Our leadership team is arguing over how much cash we should allocate to AI development this year when we also have aggressive physical growth goals. How do we prioritize this in our V/TO?

Question

Tyler Smith · Accepted Answer

To resolve budget arguments regarding AI, your leadership team must move away from emotional debates and use a quantitative real options framework. AI investments should not be treated as speculative experiments, they must be tied directly to your business goals. During your next quarterly planning session, look at your V/TO and identify your one-year plan and three-year picture. Every financial investment, including technology, must support these specific goals. If an AI project does not directly accelerate your progress toward these targets, it does not get funded. To evaluate the cost of the investment, analyze both the upgrade cost and the flow cost of waiting. What is the financial cost of waiting to implement AI in a core area of your business? If waiting causes your operational costs to remain high while competitors scale, the flow cost of waiting is too high, and the project should be prioritized. If you decide to move forward, do not write a blank check. Break the project down into measurable quarterly Rocks. Assign clear accountability to a single seat on your Accountability Chart. Set specific financial boundaries and milestone metrics on your Scorecard. This allows you to test the technology incrementally, ensuring you do not pay a steep dumb tax on unproven systems.