AI can lead to strategic collapse if strong plans fall short

In an era of rapid change, artificial intelligence (AI) isn’t a novel idea anymore – it’s what’s changing the world and industries around us. In areas ranging from healthcare and finance to manufacturing and retail, AI-fueled plans hold the potential to look deeper, work faster, and make choices described as smarter.

However, even some of the strongest companies in the world have faltered, despite having detailed plans and access to state-of-the-art AI tools at their disposal.This paradox, where well-known companies fall even though they have implemented strong AI-driven strategies, warrants closer examination.

A “strong plan” has long meant digging deep into the details, setting sharp, measurable goals, and carrying them out with the kind of order you’d see in a neatly stacked row of files. AI provides companies with sharper analytical capabilities, more innovative predictive tools, and automation that operates in the background, making strategic planning feel more precise than ever. Precision alone won’t keep you alive; even a perfect aim and vision can’t stop the cold wind biting at your hands.

Even with AI running the show, strategic collapse can occur for various reasons — a missed signal, a flawed assumption, or a decision made too late. Even the most innovative strategies can fall apart when people put too much faith in AI, fail to adapt, fumble the follow-through, or ignore whether the culture’s ready, like trying to sail with a shiny new boat with no wind.

AI gives organisations powerful tools, but it can also create a false sense of certainty. Companies sometimes assume that having advanced AI systems automatically secures their competitive edge. This overconfidence can lead to complacency, where firms rely too heavily on AI outputs without questioning underlying assumptions. For instance, Kodak, although predating the AI era, illustrates a timeless lesson: technological innovation alone cannot save a company if leadership fails to adapt. In the AI era, a modern equivalent could be a company that invests heavily in AI analytics but ignores shifts in consumer preferences or competitive threats.

Even the best AI-driven strategy can fail if a company does not adapt. The business landscape is changing faster than ever due to the rapid advancement of AI innovation. Competitors can disrupt markets with new models, and customer expectations evolve rapidly. Like, Nokia’s fall in the smartphone industry is a reminder that even market leaders with strong strategies can lose their position if they cannot pivot quickly. In the age of AI, adaptability means not only adopting AI tools but also continuously evolving them to meet emerging needs.

A well-designed AI strategy must be supported by strong execution. This requires alignment between leadership, technology teams, and operational units. Miscommunication or resistance to change can derail even the most sophisticated plans. Hence, AI adoption requires significant organizational change, including data infrastructure upgrades, skill development, and the adoption of new decision-making frameworks. If execution falters, AI’s potential remains unrealized, and the strategic plan collapses.

Strategic collapse often stems from cultural resistance rather than technological failure. AI adoption challenges established ways of working, requiring openness to change. Companies with rigid hierarchies or cultures resistant to experimentation struggle to effectively integrate AI.
Additionally, Blockbuster’s failure to embrace digital transformation reflects a broader lesson: no technology, no matter how promising, can succeed without organisational willingness to change. In the AI era, fostering a culture that embraces learning and agility is critical.

AI can help detect early warning signs — such as declining market share, customer dissatisfaction, or operational inefficiencies — but only if organisations actively utilise these insights to inform their decisions. Many firms fail because they ignore or misinterpret such signals. In the AI era, ignoring data-driven insights is like turning off a lighthouse in a storm. Strategic collapse often occurs not because AI fails, but because leaders fail to act on what AI reveals.

The central lesson of strategic collapse in the AI era is that firm plans are not enough. Strategy is no longer a static blueprint; it is a continuous process of adaptation. AI offers unprecedented opportunities, but these must be matched with strategic agility — the ability to pivot quickly in response to changing circumstances. This requires a mindset shift: companies must view strategy not as a fixed path but as a dynamic system that evolves with new data, technologies, and market conditions.

Leadership must embrace flexibility, experimentation and earning.
AI’s rise brings jaw-dropping possibilities and some risks that could cut deep. Strong strategies matter, but they only work when paired with adaptability, cultural readiness, and the nerve to act quickly, such as making the call before the clock runs out. Strategic collapse doesn’t come from evil plans; it happens when execution drags while the environment shifts, like a tide rushing past a stalled boat.

In an AI-powered world, survival hinges on strategic resilience, not just crafting solid plans, but reshaping them on the fly, like adjusting sails when the wind shifts. Strong companies don’t fail for lack of vision—they fall when they misjudge how fast change can hit, like a sudden storm rolling in. In today’s AI-driven world, the most brilliant move is to adapt as quickly as the technology itself—like tweaking your plan the moment a new update is released.

* Susmita Halder, Office of Graduate Studies, North South University, Dhaka