The AI Marshmallow Test: Resisting Short-Term Temptation for Long-Term Gains

As generative AI starts delivering tangible ROI, an interesting tension is emerging between business leaders and CFOs. Leaders want to reinvest those gains to double down on their AI transformation journeys. But CFOs, enticed by the early wins, are pushing to reduce budgets and harvest the low-hanging fruit.

This tension is understandable but risky. If CFOs "win" this battle, companies could very well lose the AI war. Leaders may start understating or obscuring ROI metrics to protect their AI initiatives from budget cuts. I'm already hearing rumblings of this happening at some organizations.

We need to bring CFOs into the AI fold as partners, not adversaries. They need to understand that this is just the beginning of the AI journey - the potential long-term gains dwarf what we're seeing now. Cutting investment at this stage is akin to eating the marshmallow in the famous Stanford experiment instead of holding out for the bigger prize.

CFOs need to resist the short-term temptation and join leaders in reinvesting the early AI returns. This is an inflection point for many companies, a brief window to double down on AI before competitors do. The ones that pass the "AI Marshmallow Test" by staying focused on the long game will be the ones that win big.

As I meet with executives, I'm advising them to align incentives across functions on this issue. AI transformations require company-wide commitment and patience to fully materialize the exponential opportunities. Let's learn from the Stanford kids and delay gratification for a bigger payoff down the line!

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