Poor strategy. It’s just not getting any love.

Strategy is used to being pushed aside by more brazen trends. Digital transformation kicked sand in its face a few years ago. Debates about remote and hybrid work captured CEO attention at strategy’s expense. More recently, AI has buried strategy in an avalanche.

Is strategy still important? Why is it being ignored?

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I'm Dead

Let’s start with AI. What happens to business strategy in an era when anyone can access the same knowledge and problem-solving power via AI? Has AI killed strategy?

AI has certainly made some old strategies ineffective. Companies with moats built purely on IP or knowledge—Chegg or Getty Images—are the first to be affected. Google Search is looking a little peaky, too.

But it’s not just companies built on knowledge—it’s the problem-solvers, too. Customer service, for example, is mostly about problem-solving, and human customer service jobs are among the first victims of AI agents. A strategy of superlative customer service may no longer create lasting value. It becomes table stakes when everyone has access to the same AI tools.

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Mirror, Mirror

Weirdly, AI has its own strategy problem. The ability to match competitors’ capabilities quickly (DeepSeek, anyone?) means that differentiation is hard. There is also a remarkable lack of stickiness for most people. As long as switching costs remain low, it’s not clear who the AI winners are.

AI creates a similar problem for other types of software. As AI takes over more and more software coding, software becomes fungible. We’re already hearing about ‘single-person’ companies. Forget Marc Andressen’s ‘software is eating the world.’ AI is eating software, buddy.

But that doesn’t mean that companies that run on software can’t have a strategy. It just means that one of the tools for executing strategy, writing code, has gotten cheaper and faster—and easier to match.

Knowledge, problem-solving, software are all eroding as sources of advantage. If strategy is to survive, it’s going to have other moves.

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Classic Rock

So what’s left to build advantage?

  • Proprietary data. Maybe you have years of data about customers' use of your equipment. Or data about traffic patterns collected from a trucking fleet your company owns. Or behavioral data about how each of your internally developed customer segments respond to product positioning via email. You’re in luck! If you can keep that information under wraps, you just might be able to use it to build long-term advantage.
  • Execution. Azeem Azhar wrote in Bloomberg about how AI will shift companies’ focus: ‘from “Can we think of a solution?” to “How quickly can we implement and validate these ideas?”’ Speed of execution may be an advantage, and AI may amplify it for nimble companies.
  • Physical infrastructure. We’ve been in an era where the highest returns on invested capital accrue to businesses like software and healthcare that are built on intangibles. Is that about to change? As AI makes it harder to build moats in knowledge-intensive industries, will old-school physical assets—a network of car dealerships, a capital-intensive manufacturing facility—start to have a relative advantage?
  • Brand—maybe. If you ask experts how companies will compete in the AI era, 'brand' is often the answer. That's great for incumbents, but not helpful for new entrants. Brand equity does not fall from the sky. It needs to be developed over time with a repeatable customer experience—consistently great product design or a commitment to sustainability. If AI levels the playing field on some types of brand-building, like product design, building differentiated brand experiences may become more difficult.
  • Deals. The hit rate for successful acquisitions is pretty low. But this might be a land-grab moment when companies should snap up assets that offer #1-4 above.

None of these potential sources of competitive advantage is new. What *is* new is their relative importance if AI delivers on its promises.

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Let's Talk Strategy

When we are not talking about tariffs and their negative effect on the economy, AI is dominating business-related conversations. You can see why people who are starting the AI party don’t want to talk about strategy—they are struggling with it themselves—and that may contribute to why strategy discussions seem muted at the moment.

But for goodness sake, if there was ever a need for strategy, it’s now. Even without geopolitical uproar, massive change is taking place. Technology, energy, communication—it’s shifting as we speak, and every business needs new strategies to survive and prosper. C’mon everybody, let’s talk strategy!