When the world is awash with AI, companies will realise they are table stakes and come back to what drives real competitive advantage. That is of course, unless we develop a two tier system, the haves and have nots. In other words, those that use AI to drive competitive advantage and those that don’t. Which is a real consideration when you consider the cost.

I don’t think this world of haves and have nots will be a reality though. I think AI will become ubiquitous and almost like a utility. And then the key question becomes how are you driving competitive advantage, with but also outside of AI use. Those that are already starting to think this way will have the edge. In this post I want to explore two areas of specific attention..

1. People and Performance

Two companies I am very interested in are covering this area (one I work for – disclosure) so read these articles for background:

• The New Performance Equation in the Age of AI (microsoft.com)
• Managing human capital: Performance through people | McKinsey

Aa much as there is talk of AI and robots replacing people, I believe it is much more about people using AI that will replace people that don’t.

And then the age old questions all companies have ever faced but must do so increasingly now and in future – what makes us different, how do we perform better against our competitors, what is our strategy for success going to look like.

On this last point, I think a clear lever of success will continue to be your people and how you attune them to perform best and/or better than competitors.

Below I highlight the main points I want to make from these two articles which are based on research by the respective companies.

Microsoft Study

Amid economic uncertainty and the transition to flexible work, leaders are under pressure to increase productivity in flexible work and do more with less. At the same time, next-generation AI is changing the game for how organizations gain a competitive advantage. In this dynamic environment, employee engagement may not seem like a priority. New research tells a different story [emphasis mine].

Three key findings from the Microsoft study which proposes a new performance equation (employee engagement and productivity drive performance) are that:

1. Employee engagement matters to the bottom line—especially amid economic uncertainty.
2. Clear communications and goals unlock employee engagement.
3. To sustain engagement, build a feedback flywheel.

McKinsey Study

Human Capital is not a new term but I think in light of what I have been saying and as the Microsoft study also has found, it takes on new meaning and urgency. The main findings from the McKinsey study bear this out – pasted below for easy access but read the article for detail and indeed there is a link to the full report in it too.

• When companies emphasize skill development, it pays off for workers. 
• Building human capital also pays off for firms in the form of more consistent earnings and greater resilience during crisis. 
• Some firms (“People + Performance Winners”) prioritize developing their employees and manage to deliver top-tier profitability at the same time. 
• People + Performance Winners have a distinctive organizational signature that challenges and empowers employees while fostering bottom-up innovation.

2. Business Outcomes

It’s about the business not the technology.

I will never tire of saying this. How you apply technology to achieve advantageous business outcomes is all that matters. It’s like the difference between a strategy and a plan. The strategy is about where you’re choosing to play, how you’re choosing to win and the capabilities and management systems you need to have in place. The plan is how you intend to use technology to help you achieve your strategy, amongst many other things.

How you focus on business outcomes – for employees, partners and most importantly, customers – is how you create competitive advantage, to bastardise a famous quote by Annie Dillard that I love.

I cannot say more than what I have already done in several articles on this topic, some linked below, many others with the business outcomes tag – enjoy: