AI: Efficiency and/or Opportunity...
AI technology is evolving very quickly, and not having a strategy on how your business will tackle this exciting frontier is equivalent to my mighty Manly Sea Eagles skipping pre-season training, and kicking off a new NRL season campaign well behind the competition! An AI strategy requires both offensive and defensive approaches similar to a rugby league team, to ensure your business leads its industry segment to a win.
This article will unpack a 360-degree view of the AI strategic framework and the decisions you need to take action on now. We will explore the choices you need to make about your workforce and the type of AI ecosystem your business will require to be feared by the competition and deliver your AI transformation at a premiership-winning standard.
In a recent LinkedIn post, I explored the AI strategy every business will need to decide on: will you choose the path of “More with Less” or “More with More”? In the evolving landscape of business, AI is becoming a pivotal force.
Recently, several companies have made headlines by freezing recruitment and deploying AI across their operations. Shopify CEO Tobi Lütke’s memo emphasised the need for teams to justify why certain jobs can’t be done using AI. As we navigate these changes, I encourage business leaders to think strategically about their AI decisions.
Which path will you take?
‘Efficiency’ AI Strategy
The Efficiency AI Strategy approach focuses on replacing human capital with AI agents, aiming for a “more with less” strategy. The goal is to drive efficiency and reduce costs.
Like every strategic choice a business leader makes, there are trade-offs. The efficiency strategy will deliver productivity through automation and a 24/7 operation with agents that do not require lunch breaks. The workforce you retain will have more time to be strategic and creative. Cost reduction will be realised through lower labour costs and optimisation of resources. The AI workforce outperforms human counterparts in analysing volumes of data, recognising patterns, trends, and errors at lightning speed, providing improved decision-making capabilities.
However, the trade-off of the efficiency path is job displacement, impacting livelihoods and increasing unemployment trends, which will lead to future social problems for governments to solve. Other considerations for an organisation accelerating their productivity AI strategic game plan include the initial investment in a highly geared AI deployment to embed the necessary infrastructure and technology, along with ongoing maintenance, upgrades, and talent requirements to ensure a successful AI strategy.
Consideration should also be given to how far your business is dependent on technology progress. Over-reliance could deplete human critical thinking capabilities and heighten vulnerability to cyber-attacks, potentially paralysing operations. The Efficiency AI Strategy offers significant benefits in terms of productivity and cost savings but also presents challenges related to job displacement, ethical concerns, and high implementation costs.
‘Opportunity’ AI Strategy
The Opportunity AI Strategy alternative maintains headcount while integrating AI to deliver “more with more.” Here, AI and human talent work side by side, unlocking growth and increasing productivity. The current workforce leverages technology to scale and innovate. Enhanced productivity through the collaboration of workers and AI can deliver significant impact and growth, with AI supporting human capital. The workforce benefits from outsourcing mundane repetitive tasks, providing greater work satisfaction through a focus on strategy and creativity.
The united workforce provides untapped new capabilities to innovate and drive growth. The new hybrid workforce model can create an ecosystem that promotes innovation, delivering exciting new products and services, and providing a competitive advantage to businesses that opt for the “more with more” strategy.
Retaining and reskilling employees removes the productivity dip driven by disengagement that occurs through large redundancies and job displacement. A stable workforce of empowered and engaged employees is a multiplier for momentum, as humans complement AI each to execute strategic goals. Add to this valuable insights from the AI data-rich world, decision-makers can leverage data to improve and shape strategy, and build a more resilient, risk-aware business.
However, the change agenda and decision to retain a human workforce alongside a growing AI workforce also presents challenges. The change agenda is a complex implementation process, requiring navigation of process changes and reskilling requirements, which can be costly and take time to realise the desired benefits.
Retaining the existing workforce and adding IT costs is expensive through capital expenditure, training of humans is costly, and so is the maintenance and ongoing upgrades of AI agents. Change can be difficult for some employees, even with a transparent no-job-displacement strategy; some will remain sceptical and resist smooth integration of AI into the business.
Due to the foundational bias and learning of AI models a business adopts, they are prone to unpredictable outcomes, leading to inaccuracies and unintended consequences. While the Opportunity AI Strategy offers significant benefits, it also presents challenges related to coordination, resistance to change, risks, and unpredictable outcomes.
We are operating in exciting times, and the opportunity to choose the right AI strategy is crucial. Businesses must carefully consider these factors to make informed decisions about integrating AI into their operations. Whether you opt for the Efficiency AI Strategy or the Opportunity AI Strategy, the key is to align your approach with your business goals and workforce needs. The strategic choices you make today will shape the future of your organisation and its competitive standing in the industry.
Post by General Manager Tony Jensen. For more first-hand insights like this, follow Tony on LinkedIn.