Why Your AI Strategy May Be Failing

Improving AI strategy execution and ROI – How companies can overcome the structural frictions that block AI at scale

AI has entered the enterprise faster than most previous waves of technology, reshaping expectations about speed, productivity, and decision-making. Yet adoption alone does not produce transformation. The Frontier Firm Initiative (FFI), a joint effort between the Digital Data Design Institute at Harvard (D^3) and Microsoft, recently convened senior leaders from a dozen global organizations to address the “last mile” challenge, when a company tries to scale localized, successful AI pilot programs into a standard, enterprise-wide operating model. In the new HBR article “The ‘Last Mile’ Problem Slowing AI Transformation,” Karim R. Lakhani and Jen Stave of D^3 and Microsoft’s Jared Spataro identify a framework of the specific “frictions” stalling progress and outline a strategic blueprint to overcome them. In the insight below, we will zoom in on one friction and one corresponding recommendation from the blueprint to resolve it.

Why This Matters

For today’s business professionals and executives, the “last mile” is less a technical challenge and more a test of leadership imagination. Process debt and clean-sheet redesign are only two parts of a broader diagnosis of seven frictions and corresponding transformation strategies. Read the full article to see them all. The potential of the technology you have already purchased is immense, but realizing it requires the courage to redesign the organization to match the speed of an agentic world.

References

[1] Lakhani, Karim R., Jared Spataro, and Jen Stave, “The ‘Last Mile’ Problem Slowing AI Transformation,” Harvard Business Review, March 9, 2026, https://hbr.org/2026/03/the-last-mile-problem-slowing-ai-transformation.

[2] Lakhani et al., “The ‘Last Mile’ Problem Slowing AI Transformation.”

Link to the D^3 Insight Article
Link to the research paper