The Four Phases of AI Transformation
The difference between opportunity and disruption is having a vision for the change. To provide clarity for this I’ve developed a four-phase framework for leaders ready to move from AI tinkering to AI transformation.
AI transformation is about more than the tools. It’s about having a vision for change, and setting a direction that your company can grow towards. This is about raising your sights beyond short term productivity gains towards to more transformative potential of the techology in service of your mission.
It is about bringing your people along for the journey. If you signal early enough it becomes an exciting opportunity for growth and learning and will facilitate engagement rather than fear.
Let’s get into it.
Phase One: Efficiency Gains
This is where everyone starts, and for good reason. The initial goal is to equip your team with AI tools to save time every day.
This usually starts with getting pro or enterprise subscriptions to LLMs like ChatGPT. You might start recording meetings and transcribing them with Fireflies; using Gamma to produce presentations; Claude to analyse spreadsheets; or Descript to edit video clips.
But don't just hand out licenses and walk away. You should invest in training to ensure people use the tools optimally for their work. This is why companies like Standard Bank are making AI training compulsory for all their thousands of staff. People aren’t automatically enamoured of this technology, and if you don’t support their use with training and policy they’ll revert to old innefficient and habitual workflows.
Phase Two: Operational Integration
Once your team is comfortable with individual tools, the focus shifts to embedding AI into core business workflows.
This is about moving from personal shortcuts to systemic improvements. You’re probably working with AI process consultants, partnering with key vendors, and upskilling your inhouse tech team to work with AI enabled processes.
You might use an agentic automation tool like n8n or Zapier to automatically insert AI into processes that previously required human cognitive effort. This can save hundreds of hours, and actually improve accuracy and speed.
The maths here is quite staggering. If you’re a small business you might spend 10 hours to develop a process that saves a team member just 15 minutes a day, that works out to a saving of 60 hours a year.
But it’s not just time saving, it may be about an improvement in the speed or quality of responsiveness. AirFrance, for example, integrated Salesforce’s “Einstein” into their customer support process.
Phase Three: Strategic Differentiation
This is the pivot point. It's where you move beyond saving time and start to build proprietary AI capabilities to create unique products or services. This is work that simply wouldn't be possible without AI.
For example, Spotify doesn't just use AI to organize music—they built Discover Weekly, a personalized playlist that becomes more valuable the more you use it. Or take Grammarly, which went from simple spell-check to an AI writing assistant that understands context and tone.
Even smaller companies are doing this. For example, a local real estate agency might build an AI that analyzes neighborhood data, school ratings, and market trends to give buyers hyper-personalized recommendations. Or a accounting firm could create an AI system that not only processes tax returns but predicts future tax scenarios and suggests strategic moves based on each client's unique financial situation.
It’s perhaps a silly example, but the hugely popular Arnold's Pump Club Podcast and the Pump Club app is not actually Arnold Schwarzenegger, but rather an AI that been trained on his voice, knowledge, and fitness wisdom to provide personalized fitness and health guidance. With the training data in place, a team can now run and optimise the experience for users while Arnold gets on with living his best life.
At this stage you’ve got a team working on this full time. It’s a least one person’s full time job to manage and improve this experience.
Phase Four: Organizational Transformation
This is where you have the courage to disrupt yourself. This isn’t going to happen to every business or every industry, but for many it’s just a matter of time.
This is Google’s current pivot from search being their main service to AI everything. It’s Nvidia moving from making graphics cards for gamers, to being the chip-making powerhouse behind the AI hardware revolution.
A traditional law firm might transform into an AI-powered legal services platform, offering 24/7 contract analysis and legal guidance at a fraction of traditional costs. A cement delivery busines might win their market by integrating renewable energy, IOT, sensors, and self-driving vehicles to massively cut costs, improve efficiency, and reduce their carbon footprint.
At this stage, you're not just using AI as a tool or even as a product feature. AI becomes central to your value proposition and business strategy. This may take 5+ years but if you don’t start working towards that vision today you aren’t going to have the capability, capital, our courage to make the shift when the market moves.
A Journey of Transformation
The greatest risk today is assuming that your current ways of working will be sustainable in 5 years. The competitive landscape is being redrawn, and companies are winning by doing things that were previously impossible. You need to have a bold vision for what your business can become and start building it today. If you do, the rewards could be immense.
This isn't a solo mission—it requires commitment from leadership to invest in people and technology together. It's about building the future with intention, with your entire team.
