2025: The Year of the AI Squad—Why Corporates Must Act Now

"In the next two years, every enterprise in every industry will reinvent every workflow around every persona or job in a company. So the people that are deniers on AI: They’re going to lose big.”

In late October 2024, ServiceNow CEO Bill McDermott opened a CNBC interview with a striking call to action: a challenge for companies to embrace AI integration in their workflows to enhance or even automate business processes. If we take McDermott’s words at face value, the state of AI adoption in German industry appears troubling. According to the ifo Institute, Germany ranks 7th in Europe for AI usage in businesses, with only one-third of large corporations reporting AI adoption. The situation is even bleaker among SMEs, where just 10% have implemented AI solutions—an alarming figure in an era marked by volatility, uncertainty and growing competition from abroad.

Only 6% of German companies are "pacesetters" in AI readiness, far below the global average of 13% (Cisco Readiness Index).

As we enter 2025, SMEs must recognize that adopting AI is not just another task on the to-do list but an existential imperative for the future of their operations. This year represents a pivotal moment—a decisive fork in the road that will rapidly distinguish industry leaders from those left trailing behind.

What are AI squads?

AI squads are dedicated internal teams focused on advancing a company's AI transformation and empowering its workforce. These teams focus on strategic objectives aligned with the company’s goals and level of ambition. By operating under a clear and focused mandate, AI squads can dedicate their efforts to this mission without being encumbered by daily operational responsibilities. Their work typically includes advancing employee AI literacy, identifying and prioritizing high-value AI use cases, and developing advanced AI capabilities across business units. This structured approach ensures a cohesive and impactful implementation of AI initiatives throughout the organization.

How should AI squads operate and how can they be successful?

A company-wide executive mandate is a critical factor for the success of any AI squad. To maximize impact and ensure credibility, the squad should report directly to the Chief Executive Officer (CEO) or Chief Digital Officer (CDO). This alignment emphasizes the strategic importance of AI transformation and signals its priority to the entire organization. Direct sponsorship and a clear reporting structure to the executive board are vital for establishing the squad’s authority, legitimacy, and ability to drive meaningful change.

Credibility is essential for securing employee support and engagement. Contrary to common misconceptions, most employees view AI squads not as a threat but as an opportunity. Many are inherently curious about technology and value their company’s proactive approach to embracing innovation and staying competitive. By positioning the AI squad as the trusted resource for all AI-related questions and ideas, organizations can inspire a renewed spirit of innovation and foster greater collaboration across teams, creating a culture of shared progress and forward-thinking.

Although an AI squad may attract considerable attention early on, its long-term success depends on measurable outcomes. AI transformation is not a quick initiative but a sustained effort that typically unfolds over several years, often at least three. Regularly tracking and evaluating the squad's progress is essential to ensure its efforts remain aligned with organizational goals. Transparent reporting not only highlights the squad’s contributions but also reinforces its relevance, even during periods of uncertainty or shifting priorities.

A third critical success factor is a dedicated and secure budget that aligns with the company’s current stage of AI transformation. As AI integration becomes a vital competitive differentiator, supporting the transformation with adequate resources is strategically imperative. A protected budget safeguards the AI squad from internal politics and fluctuations in organizational performance, allowing it to maintain focus on its mission and drive meaningful progress without unnecessary distractions.

What impact can be expected from an AI squad?

The overarching benefits of establishing an AI squad which operates under the above outlined success factors are diverse. To name a few:

Enhanced AI fluency: Employees gain the essential skills to work confidently and effectively with AI tools, facilitating seamless integration into their daily workflows. High levels of acceptance and accurate application of these tools are crucial for the organization to fully realize the potential benefits of AI.

Enhanced Innovation: Deloitte reports that German companies identify finding valuable AI use cases as the second most significant challenge in AI transformation. By prioritizing use case identification, an AI squad is driven to develop a scalable methodology tailored to the company's unique business processes. Additionally, as employees increasingly engage with AI and contribute ideas for its application, the organization fosters a culture of innovation, unlocking new opportunities and driving continuous improvement.

Return on Investment: By systematically identifying AI opportunities across the organization’s business processes and leveraging the squad’s growing expertise in implementing effective solutions, companies can achieve substantial efficiency improvements. These advancements translate into measurable gains in workforce productivity and a strong return on investment, reinforcing the value of AI transformation efforts.

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