The Illusion of AI Strategy

"So much of business is based on gut feel rather than any understanding of the environment. We mostly use data not as a way of understanding the environment, but as a way of justifying gut feels that we’ve already taken."

Artificial intelligence is rapidly transforming industries, promising breakthroughs in automation, efficiency, and competitive advantage. Yet, most organizations are approaching AI adoption with a deeply flawed mindset.

Executives pour resources into AI projects, invest in emerging technologies, and follow industry trends, assuming that these actions constitute a strategy. But in reality, they are flying blind—chasing AI without a clear understanding of where it fits within their business model, competitive landscape, or long-term vision.

In this episode of Fractional, Simon Wardley, creator of Wardley Maps, challenges the conventional wisdom around AI adoption. Drawing on his experience helping Canonical (Ubuntu) grow from 3% to 70% of the cloud market in just 18 months—overtaking Microsoft and Red Hat with a fraction of their budget—he explains why AI without a structured approach leads to wasted investment, strategic misalignment, and eventual failure.

The difference between organizations that leverage AI for sustained advantage and those that burn through resources chasing hype comes down to situational awareness—the ability to map the landscape, anticipate power shifts, and execute decisions with clarity.

Wardley Maps provide a methodology for doing exactly that.

Why AI Without a Map is Like Playing Chess Blindfolded

Every business operates within a complex ecosystem. Supply chains, customer needs, technological capabilities, and market dynamics all shift over time. Yet, many organizations treat AI as a bolt-on solution rather than a fundamental shift in how their industry will evolve.

Wardley Maps help organizations visualize their competitive landscape, understand the evolutionary trajectory of key technologies, and determine where AI investments will create real strategic value.

In contrast, companies that ignore mapping make decisions in the dark. They follow the latest AI trend—whether it’s large language models, generative AI, or predictive analytics—without fully understanding where these technologies fit within their business.

The result? AI investments become expensive experiments rather than drivers of long-term value.

According to Wardley, this is the equivalent of playing chess without seeing the board.

• Are you developing proprietary AI in areas where commoditized solutions already exist?
• Are you investing in AI capabilities that do not differentiate your company from competitors?
• Are you unknowingly positioning your business to become dependent on closed AI platforms controlled by a handful of dominant players?

Without a strategic map, organizations cannot answer these questions with confidence.

"You will play a game of chess against someone who can see the board, and you will lose. All your big data systems, all your sequences of success—none of it will matter if you can’t see the environment." – Simon Wardley

The Power Struggles Shaping AI’s Future

AI is not just a technological transformation—it is a fundamental restructuring of power in business, governance, and society.

Historically, major technological shifts have followed a pattern. Innovations begin as niche, high-cost solutions, then evolve into standardized products before becoming commoditized utilities. We have seen this play out in electricity, computing, and cloud infrastructure—and AI is following the same trajectory.

Wardley warns that most organizations fail to recognize these evolutionary patterns and therefore misallocate AI investments.

• Some AI capabilities are still emerging and can offer competitive advantage if leveraged early.
• Others—such as foundational AI models—are rapidly becoming commoditized, meaning that companies investing heavily in proprietary solutions today may soon find themselves competing against low-cost alternatives.

"The trick to strategy is not to bet on the latest technology, but to understand when to exploit the industrialization of one and when to invest in the genesis of another." – Simon Wardley

In highly commoditized areas of AI, differentiation will not come from owning the technology itself but from how companies build on top of it. Wardley argues that organizations should focus on leveraging AI to augment core strengths, rather than reinventing capabilities that will soon be available off the shelf.

At the same time, the AI landscape is being shaped by power struggles that extend beyond business competition.

The control of AI models, training data, and infrastructure is increasingly concentrated in the hands of a few major technology firms. While some companies claim to offer "open-source AI," in practice, many of these models are only partially open, with critical components—such as access to proprietary datasets—remaining closed.

For enterprises and governments, this raises serious strategic concerns:

• If your AI infrastructure depends on a handful of companies, do you control your competitive future, or are you at the mercy of external platforms?
• Is the promise of open-source AI real, or are companies engaging in “open-washing”—offering partial access while maintaining power over critical aspects of the technology?
• Are governments and regulatory bodies thinking about AI primarily through the lens of risk management, while ignoring the long-term implications of technological dependency?

Wardley argues that leaders who fail to account for these dynamics risk losing control over their own AI roadmaps.

Mapping AI for Competitive Advantage

In this episode, Wardley outlines how organizations can use mapping techniques to navigate AI adoption strategically rather than falling into the trap of blind experimentation.

1. Start with User Needs

AI adoption should not begin with technology-first thinking. Instead, organizations should map their value chain to understand:

• Who are our users?
• What do they need?
• How do different components of our business deliver value?

By grounding AI strategy in user needs rather than technology hype, businesses can make data-driven decisions about where AI provides real leverage.

2. Identify Where AI Fits in the Value Chain

Once user needs are clear, AI should be positioned within the broader operational map of the organization.

• Are there areas where AI can automate inefficiencies?
• Can AI enhance existing capabilities, or does it require completely new workflows?
• Is AI being deployed in areas that will remain competitive advantages, or will these capabilities soon become industry-standard?

A Wardley Map helps visualize these relationships, showing how AI should be integrated into the broader system.

3. Avoid AI Inertia

One of the biggest risks in AI adoption is organizational inertia—the reluctance to change existing processes, even when the landscape is shifting.

"There’s almost a fairy tale belief in the power of AI. People think they’ll just go to ChatGPT and say, ‘transform my legacy environment,’ and it will magically do it. That’s wishful thinking." – Simon Wardley

Wardley emphasizes that just because a company has invested in a certain AI path does not mean it should continue down that road indefinitely. Mapping helps leaders recognize when AI capabilities that were once differentiators are becoming commoditized—signaling the right time to pivot.

4. Recognize the AI Ecosystem as a Whole

AI strategy does not exist in isolation. Organizations must understand:

• How are competitors evolving their AI capabilities?
• Where are industry trends headed?
• Which AI platforms and providers will shape the competitive landscape?

Mapping these relationships helps executives avoid dependency traps and strategically position their AI initiatives for long-term success.

AI is Reshaping Business—Are You Leading or Reacting?

The way organizations approach AI today will determine whether they emerge as leaders in their industry or struggle to compete in a shifting technological landscape.

Simon Wardley’s raw, unfiltered insights in this episode provide a new way of thinking about AI adoption—not as a collection of disconnected experiments, but as a strategic process that must be mapped, measured, and continuously adapted.

If you are responsible for AI adoption in your company, this conversation will change how you think about strategy.

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