Transitioning your Firm to the New AI Landscape. Are You Capitalising on Your Opportunities?
18/9/23
On a warm evening last Friday, 14th July, I landed at Los Angeles International Airport and got an Uber to my hotel. When I checked into my hotel room and put the TV on, the leading news story was about the Hollywood strikes.
The rise of AI had actors and writers worrying about significant numbers being replaced by technology. This was a momentous occasion, as it was the first time in six decades that Hollywood writers and actors were on strike together. From a strategy perspective, the Hollywood film industry is in transition, and there is little to indicate what the "new normal" will look like.
This article will apply the same logic to all firms where transitioning to a sustainable growth-based model needs a fresh new approach. The new system will require a new business model in sync with the firm strategy. As the transition occurs, new skills will be needed to take advantage of opportunities in each sector. Getting it right will reap huge rewards. According to recent research by McKinsey, the strategy consultants, AI could increase corporate profits by $4.4 trillion a year!
Staying ahead of the curve is essential for long-term success in the fast-paced business world. The rise of AI has ushered in a new era of opportunities and challenges for businesses across various industries. The question is, is your firm capitalising on these opportunities or lagging behind the AI landscape? The success of the transition will depend on a firm’s ability to anticipate risks, scale, and service capabilities and overcome a traditional mindset. If firms move into higher-value services too quickly, they risk impacting their brand, reputation and market position
Important questions I see leadership teams ask include:
So, how do we transition?
How do we remain at the forefront (or fast follower) of AI-related opportunities within our sector?
What fresh skills do we need for the future that we don’t have now that we will need?
Who do we need to form new working relationships with?
Do we have an appropriate financing model?
Professional service firms that see the above opportunities must consider the labour challenge, too. According to LinkedIn data, the professional service industry has the highest staff turnover rate. Workers cite problems with burnout, flexible working and career development. So, professional firms may have technical expertise within their workforce but must engage their human capital to deliver the new business model.
Selling the idea internally to navigate your transition successfully will require an effective structured conversation among the firm, involving:
Problem definition
Negative effects
Idea generation
Stakeholder benefits
Preliminary evidence
Recommendations
Action plans
In conclusion, transitioning your firm to the AI landscape to get some of that $4.4 trillion a year market is not a choice but a necessity in today's business world. Hollywood management, actors and writers will eventually overcome their conflict. Embracing AI can unlock new opportunities, improve efficiency, and stay competitive. The key is to start now, invest wisely, and continuously adapt to the ever-changing AI landscape. Don't let your firm be left behind—capitalise on the power of AI to secure a brighter future for your business.
ENDS