Commentary by Edward Segal, a crisis management expert and author of Crisis Ahead: 101 Ways to Prepare for and Bounce Back from Disasters, Scandals, and Other Emergencies.

Companies and organizations are facing major obstacles in taking full advantage of AI, according to the results of new research.

There are several reasons for those challenges, according to a report released today by Capital One, which also found that a majority of executives are unrealistically confident in how ready their organizations are to use AI.

Reality Check

"Confidence in AI is soaring, but cracks are showing in the foundation," according to Capital One. The company's survey of 4,000 business and data leaders found that:

• 87% were confident in their company's AI capabilities, but only 35% of tech practitioners said their organizations had the necessary skills and expertise to implement complex AI projects.
• 70% of the tech staffs said they spend up to four hours everyday fixing data and other issues.
• Only 35% of respondents said their organizations have a strong data culture, citing inconsistent support and education.

The study was conducted on behalf of Capital One by Morning Consult. The survey took place July 19-30, 2024 and has a margin of error of +/- 2%.

Increased Urgency

Many top executives apparently feel pressure to harness and utilize the full powers of AI, according to Cisco's second annual AI readiness report that was released this week.It found that 98% of surveyed executives felt an increased urgency to deliver on AI and 85% thought they have less than 18 months to act.

AI is also forcing executives to rethink some of their tech-related assumptions and priorities.

"Eventually there will be only two kinds of companies: those that are AI companies, and those that are irrelevant. AI is making us rethink power requirements, compute needs, high-performance connectivity inside and between data centers, data requirements, security and more," Jeetu Patel, Cisco's chief product officer, predicted in a press release.

Trapped In Pilot Purgatory

"Companies are struggling mightily with AI implementation, creating frustration and waste across organizations. Despite massive investments, many firms find themselves trapped in 'pilot purgatory'—unable to scale promising experiments into production," DeborahPerry Piscione, author of Employment Is Dead: How Disruptive Technologies Are Revolutionizing the Way We Work, observed via an email interview.

Another obstacle is that many employees don't have the necessary skill set to utilize the technology.

"The stark reality is that most employees lack the technical skills to effectively use AI tools, while leadership teams often push ahead without clear strategic direction. This has created a dangerous disconnect where expensive AI systems gather dust or, worse, generate unreliable outputs that erode trust," Piscione pointed out.

Leadership Issues

"The biggest challenge I see with AI implementation isn't technical—it's that leadership often gets caught up in the 'wow factor' without understanding the practical limitations," Vincent Schmalbach, a freelance software engineer and AI consultant, commented in an email interview

Some CEOs may not understand what's needed to help ensure the successful implementation of AI.

"When I help companies implement AI solutions, I frequently encounter CEOs excited about how AI can write code, thinking they can reduce their development team. But they're missing that software development is 90% about understanding requirements, creating mental models, communicating with stakeholders, and deep problem-solving. The actual code writing is just the tip of the iceberg," Schmalbach explained.

'Throwing Money At AI'

"Right now, traditional companies are desperately throwing money at AI without understanding a fundamental truth: the employer-employee model itself is breaking down. Their struggles with AI adoption expose the deeper dysfunction of corporate hierarchies and full-time employment. While companies waste millions trying to force AI into outdated organizational structures, independent professionals and freelancers are nimbly incorporating AI tools into their work," Piscione, the author of Employment Is Dead, concluded.

'Fear Of Job Displacement'

"Beyond data, there's a critical human element: the fear of job displacement can create resistance among teams, while a lack of comprehensive training leaves staff unable to fully utilize AI tools, Anbang Xu, the founder of JoggAI, and a former senior product manager at Apple, commented via email.

Taking full advantage of everything that AI has to offer will take effort, money, and time.

"Successful AI integration requires a dual investment. First, in building a robust data infrastructure that supports scalable insights, and second, in fostering a workplace culture of collaboration and continuous upskilling. Without these foundational steps, AI becomes a misunderstood tool rather than a transformative asset, stalling its adoption and impact," Xu concluded.

Given the fact that AI continues to rapidly evolve, the sooner that business leaders take steps to address the obstacles in using AI, the better.

Otherwise, their companies will fall further behind with every passing day, creating an internal crisis that could be difficult to overcome. And they will run the risk of putting themselves at a disadvantage against competitors who can take full advantage of everything that AI has to offer today—and tomorrow.

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