Automation is a CEO’s Job

How do you decide what to work on?

When you run a business you focus on growing it, spotting new opportunities and holding off threats. The more routine your days, the more likely you are not doing these things. Micromanagement and being unable to delegate dilute your impact as the boss.

In contrast, people working for you perform routine tasks. These are the things that every business does but are not strategic. Preparing the accounts, ordering supplies and completing spreadsheets are common to almost all businesses.

When these routines work there is little incentive to change them. New software might save Beryl in accounts a couple of hours a week, but it costs money and you don’t have much else for Beryl to do. There is little urgency to change.

How sustainable is your business?

When you run a business you focus on the product or service that you supply. You look for opportunities for more efficient delivery, to sell additional services to clients and to find new ones. There is little time to worry about your environmental footprint.

Most of your impact is out of your hands. You do not control how your electricity provider generates power. You have no say in how suppliers package your purchases. You must travel to meet clients in person.

Sustainability accounting becomes a box-ticking exercise and a cost. Most companies are too small to influence their value chain. Taking your business elsewhere is inconvenient and does not affect large companies.

Leadership Initiatives

New initiatives come from the top. The number one predictor of whether we won new business at GIST Impact was CEO involvement. When we worked with sustainability executives, our job was to help them convince colleagues about a new course of action.

Automation is similar. The boss is unlikely to be bothered about saving a few hours here and there if it does not impact their priorities. Let’s take an example.

Construction is one of the largest polluting industries, yet small contractors who form the bulk of the workforce cannot control this. They respond to tenders to win business. When specifications become more sustainable, they must adapt.

Contractors are notorious for being technology backwaters. Estimation is done on spreadsheets, data copied into tender forms and perhaps plans illustrated in a PowerPoint.

There is a lot of time-saving automation that can be done. Inventory can be linked to estimation software, changes trigger updates to finance and records updated in a CRM. Yet the company copes without these today and there is limited appetite to spend on internal systems.

The tender process is different. The more tenders a company submits, the more business it will win. Finding a way to automate the production of tenders has a direct impact on revenue and therefore tweaks the boss’s interest.

This becomes urgent as the industry shifts to sustainable materials. Existing staff have limited knowledge in this new area and traditional suppliers may need replacing. Software that reads a blueprint, estimates quantities and prices a tender, transforms the prospects of the business.

Now the boss pays close attention.

Three Types of AI Automation

We are seeing three types of automation. The first is task automation that cuts costs. If AI can handle 100% of a role without the need for human verification, then the role can be replaced.

This is what a recent Stanford study showed is happening for entry-level jobs. It is based on data from ADP in the US. The payroll provider is strongest in the middle market and companies here have scaled back new hires in favour of automation.

The second automation requires human-in-the-loop to verify outcomes. This is increasing the demand for experienced workers with knowledge of industry best practice. Roles change and these workers become more valuable because they handle larger volumes.

The third automation is rare. This is when companies are reimagining industries, as a disruptive startup would do. It takes years to do this and the work is done in stealth mode.

Azeem Azhar likens AI to the adoption of electricity. Light bulbs were installed in factories to extend working hours almost straightaway. But the production lines were not reconfigured to use electricity for years, until companies were sure the benefits outweighed the risks.

There is every chance this is how AI evolves.

Sustainability and Automation

If you run a small business you are unlikely to replace existing workers with automation. People are loyal, perform multiple roles and the savings are small. You will think twice about a new hire though, when automation is an alternative.

The big difference between sustainability and automation initiatives is that the latter are in your hands. You may not be reinventing the industry, but you are able to automate tasks and to introduce human-in-the-loop augmentations.

This is a strategic priority you should be working on.

Questions to Ask and Answer

1. Am I spending enough time on business strategy?

2. Where would automation make the biggest difference?

3. Am I waiting for external pressure to force me to change?

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