BCG Henderson Institute

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The release of ChatGPT in late 2022 created a groundswell of interest in generative AI. Within hours, users experimenting with this new technology had discovered and shared myriad productivity hacks. In the weeks and months since, organizations have scrambled to keep pace—and to defend against unforeseen complications. Some organizations have already adopted a more formal approach, creating dedicated teams to explore how generative AI can unlock hidden value and improve efficiency.

For CEOs, however, generative AI poses a much bigger challenge. Today’s focus might be on productivity gains and technical limitations, but a revolution in business-model innovation is coming. Much as Mosaic, the world’s first free web browser, ushered in the internet era and upended the way we work and live, generative AI has the potential to disrupt nearly every industry—promising both competitive advantage and creative destruction. The implication for leaders is clear: today’s breathless activity needs to evolve into a generative AI strategy owned by the C-suite.

This is no small task, and CEOs—who are likely several steps removed from the technology itself—may feel uncertain about their next move. But from our perspective, the priority for CEOs isn’t to fully immerse themselves in the technology; instead, they should focus on how generative AI will impact their organizations and their industries, and what strategic choices will enable them to exploit opportunities and manage challenges. These choices are centered on three key pillars: potential, people, and policies.

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