How To Start Your Frontier Transformation: 3 Strategies To Start With People

AI is no longer experimental—it’s reshaping margins, reducing cycle times, and accelerating revenue growth for companies that move decisively. Frontier Firms are already capturing these gains, leaving slow adopters behind. According to a recent study from IDC, Frontier organizations see three times higher ROI from AI than slow adopters. Another differentiator emerged from our own research: 71% of employees at Frontier Firms say their company is thriving, compared with just 39% globally.

Frontier leaders aren’t simply bolting new technology onto their existing operations. As Microsoft Chief Executive Officer of Commercial Business Judson Althoff has shared in recent articles and keynotes, these leaders are taking a human-centered approach to AI transformation. The people closest to the work understand the real bottlenecks and opportunities. By equipping them with AI, leaders unlock practical solutions that drive measurable performance gains.

3 essentials for building a Frontier organization

Here’s Althoff’s outline for a Frontier approach to using AI and agents that puts capability directly into each employee’s hands.

1. Start with your employees to amplify ambition

At the heart of every Frontier business flow is the notion of democratizing intelligence. Human ambition is at the core, coupled with your AI assistants and agents to get real work done.

—Judson Althoff, Chief Executive Officer of Commercial Business, Microsoft

The idea: The point isn’t to simply deploy more technology, but to deploy it in ways that unlock more potential in people to solve their hardest problems and create more business impact. 

Why it matters: According to IDC,¹ AI adoption is accelerating past the initial experimentation phase, with 68% of companies using AI and 37% using agents. However, providing access to the technology is not the same as providing the guidance and skilling needed to unlock its potential. 

The shift: Frontier leaders focus on applying agents where they matter most—the priority workflows that define performance and growth. AI is at its most powerful when employees have the space and the guidance they need to imagine, experiment, and pursue bolder ideas. 

The big picture: Frontier leaders don’t start with AI capabilities. They start with human ambition, then design the systems, workflows, and guardrails that allow that ambition to scale responsibly. This requires treating AI adoption as a management system—not an IT rollout—with executives and business decision-makers actively redesigning workflows end-to-end.

2. Expand across every business function

There’s a maker in every one of us, and the Frontier Firm has a maker in every room of the house.

—Judson Althoff, Chief Executive Officer of Commercial Business, Microsoft

The idea: The people closest to the challenge are often closest to the opportunity. As AI becomes more accessible, creativity moves from the edges of the organization to the center so that everyone is empowered to innovate.

A striking data point: Frontier Firms aren’t leaving AI adoption to the IT department—they are making it a company-wide leadership priority. According to IDC research, Frontier Firms are using the technology across seven business functions on average.

Real-world innovations: Mercedes-Benz scaled AI innovation across its global production network, diagnosing efficiency declines and reducing energy consumption of buildings and machines—including 20% energy savings in one paint shop. And Althoff highlights how Toyota is pioneering AI intelligence in manufacturing with the O-beya system, a multi-agent AI system that simulates expert discussions virtually. O-beya can auto-select AI agents in fields like fuel efficiency, along with drivability, noise and vibration, energy management, and power management to pinpoint causes and suggest solutions. 

The takeaway: Broadening access to agents can unleash innovation. Frontier leaders don’t need to script how employees should use the technology—they just need to ensure that there are proper guardrails around a wide space for experimentation.

3. Trust, governance, and integration determine ROI

The idea: AI can create more value when people trust it enough to use it. Trust is what allows AI-powered innovation to scale beyond isolated pilots. And that requires human oversight with “observability at every layer of the stack,” according to Althoff. 

The challenge: Not every organization has put the right safeguards in place yet. Microsoft’s 2026 Data Security Index reports that only 47% of companies have fully implemented data security controls for AI.   

The solution: Frontier leaders must ensure security and be explicit about human-in-the-loop observability as a cornerstone of transformation. People adopt AI confidently when they understand how decisions are made, how data flows, and how systems behave—and when to intervene as needed. Finally, Frontier organizations don’t implement new technology and then slow down—or backtrack—to implement responsible practices. They design for trust from the start so they can keep moving quickly. 

Actions you can take to drive measurable impact

The idea: The organizations that will win in the Frontier era are those that view AI not as a one-off tool rollout but as a leadership discipline. They start by clarifying ambition, giving people the space and agency to act, and building trust early so transformation can scale across the business. Importantly, they use AI themselves to guide decisions, surface insights, and stress test ideas about keeping humans at the center of their business transformation. 

Where to start: Microsoft’s new Prompt Guide for Business Leaders was designed to help leaders get a handle on the changing AI landscape and use the technology itself to stress test their ideas and strategies in response to it. The guide offers guidance on how to:  

1. Assess readiness
2. Identify value 
3. Map workflows 
4. Build roadmap 
5. Plan for risk 
6. Define actionable next steps

Example prompt: “Show me the top three workflows where agents could reduce cycle time by at least 20% based on our current operations.”

From vision to value in the Frontier era

The guide demonstrates how AI can be a thinking partner, and helps leaders develop a strategy to help their people harness the technology to achieve goals, innovate, and unlock more value.

¹ IDC InfoBrief: sponsored by Microsoft, What Every Company Can Learn From Frontier Firms Leading the AI Revolution, IDC # US53838325, November 2025.

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