Navigating the AI transition: why change management is business-critical
16 Jun 2023
In mid-May, BT Group became the latest large company to announce significant layoffs after the firm revealed plans to slash 55,000 workers by the decade’s end, with artificial intelligence replacing around 10,000 jobs.
The gloomy news should provide yet another wake-up call for employers and employees. It underscores a Darwinian reality, albeit in a digital era, that organisations worldwide face: evolve or die.
Such transformative developments have led us to ponder the role of artificial intelligence (AI). Many have spoken about the potential of AI to revolutionise business processes, from improving forecasts to enhancing demand planning. But this is only part of the picture. And now, thanks to the mass adoption of generative AI, this tool’s threat and opportunity have become personal.
If businesses don’t keep pace with innovation and their industry rivals, they will perish. So business models have to be updated. Indeed, PwC’s latest Annual Global CEO Survey, published in February, revealed the need to change and innovate. Some 75% of the global CEOs questioned said that they thought their business would suffer a decline in growth in the coming year, mainly due to economic uncertainty and market volatility.
Moreover, 40% of respondents said their organisation would not be economically viable in a decade if things stay as they are. So there is an urgent need to shift away from a business-as-usual approach, and technology – and AI specifically – is a big part of that evolution. This tech is not a flash in the pan; it will burn brightly from now on. Alphabet’s CEO Sundar Pichai recently claimed that AI’s impact would be “more profound than electricity or fire”.
In the same way that many of the wealthiest people in today’s world – Bill Gates, Elon Musk, and Jeff Bezos, for example – surfed the first waves of the internet, there will be considerable financial winners of the AI epoch, which is just beginning. Some people are already seeing this move in to AI (powered by the likes of Chat GPT) but at what cost?
Business AI, which is what most people have been talking about for a while, will be particularly transformative. It is clearly on an upward trajectory. With more and better data, predictions and forecasts that help organisations plan for the near and distant future will also improve. But businesses will still need humans in the loop to interpret whether the AI-suggested plan is the best.
However, in addition to the business AI outlined above, we are now starting to see the more dramatic, life-changing AI, which has the potential to save or destroy humanity, depending on your flavour of columnist. Of course, the truth will probably fall somewhere in the middle. And it’s not too fanciful to imagine that before long, generative AI, for instance, will be able to supersede many artistic and rules-based professions.
An exciting future is possible, but that is little consolation for the BT workers who are anxious about losing their jobs in the coming weeks, months, or years.
One of BT’s most successful advertising campaigns, from the 1990s, featured late actor Bob Hoskins and ended with the tagline “It’s good to talk”. I wonder if the company verbally or digitally warned the thousands of current staff about the axe being swung. It would be darkly ironic if communications firm workers were disconnected from reality.
Because, as the AI revolution gains momentum, change management is a critical piece. It truly is good to talk. And for businesses to thrive in the coming decade, man and machine must work together.
So, what advice do I give businesses as they navigate this transition? There are two key aspects to consider. Firstly, companies need to recognise that AI is not just about forecasting and improving the business; it’s about enabling transformation and reinventing the whole operation. Organisations need to plan for how they can utilise this information to enhance their current business planning capabilities. I am seeing this coming up more and more with clients who have a robust planning process and are looking to take it to the next step. If you currently have an immature process then the urgency to improve it to benefit from these enhancements is increasing.
Secondly, as evidenced by the BT announcement, organisations are already making decisions on headcount because of AI. If you’re not thinking about how AI could impact your business and your consumers, you will fall behind. It’s not just about your business planning processes - AI can be utilized to enhance your media/marketing activities, help understand key consumer trends and help you to improve your product/service offering.
Embracing AI and its transformative potential is more than technology; it’s about people, processes, and mindset. It requires acknowledging the disruption AI can cause, understanding the potential anxiety among staff, and providing the necessary training, support, and reassurance. We are currently at the dawn of a new era; its significance cannot be underestimated. Businesses must actively manage the transition, ensuring that they harness AI’s potential without sacrificing their employees’ engagement or consumer relationships.
For leaders that approach AI with an open mind and a willingness to change, it offers a chance to streamline operations, enhance productivity, develop and launch products future consumers will need, open up new markets/opportunities, and stay competitive. Ultimately, businesses that fail to manage this change effectively risk becoming one of the casualties of this transformative era.