Thirty-six percent of companies say AI has already improved their competitive differentiation.

Not efficiency.

Not experimentation.

Differentiation.

That data point comes from McKinsey & Company’s State of AI 2025 report, and it is worth sitting with for a moment.

Most AI conversations still orbit productivity. Faster emails. Quicker research. Fewer manual steps. Useful gains, yes, but largely internal and incremental.

This stat points to something else entirely.

AI is quietly shifting from an internal productivity tool into a market-facing strategy.

Adoption Is Common. Advantage Is Not.

According to the same report, 88 percent of organizations now use AI in at least one business function. AI adoption is no longer rare. It is becoming baseline.

What separates companies is not whether they use AI. It is how they intend to use it.

Organizations reporting the strongest returns from AI are not just reducing costs. They are deliberately using AI to drive growth and innovation. These organizations are also more likely to report stronger customer satisfaction, clearer positioning, and visible competitive differentiation.

The difference is not technology. It is expectation.

When leaders frame AI purely as a way to save time or improve efficiency, the upside is capped. The organisation gets faster, but not meaningfully different.

When AI is framed as a way to rethink how value is created, delivered, and experienced, it begins to shape how the market perceives the organisation.

That is where differentiation starts.

The AI Advantage Framework Lens

This distinction shows up clearly inside Radiant Institute’s AI Advantage Framework.

On one side sit Automation and Acceleration. This is where most AI initiatives begin. Automating repetitive work. Speeding up existing processes. Improving throughput. These are tactical wins, often necessary, and usually quick to demonstrate.

But their impact is typically incremental. They optimise what already exists.

On the other side sit Augmentation and Activation.

Augmentation is where AI enhances human judgment, decision-making, and sense-making. Activation is where those enhanced capabilities shape offerings, customer experience, and how value shows up externally.

This is where AI stops being an internal efficiency lever and starts influencing positioning, trust, and relevance in the market.

Not coincidentally, this is exactly the shift McKinsey’s data appears to be pointing toward.

Why Differentiation Takes Time

Augmentation and activation advantages do not appear overnight. They require changes in how leaders think about work, capability, and value creation.

That is why we treat them as strategic, not tactical.

Automation projects can be scoped, deployed, and measured quickly. Differentiation emerges from sustained intent, reinforced over time through decisions, talent development, and operating models.

When you look at companies pulling ahead, a pattern emerges.

Speed still matters. But direction matters more.

Intent Is the Real Multiplier

The good news is that most organisations are still early in this journey.

Differentiation today is not about being first, nor about having the most advanced tools. Many competitors are using the same platforms, models, and vendors.

The advantage comes from being intentional.

Leaders who are clear about what they want AI to change in how customers experience their business will compound value over time. Leaders who focus only on efficiency gains will plateau quickly, even if they deploy AI everywhere.

The real question is no longer, “Are we using AI?”

It is, “What do we want to be known for because of it?”

AI does not differentiate organisations on its own. Leadership intent does.

At Radiant Institute, this is why our programs focus on helping leaders and teams clarify what AI is meant to change in how value is created and experienced, not just how fast work gets done. A short diagnostic or capability scorecard is often enough to reveal where intent is clear and where it is still fuzzy.