Interest rates hold steady

This article is an online version of our Off to Lunch newsletter. Sign up to receive it straight to your inbox here.

As expected, the Bank of England has held the interest rate at 5.25 per cent for the seventh time in a row. We've included a more detail below but now, we're going to focus on something a little different.

A lack of talent has long been hailed as one of the biggest challenges facing business leaders. The Business Barometer report released by The Open University, in partnership with the British Chambers of Commerce (BCC), has reiterated just how problematic this challenge is. In particular, it reveals a theme that many leaders we speak to are struggling with: AI adoption.

OpenAI’s release of GPT-4o last month has shaken up the consumer view of what is possible with AI. However, countless leaders don’t even know where to start with embedding the tech into their businesses. At The Times CEO Summit today, Simon Freakley, CEO of consultancy Alix Partners, said that “AI is the number one opportunity, not the number one threat”

The Business Barometer found that 64 per cent of organisations surveyed have reported a lack of confidence in applying either new AI or green technologies. The report’s findings come just a week after the release of a similar poll by talent solutions provider Kelly, which found that 55 per cent of leaders believe that AI is critical for improving their businesses. Yet most don't know where to start.

The futurist and strategic business advisor Bernard Marr has some advice on that point:

“Start with your strategic goals, not the technology. AI is not a panacea that magically resolves all business challenges. Before diving in, companies need to identify clear use cases where AI can have a meaningful impact that is aligned with business objectives. Whether it's improving supply chain efficiencies, personalising marketing efforts or enhancing customer service, the key is to ensure that AI solutions address specific pain points and add tangible value.”

When adopting AI, it’s vitally important to remember that it is not a silver bullet. The Harvard Business Review estimates that as many as 80 per cent of AI projects fail. This is almost double the rate of corporate IT project failures a decade ago.

The aforementioned report from Kelly spoke to 1,500 senior executives, as well as 4,000 workers. Some 73 per cent of employees expected AI to impact their roles in the near future, while 63 per cent of them had mixed or negative feelings towards AI. The report, titled Building a Resilient Workforce in the Age of AI, encouraged leaders to bring their workforce with them as they implement new systems to avoid disruption.