There were interesting results from Deloitte consulting, saying that while 80% of Nordic leaders believe that AI technology brings efficiency benefits, less than 20% believe it adds to turnover. What this means is that the benefit is in the savings, not the expansion of business. It is in shedding headcount, not in increasing revenue streams.
Little surprise to me at this stage.
There are very likely exceptions across industries, but I think it is worth noting still that while the back office can benefit a huge amount from automation and even creation, a lot of the direct revenue building activity that leads to sales, is still human to human. That human can be supported with information and even some communication, but if they are unable to convert that collateral into a relationship and demonstrate business impact, it is unlikely to provide much assistance at all. That means that good sellers are still required, especially in the B2B sectors.
The problem with efficiency savings without revenue increase is that there is a floor on how much saving can be made and when that floor is reached, there is no more capacity for increasing percentage gains year on year, which is not a great situation for attracting investors. But especially with the current economic and global political environment, the focus is on cost reduction, rather than revenue expansion, and this is leading to a degradation in many businesses of the quality of their human capital - the people who increase revenue, but come at a cost.
If you consider a sporting team that hires the cheapest players competing in a league of teams who hire the most suitable players to win games, it is similar.
Most companies across the globe say some crap like "Our people are our value" but we all know that is nonsense marketing for corporate branding. When it comes down to it, people have to provide value in order to be valued, which is why a lot of companies aren't hiring non-billable positions. The challenge here though is that a lot of the billable positions need support to be their best, and they aren't going to get it from other billable positions, nor are they going to get enough help from AI to improve their human to human skills.
They aren't going to get it from more reports, more analytics, more detailed information about their target companies or industries. They need to develop their interpersonal skills and improve how they use the information they have to make an impact on their audience, which is other humans. And with a tight market and competition, standing out of the crowd of information overloaders with clear communication from people who feel trustworthy, is vital. And with often limited pools of targets, it also means that practice prior to gameday is important, which also comes at a cost.
But the benefit of getting a sale will more than offset the cost of enabling the sale. However, the cost of losing a sale is far less visible, because it never really makes it into the books. And often when losing a sale, the reasons for the loss is not attributed to inadequate interaction, and instead identifies all kinds of excuses to redirect the blame. All sellers and sales teams presume they are great at their job and rarely say "we just weren't good enough on the day" in the way a sporting team might. And as such, they won't necessarily spend the effort training to improve so next day, they will play the game better.
I have been dealing with Sales Enablement for a while now, and while many companies and teams focus on the quality of information they provide the sellers, I believe the actual focus should be on building the skills to deliver the information effectively. This has been made even more clear with the capabilities of AI to provide far better information on request to sellers than an enablement team can do anyway. But sellers have to adjust for the new environment also, which is going to mean retraining or the inevitable truth becomes, they are unable to add enough value to remain being one of the people in the company.
AI is a tool and it has a lot of promise, potential and even now can deliver value. But "buyer beware" that at least at this point, it isn't a replacement for the human engagements needed for increasing sales in B2B markets. I predict that the companies who lean too heavily on AI users rather than building interpersonal skills, are going to find themselves increasingly struggling to increase revenue, which will ultimately force them into even deeper cost-saving measures.
A business death spiral in a world that moves as quickly as the economy now.
Taraz
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