We’ve all heard about Artificial Intelligence, or AI for short. Touted as the next big thing since the proverbial sliced bread, everyone seems to be talking about it, with many commentators saying that all businesses should embrace it if they don’t want to be left behind.
While it is all well and good to say that ‘all businesses should embrace AI’, when one steps into the real world however, the answer to the question of ‘should your small to medium business (SME) embrace AI’ is highly situational and lies somewhere on the spectrum between yes and no.
Thinking back quite a few years, the business world went through a similar dilemma with the social media craze. We were all told by marketing gurus and the like, that unless you were on the socials, your business didn’t exist. Some went as far as pushing the notion that social media was your gateway to unlimited visibility and customers. As a result, we saw a huge flurry of activity in the social media space as SMEs clamored to attend workshops, seminars, conferences, both private and government funded, digesting, along the way, vast troves of information about how to use social media for business, how to use it to make money, how to become an influencer and to be seen.
Fast forward to today and we can safely say that the social flurry has settled down, and with it, the dust of ‘fad-ness’ has somewhat dissipated, leaving behind reality to contend with. This social media reality includes acceptance that social media is just one tactic amongst several that form the broader marketing and customer relationship plan for most businesses. We now understand that social media for the most part is just another tool that can assist an SME gain brand visibility while helping with customer interactions. Not every business needs to be on Facebook. Not every business needs to be on Instagram or Twitter, LinkedIn or Tik Tok or whatever new platform comes along. We cannot apply a ‘one rule for all’ approach when it comes to socials. A small country town bakery operated by a gentleman in his 60’s will have differing abilities and needs compared to the startup fashion brand operated by a 20-something young woman in suburban Sydney. In fact, when discussing such new technologies, one must factor digital capabilities into the equation. The ability of a business leader to understand and use technology, has become an important factor in the digitalisation of that business and, this includes the business’ ability to leverage socials the right way.
Bearing the above in mind and now turning our focus back on the AI discussion, we can see how the question of ‘should you or shouldn’t you use AI for your SME’ is dependent on far more than relying on media commentary and the myriad of biased professionals and service providers who tout on a day-to-day basis. Yes, AI is powerful. We’ve seen how AI can be used in marketing to gain insights into customer behaviour, market trends and more. We’ve seen how AI can be used to automate processes in manufacturing, or workflows in a service business. The list goes on and the benefits are clearly identifiable. But, like we’ve seen in the social media space, AI should be considered as part of a set of tools in the context of the entire business and we should remain cautious of not over-focusing on this one tool at the expense of everything else.
Herein lies one of the biggest issues with AI for the SME, and this was also the case with social media: it lends itself to the act of digital distraction, to the ‘pretty butterfly’ effect, causing one to focus on the shiny and new, as opposed to what we already have, which is often seen as ‘dull and mundane’.
Fundamentally, EVERY business has the exact same foundations on which owners and their teams build out and enact visions, missions, culture, and so on. These foundations include people, process, sales and marketing, operations, finance and more, and it is the possession of solid foundations which all successful businesses have in common. Now, the problem faced by many SMEs is that their foundations are not solid. When we examine why this, three prominent reasons are found:
1. Disinterest
2. Lack of knowledge and/or skills
3. Lack of time and/or money
For many business owners, foundation building topics such as setting budgets, developing plans, or implementing people management processes, are either simply boring, dull, mundane topics, or, too foreign, leading to avoidance tendencies. As a result, failing to manage these fundamentals generally leads to lacklustre business performance. People in general don’t like doing boring, mundane, scary things, and this leads to procrastination or total avoidance behaviours. This is why when something new and flashy comes along, especially when it is being pushed by so many, touted to do so much, that so many people latch on and seem to almost lose sight of reality in pursuit of this shiny new digital butterfly. After all, it’s more interesting to pursue something shiny, than to have to focus on the dull.
From an AI perspective, the harsh reality however is that unless the purpose of the AI is to address fundamental problems, and the leader and their team are capable enough to leverage it for such a purpose, this digital distraction will end up resulting in nothing much changing from a business performance perspective.
Let’s now come back to our question and provide you with an answer.
Question: Should your small to medium business (SME) embrace AI in 2024?
Answer: Yes and No. In fact, there is no right or wrong answer. The answer is highly circumstantial and depends on a multitude of factors, including how effective your business’ foundations are, how digitally savvy you and your team are, how committed to technology you are, the future plans for your business, access to knowledge and skills, time and money.
For most businesses, there can be a benefit to using AI, however, the benefit can only truly be realised if the AI meets any one of the criteria below, as opposed to just jumping onto it because everyone else says you should:
• If the purpose of the AI is to address a foundation gap
• If the purpose of the AI is to add value in some form, such as enhancing a foundational component
• If the purpose of the AI is to generate a competitive differentiation
Just remember that ultimately AI is great, but if you have a business built on poor foundations, and particularly where there exist people and/or finance issues, the benefits of AI will be hard to achieve and you will run the risk of wasting significant time, money and other resources chasing a pretty digital butterfly. At times, holding off chasing digital butterflies and addressing the foundation issues makes the most sense. This is especially true when addressing these fundamental issues leads to improved performance and provides the right foundations, while also informing your decision to embracing AI correctly.