Since the launch of ChatGPT in November, many leaders have seen the awesome potential of AI to change their business. But in some cases, it can even change your entire business model – or make it obsolete!
Here’s an example …
I know a young graduate who has been working for one of Australia’s largest professional services firms for a couple of years. At the end of her first year, she had an annual review with her boss and one of the partners. They told her that they were happy with the work she was doing, but there was one problem – she was working too fast! She was completing jobs that were estimated to take, say, 20 hours in just 15 hours. As a result, the firm couldn’t charge their clients what they used to charge in the past.
Now, just for a moment, let’s put aside the dubious ethics of a business that wants its people to work slower and reduce their productivity so they can charge clients more. Let’s focus on the business model instead. Many professional services firms have traditionally charged for the amount of work put in rather than the value generated. I’ve been warning clients in accounting practices, law firms, consulting practices, and other businesses about this for the last 10 to 15 years. If they continue to do this, they’re vulnerable to disruption. First, that work can be outsourced and done cheaper elsewhere in the world. And then, AI and automation will take something that used to take a human five hours and do it in five minutes or five seconds, which will completely disrupt their business model.
Many organisations are now finding this to be true.
Our world is moving towards the exchange of value. We negotiate a fair fee as a customer, and we expect businesses to deliver for that fee, regardless of how they get it done. AI is going to radically transform many organisations because of their business models. If you have a business model that charges your customers or clients based on inputs, then AI is a real disruptor, and you’re vulnerable. However, if you’re really looking at value exchange, then AI is a huge opportunity.
I wonder where you are now?
AI has been around for a long time, and it’s not hype, unlike some other things which are very speculative (I’m looking at you, NFTs, Metaverse, and Cryptocurrency!). In my Uni degree more than 30 years ago, my Honours thesis in Computer Science was about artificial intelligence. So it’s been simmering away in the background. Now, we have reached the tipping point, because everybody realises its potential, and it’s going to affect you, like it or not.
Download the worksheet below, which is a self-assessment survey to assess where you are and how ready you are to bring AI into your organisation. Do the survey, share it with your team, and figure out where you are now with AI. And then I’d love to have a conversation with you to help you figure out AI and other disruptions to your business, and how they will affect your short term, medium term, and long term future.