Everyone’s Betting on AI. The Data Says It’s Not Paying Off. Yet.
Q4 budget season is here. Money is about to get spent. And I’ve got some data that might impact how you spend it.
As part of our ongoing leadership study, we asked leaders a simple question: Which of the following does your organization currently invest in to improve innovation, problem solving, or work systems?
Here’s what they told us.
Where organizations are investing
First, the good news: not one organization said “none of the above.” Everybody is trying. That matters.
And no surprise, AI is running away with first place. Six out of ten organizations are putting money into AI tools or AI consulting. That’s more than any other investment by a mile.
So the big question is: is it working?
The honest answer: not yet.
When we compared organizations investing in AI to those that aren’t, we found no significant impact. Not on innovation success. Not on flawed work systems. Not on culture. Not on growth.
Nothing. Zip. Nada.
Now, before anyone throws their AI budget out the window, let’s be fair. I see two possible explanations:
It’s still early
A lot of these investments are brand new. It may simply be too soon for the tools and training to show up in results. Give it time.
Nothing changed in the system
This is the one that worries me. People got shiny new tools, but the same approvals, the same handoffs, and the same habits stayed exactly where they were.
The “old school” investments are winning.
Here’s where it gets interesting. The next two most popular investments aren’t flashy. They don’t make headlines. But they’re delivering.
Leadership and employee training and innovation and management consulting both had a bigger impact than AI on the measures that really matter:
- Everyone in the organization is working smarter than they were a year ago
- The organization has a culture of proactive engagement
- The organization is making smarter decisions today than it was one year ago
- Confidence in the reliability of the organization’s system for creating and executing more profitable products, services, customers, and markets
- Overall success with innovation
Why? My hunch: good training and good consulting change how people think and how work gets done. That’s the whole game. Tools help you do work. Systems change the work itself.
There is no silver bullet.
Now for the finding that made me sit up in my chair.
Companies investing in six or more areas reported 76% higher innovation success than companies betting everything on just one.
Overall innovation success by number of investment areas
Average rating of overall success with innovation, 0–10 scale.
Let me be straight with you: it’s not a perfect staircase. Scores bounce around in the middle, so just piling on more stuff isn’t the answer.
But look at the top. The organizations crushing it aren’t hoping one magic investment will save them. They’re building skills, bringing in outside expertise, and fixing their systems. All at once. On purpose.
Don’t just spend money. Spend it on purpose.
Get crystal clear on the change you want to see. Then invest in the paths most likely to make it happen. That probably means more than one bucket. And whatever you buy, make sure it actually changes how work gets done. Otherwise you’re just buying hope.
You can do this. And we’d love to help.
Let’s talk about your 2027 plan.
Whether you’re putting this year’s budget to work or mapping out next year, We're happy to have an honest conversation about what will make the biggest difference for your organization.