,
not just a small pilots.
Speaker 2 (05:37):
It's a test to build off of that. There is
need to communicate for several reasons. Son, you need to
get new talent. The talent is now looking at am
I joining a company that will be a winner in
the space, and will I get all the tools in
my hands to be successful. The buyers are looking at
their suppliers and saying are you going to be cutting edge?
And are you going to be pushing on the innovation
curve and on the cost curve fast enough to remain
(06:01):
so the CEOs need to signal both to their employees
and partners in the broader ecosystem that they're on top
of this.
Speaker 1 (06:06):
I want to find out whether or not you're seeing
AI as a job creator or a job killer, at
least at this stage of the process. Lad, you're on
the ground, what are you seeing?
Speaker 4 (06:14):
Yeah?
Speaker 2 (06:15):
Counter to like what we might hear in the media, right.
I'm actively engaged with probably twenty engagements right now. Not
a single one of them has a thesis on reducing
the number of labor. It is about growth opportunities and
growing the business. Now that is in the short term.
Does that mean it doesn't have longer term implications for sure?
Speaker 4 (06:32):
Right?
Speaker 2 (06:33):
But where I'm seeing the winning convoys when you get
the efficiency and then translate it into new value propositions
to customers, right and grow the business. So that's the
conbo that seems to be winning so far.
Speaker 3 (06:43):
I agree with that, but I would add the two things.
One is, we have seen examples I mentioned earlier, the
Australian example where a a mining company can control an
enormous amount of land area autonomously have a control center
with a very small number of people in it. I
mean obviously that has labor displacement from the way they
would have used to.
Speaker 4 (07:03):
Formal we would have operated.
Speaker 3 (07:04):
And then the second thing I'd say is there is
so much capital going into AI and data centers now
it's hard to see how that pays out in the
long term if labor displacement isn't a part of that.
Speaker 2 (07:16):
I'm optim is that it's going to generally result in
net positive number of jobs, but they're not going to
be the same jobs. People will have to be reskilled
and moving to new into new fields, et cetera. And
the ones that embrace this are going to be more
relevant than ever. If you embrace this and do it,
you'd get a superpower and you can be more relevant.
Speaker 1 (07:35):
But at the beginning of the year, there's a lot
of talk about agentic AI AI being able to accomplish
tasks to a degree on its own right, to be
able to book my flight to La get me a hotel,
get me a dinner reservation without me having to get
involved with it, as just one example. Are you still
seeing that emphasis on agentic at the as we begin
to close out the year, or has it has it
(07:56):
shifted somewhat?
Speaker 2 (07:57):
For sure, it's it's still there, and it's in two
specific flavors. One is articulating, are of the possible? Oh boy,
wouldn't it be cool if we could combine all of
these things together? Right, the reality is we're just not
there to pull it off. So where we're seeing agentic
being deployed is in a specific workflow end to end,
but then with a human to act on the decision.
(08:19):
What we're not seeing is and what a lot of
folks are hoping for, is agents talking to agents and
like stringing together a bunch of processes because you still
have accuracies in the eighty to ninety percent range. So
that means if I string together ten steps and each
one of them is eighty percent accurate, at the end
of it, I'm at less than fifty percent accuracy. So
you do need a human in between that is interpreting
(08:40):
and fine tuning the agents within.
Speaker 4 (08:41):
Those specific workflows.
Speaker 2 (08:43):
That's where we are, and for us to enable the
next level, we'll need better data, we'll need better infrastructure.
It was a fantastic catalyst to actually surface a lot
of the basic needs that the companies need to rewire
and rethink on their textag. So it's there as a
catalyst and the promise of what it was can happen,
and companies are leaning in and are committed to that
motion for the years to come.
Speaker 4 (09:04):
Which I don't need to tell you.
Speaker 1 (09:05):
The valuations of the Magnificent seven and other AI related
stocks are scott high. If those valuations were to tank,
much as we saw the valuations of dot com companies
tank during the dot com bubble. Do you think that
companies will continue to invest in their own AI initiatives
or do you think that may have a knock on
effect in terms of how the worldwide corporate environment looks
(09:28):
at AI.
Speaker 3 (09:29):
I think it will have very little effect on the
real economy. It'll obviously have a massive effect on the
stock market, as they represent a high share of total
stock market valuations.
Speaker 4 (09:38):
If that's an aarrea where will occur.
Speaker 3 (09:40):
But I actually think the more companies see the kinds
of impacts they can drive, and the more they can
point to examples even if it's of competitors or in
other industries that they can rise, they need to take action,
that will be what drives momentum. I actually think that
companies are realizing you can fundamentally operate differently with these technologies.
(10:03):
Even if the market is overvaluated, there's no question AI's
capabilities will continue to grow.
Speaker 1 (10:08):
Rich Are you finding that companies are investing in AI
in the right kind of way?
Speaker 3 (10:13):
Obviously a subset are, but I'd say too many more
than half are still at the stage where they're either
investing may need to do pilots and not thinking about
scaling or Equally importantly, they're doing the kinds of things
that are important to stay competitive, to be more productive
all of the many AI tools that come along from
tech players and others, but insufficiently investing to what will
(10:35):
really lead to competitive advantage, which is where you're either
reshaping entire workflows or functions, where you're building new business models.
Speaker 1 (10:44):
So lad when a company is investing in these AI pilots,
are they spending too long on them? Are they giving
up too quickly on them? Or is it just right?
I wish it was just right. It's both.
Speaker 2 (10:57):
Actually they're closing some of them too soon, and it's
some of them they're just sticking on for way too long.
We had a client that for three months was running
a pilot and in an area that had so much
value right and they were evaluating a tool that was
available three months ago, and at the end of it
was lukewarm results and they said, Okay, we're done. Well,
there's so many new tools that got released in the
last three months that can get the performance to the
(11:19):
next level, but they gave up. So if you know
that there is a lot of value in that workflow,
sweat it out, stick with it, don't abandon it too
soon because the pace at which the new tools are
coming is so high. Right on the flip side, there
are a number of them that are seeing good, interesting
results from the pilots, but it's in a process that's
not a bottleneck, and even if you solve it from
(11:39):
ten days to minutes doesn't change the overall outcome. You're
just increasing your cost. But they stick with it because
the technologies, they can show cool demos and it's moving,
but it ends up being a distraction. Stop stop those
much sooner than kind of instead of creating zombies in
the organization.
Speaker 1 (11:54):
So apply AI to the core of your business operations.
Speaker 3 (11:56):
Where there's business value in a very distinct and measurable way,
as opposed to where you can do really interesting stuff
that looks really cool. I mean not that we don't
all like to have a little bit of cool. You
want a little bit of pizaz in whatever you're doing.
But I think that focus on value creation and particularly
where you can build distinctive value creation that is the
critical way to be thinking about where and how to
(12:18):
apply AI right now.
Speaker 1 (12:20):
Since we're almost at the end of twenty twenty five.
One of the questions we want to ask you was
what were the kinds of attributes that CEOs needed this
year to be.
Speaker 3 (12:29):
Effective rich resilience? Like this is another year that could
be characteristic over this entire decade. But I just think
this ability to take unexpected things and figure out how
to navigate them and do it in a way that
both anticipates as best you can, but then can respond
quickly and adapt and then reimagine that set of attributes
(12:51):
is turning out to be over and over again really
critical in this world.
Speaker 1 (12:55):
Are you finding that most CEOs have that skill set
or is it something that any of them are still
reaching for.
Speaker 3 (13:02):
I think they've had to develop it a lot more.
In fact, when I meet new CEOs that I do
a lot of sessions with them, I always say, you
have no idea how much this generation of CEOs is
able to handle resilience. More than six years ago, pre COVID,
it had been so steady for so long, I think
people sort.
Speaker 4 (13:19):
Of lost that muscle.
Speaker 3 (13:20):
But now one thing after another, so I do think
CEOs are generally more capable, but each shock requires something different,
and the tear of challenges that we discussed on earlier
podcasts this year I think required a new set of
capabilities to be built. But people are more comfortable building
new capabilities in this world, Blaed.
Speaker 4 (13:38):
What do you think really good ones not?
Speaker 2 (13:40):
As they were resilient, they were not shying away from
asking some of the basic questions. I see too many
CEOs that sometimes don't want to ask a basic question
so they don't look silly in front of their technical
staff or in front of the juniors. Right, and the
really good ones went back to the basics. Okay, what
problem are we solving for each customer? Where what will
be the value created? So those the combination of resilience
(14:02):
and going back to the basics was the winning combo
this year.
Speaker 1 (14:04):
What was the best thing to come out of this
whole tariff chaos that we saw this year?
Speaker 2 (14:09):
It forced people to step back and think, Okay, how
do we make money in this business?
Speaker 4 (14:12):
Where are we irrelevant? What is the value we're delivering?
Speaker 2 (14:14):
And it really had them look at the business and
I would argue for a lot of them to fall
back in love with the business because there was a
momentum they were just building off of.
Speaker 1 (14:23):
Interesting are you seeing companies focus their attention?
Speaker 3 (14:26):
I think this year pushed people to build geopolitical muscle
that they probably needed to build in the long term anyway,
but it really accelerated it. I mean often the people
understood how to deal with tariffs and trade possees were
three and four and five levels down understanding supply chain risks,
not just in your own manufacturing, but deep into supply chains.
(14:46):
We're really not getting the attention that they deserved. And
I think the sharp impact of tariffs, the increases that
are so substantial versus the last eighty ninety years of history,
I think that's caused people to build muscle that will
served them well in the long term, but had not
received as much attention in years prior to this one.
Speaker 1 (15:06):
Rich and lad thanks for your insights today.
Speaker 4 (15:08):
Great to be here, Nice to be here.
Speaker 1 (15:11):
Those of you who would like to learn more about
the CEO Radar can read the full report at Bloomberg
dot com slash CEO Radar, and if you liked what
you heard, we encourage you to subscribe on YouTube or
your favorite podcast platform. I'm Edward Adams of Bloomberg Media Studios.
Thanks for listening.
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