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AI Can’t Save Bad Strategy: Why Fundamentals Still Matter in 2025 (Thinks Out Loud Episode 455)

Team collaborating at computer to illustrate the idea that AI can't save bad strategy.

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If there’s one thing I hate to see, it’s marketers, e-commerce, and customer acquisition folks who talk about AI as if it’s going to solve every problem their business has. Yes, AI can be an incredibly valuable tool. But it’s only a tool. The fact is that AI can’t save your business from bad strategy. Only you can.

Thinking about AI as a “magic bullet” is a big reason why so many businesses still aren’t seeing the returns they’d hoped for from their AI efforts. Instead, the businesses succeeding with AI in marketing and customer acquisition are those that have figured out their core strategies first, then examined how they can use AI to execute against those strategies faster, easier, or more cheaply.

How can you do that? How can you avoid the “bad strategy” gap for your business? And how can you make AI work for you to gain more customers and drive more revenue? That’s what this episode of Thinks Out Loud is all about.

Want to learn more? Here are the show notes for you.

AI Can’t Save Bad Strategy: Why Fundamentals Still Matter in 2025 (Thinks Out Loud Episode 455) — Headlines and Show Notes

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You might also enjoy this webinar I recently participated in with Miles Partnership that looked at "The Power of Generative AI and ChatGPT: What It Means for Tourism & Hospitality" here:

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Transcript: AI Can’t Save Bad Strategy: Why Fundamentals Still Matter in 2025

Welcome back to Thinks Out Loud. I’m Tim Peter.

Anyone who listens to this show a bunch knows that I’m fairly bullish on AI. I think it’s an incredibly useful tool. Research from McKinsey shows that marketing and sales teams are the ones most likely to use AI across a wide array of industries.

We see this again and again and again. Sales and marketing teams are the folks who put AI to work. And yet… we haven’t seen a lot of evidence of huge lifts in business from AI yet for all that many companies.

Sure, there are a few case studies that get cited a lot. And I’m happy to report that clients of mine are absolutely seeing benefits of using AI. But where’s the big lift overall?

Remember, I’m bullish. I think that lift is coming. I see evidence of it with people I work with.

The challenge for many companies, isn’t in whether or not you’re using AI. It’s whether you’re thinking strategically about AI and where you should be using it. I still hear a significant number of people say, “Well, we’re playing with AI to see what it can do.”

I’m sorry, playing with AI? Isn’t it time to ask AI to go to work? Isn’t it time to think about how AI supports your strategy?

The truth is, AI can’t save you from a bad strategy. Only you can.

This is Thinks Out Loud, episode 455. Today we’re taking a look at why AI won’t save you from a bad strategy. Let’s dive in.

Okay, we all know that AI has made content creation faster and cheaper and easier. Marketers are using it to do that kind of thing all over the place. But creating more content, creating cheaper content, creating content more easily — as much as content marketing matters for your business — is not the same as customer acquisition.

AI is great at doing those things. What AI can’t do is the strategic heavy lifting for your business:

  • It can’t define your value proposition.
  • It can’t identify core insights about your customers.
  • It can’t set priorities based on your long-term business goals.

Yes, it can help you better understand any of those. It can help you do any of those, again, faster or cheaper or more easily. It’s a great brainstorming tool. At the same time, you have to supply the judgment of what makes the most sense for your business.

Let me give you an example of what I mean about judgment from an era long before AI. And it starts with my favorite dumb business quote of all time. I mean, this is just pricelessly dumb. As the story goes, Gil Amelio, who was the CEO of Apple prior to Steve Jobs’ return to the company, supposedly once said to Jobs that:

Apple is like a ship with a hole in the bottom leaking water. And my job is to get the ship pointed in the right direction. what?

Dude, if you’ve got a ship with a hole in the bottom. Your job is to stop the water from coming in. Your job is to keep the ship from sinking.

In that situation, worrying about which direction the ship is pointing guarantees that the only direction it’s going is straight down. Believe me, I’ve seen Titanic like 10 times. I’m pretty sure that makes me an expert on sinking ships. This is not what you’ve got to do, right?

At any rate, regardless of my nautical knowledge, Amelio’s quote there is obviously an objectively awful metaphor and it’s even worse judgment.

But we often think about AI in similar ways when in truth AI is a tool. Strategy provides the map and without the map the tool isn’t going to do you any good.

Anyone, anyone who’s listened to the show for any amount of time knows that I’m a huge fan of thinking about not only what will change in the future, but what won’t change. And no matter how much AI shifts our daily practices over time, there are so many key areas about our strategy that simply will never change, no matter what happens with AI:

  • You still need to understand your audience. That is something that simply will never change.
  • You still need to solve real customer problems.
  • And you still need to build trust and relationships with your customers.

There are loads of great AI tools that can help you parse your data to better understand your audience. And you might already own and use some of these tools. Tools like Salesforce and HubSpot have AI capabilities built in. There are also tools that can help you solve real customer problems. You can use ChatGPT or Perplexity or Gemini or custom-built models to brainstorm solutions for how to solve those problems. And you can absolutely use tools like Copy.ai or Jasper or Gpng or any number of chatbots to either create more content or engage your customers or improve your sales teams to try to build more trust and build better relationships with your customers.

As you know, there are also plenty of great tools out there that don’t use AI that can also help you do these things as well. It’s not like we’re going to turn our business over to the tool, because the point is that it’s not about the tool. It’s about thinking deeply about your customers’ needs and then focusing relentlessly on how you build better trust and better relationships with your customers.

Ultimately, our jobs in marketing and customer acquisition are to build those relationships. You’ve probably heard a quote, it’s typically misattributed to P.T. Barnum, that says, “nobody ever went broke underestimating the intelligence of the American people.” And you can broaden that to the globe, it doesn’t matter.

I hate that quote for two reasons.

First, though less importantly, it’s actually American journalist and noted cynic H.L. Mencken who was the original source of the quote. Though, if we’re being fair, plenty of business folks have absolutely adopted and endorsed that quote over the century plus that it’s been in circulation. So fine, whatever.

The second thing, and far more importantly, is it is deeply, deeply wrong to think that way.

I believe, as sure as I believe anything, that you will never go broke treating your customers well, treating them with respect and dignity, treating them as human beings. Especially in an age of AI, I believe that your customers and the market as a whole are increasingly looking for businesses that are actually, authentically human, that actually treat them like they matter.

Sure, tools have their place. You should use them. But you’ve got to make sure you’ve got your hands — and more importantly your brains — on the controls while you’re using them.

You know, one place I see people turn over control to tools all too often is in scaling too soon. And yes, for some companies, you’ve got to worry about scale. I used to work for one of the largest hotel companies in the world. Scale mattered. We had to think about it a lot. But using AI to scale the wrong things isn’t going to help your business at all.

Instead, think about whether you actually have an execution problem, which scale would help with, or if you’ve got a strategy gap.

And some ways you can tell whether your strategy is off is some of the ways are

  1. Your content drives traffic but conversions are flat, whether that content is created by AI or created by people
  2. You’re producing more but you’re not reaching your audience.
  3. Another is that your marketing and your sales efforts are out of sync.
  4. Another is that you’re measuring clicks, you’re measuring traffic but not conversions or deals.
  5. And the last is that your teams are busy, but that they’re not aligned. They’re not moving in the same direction.

All of these are symptoms that you have a strategy gap, not an AI problem. All of those are signs that you’re working on the wrong things. And if you’re working on the wrong things, AI simply isn’t going to help you.

If you’ve got a gap in your strategy, ask yourself these questions:

  • First, who are we trying to acquire? Who’s the actual customer?
  • The second is, what problem are we solving for them?
  • The third is, where do they go to learn, decide, and buy?
  • And the fourth is, why should they choose us?

Those are the questions that actually matter.

Then, take the time to revisit your messaging. Look at your customer journeys, look at how people use your website, look at how people use your app, look at how they interact with your sales teams. And then, take a look at your measurement framework. Are you measuring the right things that actually point you in the right direction?

And again, once you have those, then you can — and should! — ask, “How can AI help us execute faster, smarter, or better?”

You can use AI to help you answer those questions. Ultimately, though, it’s your judgment that will decide whether those answers make sense for your business.

Again, AI has made content creation faster, cheaper, and easier. It’s made marketing faster, cheaper, and easier. But faster, cheaper, and easier alone is not going to drive customer acquisition for your business.

Also remember that AI cannot do your strategic heavy lifting. It can’t define your value proposition. It can’t identify core insights about your customers. It cannot set the priorities you need to set based on your long-term business goals. Sure, it can help you better understand those.

Ultimately though, you have to supply the judgment of what makes the most sense for your business. And it’s only once you understand where it is you’re trying to go, who it is you’re trying to help, and how it is that you can best help them that you should ask the question, how can AI help us execute faster, smarter, or better?

AI is a useful tool, but AI will not save you from a bad strategy. Focus on your strategy, and then your tools will help you build even greater success for your business. I can’t wait to see what you do.

Show Wrap-Up and Credits

Now, looking at the clock on the wall, we are out of time for this week.

I’m willing to bet, I’m pretty confident that you might know someone who would benefit from what we’ve talked about today. Are you thinking of someone? Why not send them a link to the show? Let them know what you think too.

You can also find the show notes for this episode, episode 455, and an archive of all our past episodes, by going to timpeter.com/podcast. Again, that’s timpeter.com/podcast.

And, of course, be sure to like and subscribe wherever you get your favorite podcasts. I very much appreciate that.

With all that said, I wanted to say thank you so much for listening. This show would not happen without you. We’ll be back with a new episode next week, but I just so much appreciate you tuning in. So until then, please be well, be safe, and as the saying goes, be excellent to each other. We’ll see you soon.

Tim Peter is the founder and president of Tim Peter & Associates. You can learn more about our company's strategy and digital marketing consulting services here or about Tim here.

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