This is what will make a business win in in the post-AI world

What comes after competence

If we are honest, mediocrity has always been enough.

The world is full of mediocre companies, mediocre products, mediocre consultants, all making a perfectly good living. In fact it’s often better than good. There are billion dollar mediocrities out there.

Billion dollar companies that don’t do anything particular special or new - but who though solid tactics and hard work have found their place in the world.

I know this, because always been a problem for my business, selling strategy.

I’ve always had to struggle with the reality that, I’ve said many times before, is you don’t really need great strategy to be successful. The kind of stodgy, slightly-bullshitty but more-or-less sound strategies most companies create tend to do the job.

Me sitting on the sidelines yelling “that’s not a real strategy!”, or “all your competitors do the same!” is pretty weak sauce, since in reality these companies don’t have to be spectacular to get where they want to go.

They just need to be competent.

But today I want to ask you a question:

Is this still true in the world we’re entering?

Are competence, diligence, smart thinking, and execution still the “moats” they have always been? And if they’re not (spoiler alert), what is the new threshold of success?

This is the big one people, so please, take 15 minutes, and really think about it with me.

The commodification of competence

A few weeks ago I wrote a piece that struck a bit of a nerve, arguing that no matter how the world changes, one thing always remains constant:

That which is difficult and rare remains valuable.

What is valuable is not a constant. It’s not based on any intrinsic qualities. Water is more valuable intrinsically than any product of any company on the entire planet - but it’s a commodity, so you can’t make a great business out of selling it.

Instead value arises form desirability and scarcity. Things people want which are hard to get from elsewhere. This was true yesterday, is true today, and will be true forever.

We need to tattoo this idea onto our foreheads, because if we don’t we are likely to be horribly disturbed by the emergence of AI. Why? Because this annoying technology has almost instantly rendered all sorts of once-scarce things commonplace.

• Research

• Content

• Copy

• Analysis

• Information

• Expertise

…broadly speaking all this stuff that was gold two or three years ago has been turned to lead. Value is being sucked out of the economy at an alarming rate. And so many things that we thought were our edge are suddenly totally indefensible.

The details of how this unfolds will obviously differ for each company. But one thing that is pretty universal that we’re soon going to discover is this:

Competence doesn’t cut it anymore.

Simply making a business with a clear customer, a good offer, solving a problem, well researched, well executed, with clear priorities, and good execution - all this stuff that typically adds up to “strategy” - is no longer going to be special.

It’s going to become the baseline.

I mean let’s face it, I may not like it any more than you do, but anyone can sit down in front of AI now and get it to interview them and develop a solid strategy and set of priorities for their business.

Will it be amazing? No.
Will it be special? No.
Will it be effective? Probably not.

But none of that really matters, because remember before now, most businesses had none of this stuff.

If AI takes you from a 1/10, to 5/10 that is still a massive improvement. And besides, let me tell you from experience, the reason most leaders do a strategy exercise isn’t because they want an “amazing idea”. It’s simply because they want someone to tell them what to do; to give them a sense of psychological relief.

And if an AI can do that?

Then great.

They get their relief. They get a plan. And they can crack on with it and keep themselves busy - never mind about the “quality” of the direction. (And of course remember, human strategists are just as capable of coming up with bad ideas as AI is, so it’s all a wash).

Either way, the upshot of this is that everyone becomes competent.

Everyone becomes “enough”.

And yet because of the universal law of scarcity, this means nobody is enough. The baseline moves, the market gets flooded, and all of those competent operators who have been sitting pretty for the past 10, 15 years find themselves under assault.

This is what’s coming.

A world of perfectly optimised, perfectly competitive, perfectly executed companies - all with access to the same tools, the same research, the same intelligence, the same playbook.

People think AI is making things easier?

No, it’s making them a hell of a lot harder. Because we now have to calibrate our brains to a new standard of success that is far beyond what we were shooting for before. A new level we need to reach.

The question is: what is it?

The charismatic business

Again let’s turn back to the core principle of hard and rare. Anything that can be produced cheaply, easily, and quickly with the help of AI is not hard and rare. That is axiomatic.

So what is?

Well those who have been following the AI debate closely will be familiar with this idea of technological breakthroughs “abstracting skill up”. In other words, what it takes to succeed in a given field rises up one click, to a higher (rarer) level.

A very basic non-AI example of this can be seen with photography. For a long time the barriers to being a successful photographer were:

1. Owning the equipment

2. Knowing how to use it

Both of these were rare, and thus were sufficient to let you make a living in that space. However now we all have the equipment in our pocket, and it’s been optimised in such a way as that anyone can use it to 95% of the technical level of the pro-photographers of the past.

The result of this hasn’t been that pro-photographers have vanished. Instead the necessary attributes to succeed as one have been “abstracted up” a level, to harder-to-replicate skills such as composition, subject management, and taste.

We need to apply this precise same logic to business strategy as well.

What were the prior success benchmarks that have now been commodified, and won’t be sufficient anymore?

• Research

• Analysis

• Positioning

• Prioritisation

• Planning

• Proposition development

• Tidying your thoughts

• Execution

…basically all the bog-standard “stuff” of strategy.

So if that’s all table stakes now - like being able to operate a camera - what’s the new version of it abstracted up?

Here are some things we know for sure:

• It can’t be anything AI can do

• It can’t be anything that’s super easy

• It probably can’t be anything very cheap

So where does that leave us? Well it leaves us with a version of strategy that isn’t only competent, but which also has qualities which are uniquely human and impossible for AI to generate independently:

• Vison

• Meaning

• Adventure

• Romance

• Ambition

…and above all, charisma.

This is the concept of the charismatic business.

A business built on a strategy that doesn’t only “make sense”, but which is actively compelling and exciting to other human beings.

This is not a new idea. Not remotely. It has always existed. The companies that people have always loved to talk about - Jobs-era Apple, Patagonia, SpaceX, Brunello Cucinelli, Liquid Death, Stripe - these are all examples of charismatic businesses.

To anyone who’s worked in the world of startups or fundraising, you will also recognise that there’s a difference between a business with a “good idea”, and a business with a magnetic idea that attracts outsized attention and investment beyond the pure numbers.

What makes the charismatic businesses different (and the reason such a strategy can’t be generated by AI), is that it goes beyond what is “necessary” or “sensible” or “the result of the data”, and pushes through to creating something utterly new as a result of a personal vision.

Many of us have been lulled into believing that all business is nothing more than an exercise in linear-problem solving. But the reality is that many businesses (and all of the great ones) never “needed” to exist at all. They instead came about because of a creative vision that someone wanted to bring into the world.

They do not exist merely to “solve pain points” - the strategic focus of pretty much all online business advice. Instead they exist to extend human capability in an unpredictable way, or lend a new angle to the human experience.

This fundamental sense of “unnecessariness” - or dare I even say, artistry - is what moves the charismatic business out of the commodified space of competence, an into something far more defensible.

The charismatic business has an inspiring goal, and a mischievous way of getting there. It does things it doesn’t need to do. It takes risks it didn’t need to take. It has a clear point of view that speaks to people on a heartfelt level, not merely a rational one.

The charismatic business doesn’t “serve customers” - it creates them. It builds desire for itself; desire that didn’t exist until you showed people the thing, making them want it.

The central idea of the charismatic business has all of the trappings of “good strategy”. It’s clear, unique, produces value, is hard to copy, etc. etc. But it also has artistic flair and magnetism. When you tell it to people what you’re doing, they don’t say “yes that makes sense”. Instead they say “wow that’s cool”.

This magnetism then enables the business to outperform the market by:

1. Attracting investment

2. Attracting talent

3. Attracting press

4. Attracting customers

…and ultimately attracting that most valuable of all commodities in this era: attention.

Efficiency is out --> excitement is in.
Analysis is out --> artistry is in.
Competence is out --> charisma is in.

And it should be blatantly obvious to you as you read this whether your business has this quality. Whether it is built on a single clear idea that attracts all those things.

Assuming not, what do you do about it?

The anatomy of charisma

By this point, I hope you’ve noticed something quite basic but exciting:

1. Most companies out there are really boring

2. AI is not going to change that in any meaningful way

So the goal is wide open for the charismatic approach - if you know how to do it.

Now like I said, the whole point of this is that it’s really difficult. If it wasn’t difficult, then there would be no value in it, no leverage. So nothing I can tell you here is going to magically enable you to snap your fingers and do it tomorrow.

I would also say that by definition, there is no formula to this. Anything that can be broken down to a formula is now commodity. So that would defy the point.

But even so, there are some common characteristics worth noting.

The first is the fundamentally additive nature of the charismatic business. By which I mean additive to the human experience; they create something new and unthought of before.

Most businesses out there have a fundamentally mechanistic character, which means:

1. They identify a pain point

2. They solve it

They analyse the world as it is, and determine what’s necessary. What’s needed. What might add greater efficiency or convenience to the status quo. Although there’s nothing wrong with this, but it’s very easy to create and copy such an idea. This is the mentality of the machine, the widget. And it’s most within the capabilities of AI.

The charismatic business on the other hand is less focused on the world as it is, and more on the world as it might be. On putting something out there that there isn’t a formulaic requirement for, but which might have huge demand were it to exist.

This makes business a fundamentally artistic endeavour, as it is the role of the artist to show people something they’d never noticed or imagined before.

Steve Jobs was of course the ultimate business-artist, and Apple (the ultimate charismatic business), was a perfect example of a vision that extended human capabilities - not a “solution to a problem”.

Other less grandiose examples might include Circle, the online community platform, because again it extends human capability. And of course our old friend Liquid Death, because even in a trivial and silly way, it adds a new perspective and texture to the world as we know it.

Ultimately we are talking about ushering something new into existence - innovation in some form. And as you’ve heard me say many times before, a business that doesn’t create something new, is a business that shouldn’t really exist in the first place.

That I would say is the core strategic difference.

Beyond that, I believe charismatic businesses contain four basic components - of which most businesses have none. Please note these operate in addition to basic strategic fundamentals, like an accelerant to them.

They are:

• A personal POV

• A risk

• An expression

• A change

Let me whistle through them.

A personal point of view is an opinion that drives what the company is doing. It’s not a “fact”. It’s not something that can arise from analysis. It’s something that the leader of the company believes in, that has emerged from their life experience, that attracts like-minded people, and repels those who think differently. It is where the core vision emerges from. It is central, and by far the most non-AI bit.

A risk is then something the company does which departs from the norms of the category in an exciting way which gives a sense of “adventure” and “danger” to what it does. People are always attracted by boldness and bravery, so you need something that fits under that banner; a sense of venturing into “lands unknown”.

An expression is basically some form of flair or overreach in what the company does. Something to show that not everything you do is purely utilitarian; something that demonstrates belief in what you do, and that you are enjoying yourself.

A change is the way the company is making the world different by its presence. This doesn’t have to be anything especially epic or worthy, but there absolutely must be a desire to change things. This is the natural result of doing or creating something new, and so is automatically the purpose of the whole endeavour.

I really want you to notice how you don’t “need” any of this stuff to run a highly competent business.

This is all beyond competence because we are abstracting up as a result of AI.

This is stuff that has to be drawn out interpersonally, and which requires activation of more than the analytic brain - it takes insight, humour, stimulation, heart.

Most people reading this will perceive these things as “nice to haves”, but not essential, or not relevant to their business because of whatever blah blah blah reason.

Or they will say something like “sure that was all well and good for Apple and SpaceX, but I’m just some B2B service business who doesn’t need any of that”.

Sorry, but I’m going to go all CAPS on you here:

THIS IS YOUR OLD-REALITY PROGRAMMING TALKING.

Yes, you’re right, in the past this kind of thing was the preserve of these special sexy companies - and yes, your widget-like B2B outfit didn’t need to do this. But that is the past. The floor has risen, but your brain hasn’t adapted yet.

These iconic business from the old world were indeed doing things that were fundamentally unnecessary. That’s what made them icons, their unreasonable levels of flair and creativity.

But where we’re going, this isn’t going to be the stuff of icons anymore. It’s just going to be the stuff of good business. Because outside of some deep-rooted structural advantage that you probably don’t have, these are the only things that are hard, rare, and therefore valuable.

I’m not just theorising here - I’m going through this too.

I have had a horrible couple of months adjusting to the realisation that just telling people “how to do strategy” is no longer hard and rare. My ability to explain this stuff used to be my edge! Now, why not go on ChatGPT and say “explain strategy to me like I’m 13 years old”?

I am going through my own process of abstracting-up, bringing even more of my point of view and expression into my work.

So my final plea to you is this.

Please don’t settle for competence.

Please don’t measure yourself by the old yardstick.

Please don’t assume that your AI gains are “gains” in a true sense; they are merely the tax you pay to stay standing still.

AI is going to make every company on the planet smarter. But it won’t make any of them more interesting and magnetic.

That bit is still up to you.