Small Business Is the Way

Commentary

We are in the midst of yet another technological revolution, this one driven by artificial intelligence. It’s taken me several months to learn its merits. Once you see how to get maximum value, it can be an astonishing tool in saving time and resources better used elsewhere.

The key to using AI is to discern routine operations from ones that require creativity, judgment, intuition, and discernment, which can only be performed by humans. That takes time and practice, but once you see it, you can also see how dramatically impactful this is on our professional lives.

In talking with many people in business, I’ve noted something that could profoundly affect how these new systems are rolled out. Small institutions that are intent on economizing on resources, becoming early adopters of new technologies, and saving labor expenses absolutely adore AI. They take to it quickly and weave it into every aspect of their operations.

It’s different with larger companies with huge staffs, legacy structures, and stodgy systems of project management. They are not adopting AI. They are playing with it at the most superficial level. They are not that interested in integrating it into how they manage or operate.

This should not surprise me. I’ve seen this for years. The larger the company or institution, the less flexible it is. They are weighed down by best practices and large operational manuals. Such institutions have worked very hard for many years to achieve something like coordination between thousands of departments and tens of thousands of employees. They cannot disrupt what has evolved without profound risk.

As a result, they leave opportunities on the table.

In a practical sense, here is what is going on. It mirrors exactly what we have seen over the past 30 years with the internet and other digital services. In large companies, the management structure, especially at the highest levels, becomes strangely cut off from the actual doers within the company. The longer this is true, the less management knows about the tactile realities of how the company works.

Management loves issuing edicts, setting goals, evaluating results, and judging performance. It is far less good about knowing anything about what is actually going on in the daily work life of real employees.

Let me give an example from the last technological revolution of the internet. I knew a CEO of a company that lived or died based on its digital presence and performance. You might think that this CEO would know everything about the technology. In fact, he knew nothing at all. As a result, his workers pulled the wool over his eyes daily.

One day, he decided that he wanted a change in the look of a website. It was a small fix, a font. He fired off an email to the head of design. The design head said he would put it on the list, and sent the change in the form of a work order to people working for him. Eventually it landed on the desk of a guy charged with managing the fonts. Weeks went by and nothing happened. I asked the CEO why. He responded that such changes take time.

I knew otherwise, so I went to the guy whose job it was to make the change. I asked whether this was not just a tiny change, even one digit in a style sheet. He responded that that was exactly right. But, he continued, if he had done that as soon as it was ordered, he might have conveyed the impression that his job was easy. There was better job protection to be found in delaying weeks and months, in order to give the impression that his work was arduous and required highly specialized expertise.

I was astonished and mentioned this in passing to the CEO, who did not quite believe me. Then he changed the subject, took a phone call, and went off to a scheduled meeting with other managers.

The change itself finally arrived about six weeks later. He actually delayed for a month and a half what could have been achieved in less than a minute after the CEO requested it.

This is not some strange and singular anecdote. This problem of information asymmetry afflicts every large organization. They are all bogged down by detached management structures and workers who have become very good at faking it, extending every task as long as possible in order to build in job security.

If you think that this is bad with on-site workers, it is much worse with contractors. I was at a firm once with an operations executive who decided that our website needed better search engine optimization. He tapped a golf buddy who had a friend who ran an optimization consultancy. The operations executive signed a contract for $150,000 to get a full audit of the website and optimization strategies.

Three months later came the day of the great reveal. I was in that meeting. The consultancy displayed the work of its large staff to the management. On the list it presented, in a beautifully typeset PDF and PowerPoint presentation, was a series of terms they said needed to be rolled into content creation.

I had long smelled a rat. In the meeting, I asked a free AI tool to make suggestions for me for the same task. In a few seconds came back a full report, entirely for free. As the muckety-mucks spoke on the video call, I flipped my screen around to show the CEO what I just did in a few seconds for free. His eyes popped out in amazement because of course he was looking at the exact same thing being presented on the screen.

The call ended. Everyone tried to forget the whole fiasco. There were no apologies and certainly no praise to me for having exposed the hoax. It was the opposite: My interventions were seen as those of a pest. I had exposed a scam and no one appreciated it.

Sadly, this experience is not unusual in any firm of a certain size. This kind of trickery, ignorance, petty racketeering, and bogginess is extremely common in corporate America. Are these people going to be early adopters of AI? No chance. They were slow with email, slow with cloud computing, slow with systems of internal communication, slow with apps, slow with any and all systems that would economize on resource use.

It’s the bureaucracies and systems that weigh them down. Systemwide, they literally do not know how to change. And they really do not want anything to change. Large institutions are filled with employees who fear that they are barely hanging on to their jobs, management structures that are stuffed with overpaid but incompetent bureaucrats, and CEOs and their staffs who guard their privileges and emoluments like royal jewels.

None of these people really want disruption.

It’s different with small firms that are new. They are not too proud to try. They need every advantage. They are frugal. They seek out every new tool for doing a better job. These are the people who are adopting AI now. And this is why they will grow and how they will challenge the big shots.

A decade from now, there will still be legacy large corporations doing things exactly how they are doing them right now. But they will be dealing with a thousand smaller players out there who are eating into their market share by being early adopters, producing with a focus on excellence, and minimizing bureaucracy.

This is the reality of how technological revolutions unfold in real life and why they end up completely reshuffling the deck of who and what is on top. Once the lean upstarts get trapped with processes, best practices, endless meetings, and puffy bureaucracy, the process starts all over again.

The future of enterprise in a world of AI is with the upstarts, the dreamers, the tiny firms, the imaginative founders and entrepreneurs. They are the people who love change the most. The rest prefer the status quo, even if it leads to their doom.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.