You're sitting in another board meeting. Another vendor is pitching their "revolutionary" AI platform. Your competitors just announced their twentieth AI initiative this quarter. LinkedIn is awash with breathless posts about the latest large language model that will "change everything."
Meanwhile, 74% of companies have yet to show tangible value from their use of AI, despite years of investment and endless pilots.
Here's what nobody wants to admit: Most businesses are approaching AI completely backwards.
The Uncomfortable Truth About AI Success
Let me share something that will fundamentally change how you think about artificial intelligence in your business.
The companies that capture the most value from AI follow a simple rule: they put 10% of their resources into algorithms, 20% into technology and 70% into people and processes.
Read that again. Seventy percent into people and processes.
Not into the latest GPT model. Not into hiring more data scientists. Not into building a proprietary AI platform that will somehow magically transform your business.
This is the 10-20-70 Rule and it's the most important framework you've never heard about. Because the only 26% of companies that have developed the necessary capabilities to generate tangible value from AI aren't broadcasting their strategy. They're too busy capturing market share while everyone else chases shiny objects.
Why Everything You Think You Know is Wrong
Here's what most SMB leaders believe about AI:
- Success comes from having the best technology
- You need an army of data scientists
- The algorithm is what creates competitive advantage
- AI implementation is primarily a technical challenge
Here's the reality: Around 70% of AI implementation challenges stem from people and process-related issues, 20% are attributed to technology problems and only 10% involve AI algorithms, despite the latter often consuming a disproportionate amount of organizational time and resources.
You're spending 90% of your time on something that represents 10% of the challenge. No wonder most AI initiatives fail.
The Brutal Math of Misallocation
Let's talk about what this misallocation actually costs you.
AI leaders have achieved 1.5 times higher revenue growth, 1.6 times greater shareholder returns and 1.4 times higher returns on invested capital over the past three years. They're not just marginally better - they're operating in a different league entirely.
Why? Because while you're having philosophical debates about which LLM to use, they're doing something radically different: Leaders focus on the most promising initiatives, and they expect more than twice the ROI in 2024 that other companies do.
The gap isn't in their technology. It's in their focus.
The 70% Where Real Transformation Lives
According to Vinciane Beauchene, Managing Director and Partner at BCG, "The companies that capture the most value from AI follow the 10-20-70 rule. 10% of their AI effort goes to designing algorithms, 20% to building the underlying technologies, and 70% to supporting people and adapting business processes".
But what does that 70% actually mean in practice?
It means your competitive advantage isn't in the AI - it's in how your people use it.
Consider this: 62% of leaders are optimistic about AI while only 42% of frontline employees share that view. That gap? That's where value goes to die.
The most successful companies aren't just implementing AI; they're orchestrating a fundamental transformation in how work gets done. They're:
- Redesigning workflows around AI capabilities, not just adding AI to existing processes
- Creating continuous learning systems because upskilling should go beyond learning how to use the technology and allow employees to adapt in their role as activities and skill requirements evolve
- Building trust systematically since while 68% of leaders feel confident about their organization's responsible use of AI, just 29% of frontline employees believe their companies have implemented adequate measures
The 20% Foundation, Not Feature
The technology component that 20% isn't about having the most advanced AI. It's about having the right foundation.
An organization's enterprise AI foundation is a base that supports the Generative AI activity of the entire organization, not just early adopters or a few product lines. Yet only 10% of global companies have brought one or more GenAI applications to scale and lack of a tech foundation is a primary reason for this limited record of achievement.
This isn't about building a Silicon Valley-style tech stack. It's about creating infrastructure that allows your entire organization to leverage AI effectively. The leaders understand this distinction.
The 10% Necessary but Not Sufficient
Here's the paradox: The algorithm, the thing everyone obsesses over, matters least.
Yes, you need competent AI models. But AI model quality and performance stand out as the top algorithm priority, not algorithmic innovation. The winners aren't trying to out-innovate OpenAI or Google. They're focused on applying proven models to solve real business problems.
Leaders pursue, on average, only about half as many opportunities as their less advanced peers. They're not trying to be AI companies; they're using AI to be better at what they already do.
The Multiplier Effect
When you get the 10-20-70 allocation right, something remarkable happens: the benefits compound.
Future-built companies generate 1.7 times more revenue growth and 1.6 times higher EBIT margins than the lagging majority. But here's the kicker: They plan to spend 26 percent more on IT and dedicate 64 percent more of their IT budget to AI in 2025, resulting in an overall AI investment that is 120 percent higher than their slower competitors.
Success breeds success. The companies that nail the 10-20-70 formula don't just perform better, they accelerate away from the competition.
Your Strategic Imperative
BCG advises following a "10-20-70 rule," where transformation efforts should focus 70 percent on people and processes, 20 percent on technology and only 10 percent on the algorithms themselves.
This isn't a suggestion. It's a strategic imperative.
The window for AI advantage is closing rapidly. As the technology advances and the leaders accelerate, the window for catching up is closing fast. Firms that fail to act decisively now risk being permanently left behind.
The Questions That Matter
Stop asking:
- "What's the latest AI tool we should implement?"
- "How do we build our own LLM?"
- "Which vendor has the best AI platform?"
Start asking:
- "How do we redesign our core processes to leverage AI?"
- "What organizational capabilities do we need to build?"
- "How do we create a culture where AI amplifies human judgment rather than replacing it?"
The Path Forward
The 10-20-70 Rule isn't just a framework, it's a lens for seeing AI clearly.
62% of AI's value lies in core business functions such as operations (23%), sales and marketing (20%), and R&D (13%). This isn't about adding chatbots to your website. It's about reimagining how your business creates value.
For SMB leaders, this is actually good news. You don't need Google's R&D budget or Amazon's engineering team. You need clarity about where value comes from and the discipline to focus on what actually matters.
The companies winning with AI aren't the ones with the best technology. They're the ones who understood, early and deeply, that generative AI is about more than increasing productivity. It can help you reinvent customer experiences, create new services and offerings, and even build new business models.
But only if you get the proportions right.
The Choice
Every day you delay implementing the 10-20-70 Rule, the gap widens. The leaders aren't just ahead, they're accelerating away from you.
But here's the thing about the 10-20-70 Rule: It's available to everyone. It doesn't require massive capital investment. It doesn't require relocating to Silicon Valley. It requires something much harder and much rarer: the discipline to focus on what actually drives value.
The GCC's most innovative organizations recognize that AI success depends on blending technological capability with organizational readiness. By focusing equally on system architecture, data strategy, and human factors like upskilling and cultural adaptation, these companies create a foundation for sustainable competitive advantage.
The algorithm won't save your business. The latest platform won't transform your company. But getting your people and processes right - that changes everything.
The 10-20-70 Rule isn't just a formula. It's a philosophy. It says that in the age of artificial intelligence, the most important intelligence is still human.
The companies that understand this aren't just surviving the AI revolution. They're leading it.
The question isn't whether you'll adopt AI. It's whether you'll adopt it correctly.
Seventy percent correctly, to be precise.
The leaders have already figured this out. They're implementing while others debate. They're transforming while others experiment. They're capturing value while others capture screenshots of the latest AI demo.
The 10-20-70 Rule isn't a secret. It's just that most companies are too distracted by the 10% to notice the 70% that actually matters.
Your move.
Sources
- Boston Consulting Group (BCG). (October 24, 2024). "AI Adoption in 2024: 74% of Companies Struggle to Achieve and Scale Value." BCG Press Release. Retrieved from: https://www.bcg.com/press/24october2024-ai-adoption-in-2024-74-of-companies-struggle-to-achieve-and-scale-value
- Boston Consulting Group (BCG). (September 30, 2025). "AI Leaders Outpace Laggards with Double the Revenue Growth and 40% More Cost Savings." BCG Press Release. Retrieved from: https://www.bcg.com/press/30september2025-ai-leaders-outpace-laggards-revenue-growth-cost-savings
- Boston Consulting Group (BCG). (2025). "The Widening AI Value Gap: Build for the Future 2025." BCG Global Survey Report.
- Moxie Insights. (June 12, 2023). "Follow the 10-20-70 Rule to Safeguard Concerned Employees from AI." Retrieved from: https://moxie-insights.com/people/follow-the-10-20-70-rule-to-safeguard-concerned-employees-from-ai/
- Boston Consulting Group (BCG). (February 4, 2025). "Turning GenAI Magic into Business Impact." Retrieved from: https://www.bcg.com/publications/2023/maximizing-the-potential-of-generative-ai
- Artificial Intelligence News. (October 2025). "The Value Gap from AI Investments is Widening Dangerously Fast." Retrieved from: https://www.artificialintelligence-news.com/news/value-gap-ai-investments-widening-dangerously-fast/
- Arabian Business. (March 19, 2025). "The 10-20-70 Rule Explained: How GCC Businesses Can Turn Massive AI Investments into Long-Term Profit." Retrieved from: https://www.arabianbusiness.com/industries/technology/the-10-20-70-rule-explained-how-gcc-businesses-can-turn-massive-ai-investments-into-long-term-profit
- Boston Consulting Group (BCG). (February 5, 2025). "Laying the Foundation for Gen AI Success." Retrieved from: https://www.bcg.com/publications/2024/laying-tech-foundation-gen-ai-success
- Boston Consulting Group (BCG). (March 28, 2024). "How to Attract, Develop, and Retain AI Talent." Retrieved from: https://www.bcg.com/publications/2023/how-to-attract-develop-retain-ai-talent
- FutureCFO. (June 16, 2023). "Generative AI Training: Have You Come Up with a Plan Yet?" Retrieved from: https://futurecfo.net/generative-ai-training-have-you-come-up-with-a-plan-yet/
