Artificial Intelligence (AI) is changing the availability and affordability of expertise, impacting the competitive landscape for both industry leaders and emerging companies. In their Harvard Business Review article, “Strategy in an Era of Abundant Expertise”, Bobby Yerramilli-Rao, Chief Strategy Officer at Microsoft, John Corwin, General Manager for Corporate Strategy and Development at Microsoft, Yang Li, Director of Corporate Strategy at Microsoft, and Karim R. Lakhani, Dorothy & Michael Hintze Professor of Business Administration at the Harvard Business School and co-founder and chair of The Digital, Data, and Design (D^3) Institute at Harvard, argue that businesses must strategically leverage AI to enhance their own core expertise and outsource non-core functions to thrive in an era of abundant expertise.
Key Insight: The Two Forces
“[T]he interplay between these two factors—the increasing amount of expertise required to create value and the decreasing cost of accessing that expertise—shapes companies and affects the scope of their operations” [1]
The research team suggests that businesses face two transformative forces today. Global expertise is constantly growing; for example, in the field of biotech, over 45,000 academic biology papers reference AI today and, with the rate of discovery, firms can no longer keep up with advances. At the same time, falling costs of expertise access, for example, as enabled in the media landscape by creator tools like Instagram and TikTok, have lowered barriers for new entrants, intensifying competition.
This isn’t new; since the 1980s, technological innovations have increasingly allowed for the outsourcings of operations, to the point that today a mid-sized direct-to-consumer retailer can compete with bigger firms because it can rely on external tools for many operational functions while focusing internally on driving competitive differentiation. The researchers argue, however, that with the advent of AI the narrowing of in-house expertise is accelerating.
Key Insight: The Triple Product – AI’s Potential for Transformation
“Companies that take advantage of AI will benefit from what we call the triple product: more-efficient operations, more-productive workforces, and growth with a sharper vision” [2]
Utilizing AI, businesses can transform their processes and improve efficiency. For instance, Moderna has transformed its operations through the use of AI by creating over 900 specialized AI assistants that enable the workforce to complete weeks’ worth of tasks in minutes.
AI tools can also be leveraged to improve efficiency, as shown in a randomized controlled trial, run by the consulting firm BCG and D^3, in which AI-augmented consultants completed 12% more tasks on average, and did so 25% faster.
AI, finally, can enable companies to deploy resources differently, focusing in-house processes on their unique capabilities. An example is the company FocusFuel, which set up its entire production—from ideation to marketing, manufacturing, and distribution—in just months by leveraging AI-enabled platforms, while their team has concentrated on building relationships and growing a customer base.
Key Insight: How to Get Started
“Clearly the companies that are best at continually increasing their triple-product return will have the greatest chance of competitive success. But getting there is hard.” [3]
There are several steps leaders can take to leverage AI in this new landscape. First, the research teams suggests starting small by choosing a few processes to transform. Second, companies must ensure they have clearly stated safety and governance guidelines to safeguard their AI efforts from bias, misinformation, and cyber attacks. Third, leadership must focus on change management to ensure the entire workforce gets onboard and learns to use the AI tools. Finally, companies must be willing to allocate the necessary budgets to their transformation; if implemented correctly, their investment will pay off in returns.
Key Insight: Reevaluating Strategy in the AI Era
“We believe that every company will need to reevaluate its strategy in this changing era and will have to ask itself three questions.” [4]
A company should ask itself which problems it currently solves that customers will use AI to solve in the future. For example, in the travel industry, as AI enables customers to plan tailored itineraries, travel agents, to stay relevant, will need to organize experiences that require a human touch.
Specialists should consider, in their field, which types of expertise will need to evolve most. In medicine, as AI excels at diagnostic imaging, doctors can differentiate themselves by emphasizing human-centric skills, such as empathy and caregiving.
Leaders should ask what assets their company can use to enhance its ability to stay competitive. The article names brands, customer relations, and network effects as examples of expertise areas that AI is unlikely to disrupt. So, a consumer-product design company may pivot to focus on customer relations and understanding the customer vision as AI takes over design tasks.
Why This Matters
CEOs should act now to leverage AI to streamline functions that are not core to their businesses, enabling their organizations to focus on unique areas of expertise. Executives can begin by reflecting on their company’s unique strengths and identifying the core competencies that set them apart. By reallocating resources to refine these competencies and leveraging AI to streamline non-core tasks, leaders can gain a competitive edge. The research teams suggests that embracing AI and evolving with it will be necessary to survival in the new business landscape.
References
[1] Bobby Yerramilli-Rao, John Corwin, Yang Li, and Karim R. Lakhani, “Strategy in an Era of Abundant Expertise”, Harvard Business Review (November 20, 2024): hbr.org/2025/03/strategy-in-an-era-of-abundant-expertise.
[2] Yerramilli-Rao et al., “Strategy in an Era of Abundant Expertise”, hbr.org/2025/03/strategy-in-an-era-of-abundant-expertise.
[3] Yerramilli-Rao et al., “Strategy in an Era of Abundant Expertise”, hbr.org/2025/03/strategy-in-an-era-of-abundant-expertise.
[4] Yerramilli-Rao et al., “Strategy in an Era of Abundant Expertise”, hbr.org/2025/03/strategy-in-an-era-of-abundant-expertise.
Meet the Authors
Bobby Yerramilli-Rao is the Chief Strategy Officer at Microsoft, joining the company effective January 2020. He was also elected as a board member of GlobalFoundries in 2022, and serves as the Chair of Strategy and Investment Committee. He holds a Doctorate in Robotics (Electrical Engineering) from the University of Oxford.
John Corwin is the General Manager for Corporate Strategy and Development at Microsoft. His background is in SaaS growth strategy, monetization strategy, sales strategy, and operations in B2B environments. Prior to his time at Microsoft, Corwin worked as the Head of Principle Strategy at LinkedIn.
Yang Li is the Director of Corporate Strategy at Microsoft. Prior to her time at Microsoft, Li worked as a consultant at Houlihan Lokey as well as a Business Analyst at McKinsey & Company.
Karim R. Lakhani is the Dorothy & Michael Hintze Professor of Business Administration at the Harvard Business School. His innovation-related research is centered around his role as the founder and co-director of the Laboratory for Innovation Science at Harvard and as the principal investigator of the NASA Tournament Laboratory. He is also the co-founder and chair of the The Digital, Data, and Design (D^3) Institute at Harvard and the co-founder and co-chair of the Harvard Business Analytics Program, a university-wide online program transforming mid-career executives into data-savvy leaders.