CEOs risk obsolescence by treating AI as efficiency tool instead of business reshaper

Fortune contributor Mike Hoffman argues that CEOs are misreading AI’s transformative potential by treating it as an efficiency tool rather than a fundamental business reshaper. His analysis draws parallels to how Blockbuster missed streaming’s disruptive power while focusing on optimizing store operations, warning that companies risk obsolescence if they fail to recognize AI as a signal detector that can identify problems humans can’t see.

The big picture: More than half of the Fortune 500 companies from 2000 no longer exist, with most failing not from lack of vision but from solving the wrong problems while missing critical market signals.

Why current AI strategies are flawed: Most companies are using AI to optimize existing processes rather than questioning whether those processes should exist at all.

• Hoffman compares this to “lumberjacks tying chainsaws to the end of manual axes”—productivity would plummet instead of modernize.
• Call centers in the 1990s focused on better call monitoring instead of asking why customers were calling in the first place.
• “AI will do an amazing job of accelerating bad processes and amplifying the incompetencies of employees if not deployed thoughtfully.”

The consulting industry blind spot: Companies spend billions on “AI for AI’s sake” while missing growth opportunities.

• Most consulting projects still “aim at the wrong problem from day one,” focusing on automation and dashboards rather than reshaping growth capabilities.
• AI can already analyze how companies find, win, and keep customers, flagging performance breakdowns and suggesting pivots before competitors catch on.
• Yet most CEO conversations still revolve around workforce reduction, missing the bigger strategic picture.

What AI can actually do: The technology excels at cognitive tasks where humans struggle, from data analysis to pattern detection to diagnosing unseen problems.

• “AI can already outperform humans at a vast number of cognitive tasks.”
• “We are drowning in data, while AI was born to swim in it.”
• The technology thrives at “sifting through complexity, separating signal from noise, and pointing to the problems we didn’t even know we should be solving.”

The speed of disruption: Historical precedents show transformation accelerates rapidly, and AI adoption will be even faster.

• Netflix launched streaming in 2007; by 2010, Blockbuster was gone.
• The Wright Brothers’ first flight to the Moon landing took 60 years; Apple’s “1984” ad to global e-commerce took barely a decade.

What leaders should do: Hoffman emphasizes that only CEOs building with AI at the core of their business will thrive, not those treating it as a “bolt-on efficiency tool.”

• “AI isn’t a shiny tool—it’s a signal detector in a world where signal blindness kills companies.”
• Success requires rethinking team composition, urgency levels, and fundamental business approaches.