The weekly download: No 34

Contrasting the view of AI thought leaders with some real practical ideas for your business. AI is a normal technology. People will drive AI change. Focus on value creation through the uncertainty...

Let’s start with two prominent commentaries on the current state of AI.

State of AI in the Enterprise

First a report from Deloitte on how AI looks for their client base. A quick reminder here. Deloitte and their competitors have a clear vested interest when writing these reports. They need to serve two purposes: Address C Suite leaders - buyers of their services; and offend no individual business or segment.

This shines through in the report. On the encouraging side:

“One-third (34%) of surveyed organizations are starting to use AI to deeply transform—creating new products and services or reinventing core processes or business models. Another third (30%) are redesigning key processes around AI. The remaining third (37%) are using AI at a more surface level”

The report goes on to what is driving this change:

“As AI moves from experimentation to deployment, governance is the difference between scaling successfully and stalling out. Enterprises where senior leadership actively shapes AI governance achieve significantly greater business value”

The intended audience for this buzzword bingo card should be obvious. The theme continues later in the report when they talk about my favourite subject, AI and business change.

“According to the leaders surveyed, insufficient worker skills are the biggest barrier to integrating AI into existing workflows.”

What follows is a list of “actions” business leaders are taking to address this perceived gap. Headed up by more training and listing no less than 9 areas where leaders are directing and controlling their workforce.

In the end, this report is probably a good summary of the conversations that are taking place in board rooms. But people drive change not business strategy. This tells me the process of recognising the changes AI will bring and responding is still in its early stages.

The Shape of AI

I have been looking back on my Project Two stuff from last year (more to come soon I promise). It is obvious to me that people’s use of AI has shifted in the past six months.

Ethan Mollick’s most recent article on the shape of the thing is more thoughtful and helpful in framing this.

“These are AI systems that you can just give work to, sometimes hours of human work, and get back reasonable and useful results in minutes.”

He goes on to give a reasonable overview of how change will likely evolve as AI spreads and develops:

“As AI capability crosses thresholds, it unlocks radical new use cases that change people’s views, sometimes overnight, about what AI can do. At the same time, organizations experimenting with AI will figure out how to make it work for them….

Maybe AI improvement hits a wall, organizations absorb the changes gradually, and the rolling disruptions become more manageable as people learn what AI can and can’t do. History is full of technologies that were supposed to change everything overnight but instead took decades to fully reshape the economy.”

I put maybe in bold there. Where I disagree with Ethan is on the next sentence:

“But I wouldn’t bet on it.”

He is firmly in the camp of “this time it’s different.” I am not. AI is a normal technology. The world will look different as people learn how to use AI. The process of learning and evolution that underpins the change will be fundamentally the same as previous cycles of disruption.

Practical signals

Building on my theme for last week, three other posts which talk about the practical realities of AI and business change:

Dancing with problems by John Cutler. What I love about this post is that he nails the real first challenge with uncertainty. You don’t know what problems you are solving or what questions to ask.

He includes a little taxonomy of questions which I also like. Dig deeper on this and think about whether you are asking yourself the right questions.

What the hell is a zero- employee business comes from the excellent Evan Armstrong. He is asking a fundamental question: can AI do everything?

His answer is a resounding No. I think this is right. AI will change how and where humans add value and do so in unpredictable ways. The mythology of AI running the world is just an irrelevant fantasy.

Worth reading especially for his analysis of Polsia. This is a company which appears to take the opposite view. Good thinking from Evan on where their real business model lies.

Finally, I have really been enjoying the EDGE series from Maurizio. He interviews real world entrepreneurs and business leaders with a practical view on how to make this stuff work.

The latest, Ferraris on Dirt Roads with Mario Peshev is no exception. I was especially taken with Mario’s clear focus on the real value he creates for his customers. Summarised by:

“He believes AI is currently cannibalizing itself. Businesses are optimizing internal processes to save costs, but they aren’t actually creating new wealth: if everyone gets 40% more efficient at the same task, the price of that task simply drops to zero. Mario’s story is a roadmap for how to survive the “race to the bottom” by pivoting from a service provider to a “Value Creator.”

Thanks for reading