As a small business or solo entrepreneur, you’re likely already using —or thinking about using— AI, perhaps to speed up content creation, like writing articles or generating images with tools like ChatGPT, Midjourney, or other AI-powered platforms. And you’re doing good. But there’s a big difference between simply using AI and truly harnessing AI for business growth. Studies from McKinsey and other top organizations are showing this difference is already creating a dividing line between businesses positioning themselves for long-term success and those that will struggle to catch up. So, what is this difference? And what steps can you take to make sure your small business is on the right side of it?"
What Does 'Harnessing AI' Mean At All?
According to Salesforce, 80% of small businesses haven’t yet harnessed AI, while 93% of Fortune 500 companies are already using AI to drive growth. This doesn’t mean you’re not using AI, but rather that you’re not fully harnessing its potential. So, what does that mean?
The difference lies in how AI is used or integrated into your processes and operations. Using AI simply means employing AI tools as add-ons or complements to your existing operations, without embedding them deeply into the core of your business strategy.
[fs-toc-omit]Example
Using AI as an Add-On Tool: Let’s say you use AI tools like ChatGPT or MidJourney to generate blog posts or create images. You input a topic, get a draft, tweak it, and publish it. While you might save some time, you’re still managing each piece of content separately and manually adjusting your strategy based on trial and error. AI here is simply a tool to help you produce content faster, but it’s not fundamentally changing how your content strategy operates. This approach may improve your productivity slightly, but it’s unlikely to have a significant impact on customer acquisition or retention.
Integrating AI into Your Business Function: Now, imagine AI being deeply integrated into your entire marketing function. Instead of just generating content, AI analyzes your customer data to identify which topics are most relevant to your target audience, which keywords are likely to drive traffic, and even suggests the optimal time to publish content for maximum engagement. It then automates the distribution across your channels and continuously monitors performance, adjusting the content strategy in real time based on which pieces are driving the most conversions.
This increases productivity by up to 30%, as AI automates everything from content creation to distribution. More importantly, AI-driven content strategies have been shown to increase customer acquisition by 20%–40% as you're delivering highly targeted, relevant content. And with AI continually optimizing customer interactions, you can improve customer retention rates by 10%–20%, since you’re keeping your audience engaged with personalized, timely content. These results are transformative.
The Difference: Using AI as an add-on might save you some time, but fully integrating it into your business function leads to much greater productivity, faster customer acquisition, and stronger retention, delivering real growth that far outpaces traditional operations.
Why Does The Difference Matter For Your Small Business?
Why does it matter for you as a small business leader or solo entrepreneur? It’s about real impact, long-term benefits, and your overall business strategy.
→ Real Impact:
AI is often sought after to streamline operations, increase productivity, and enhance profitability. When you use AI as an add-on tool, you might see some gains, but they will be far below what you could and should achieve. While some tasks may get done faster, the lack of full integration means additional, small tasks pile up, offsetting the time savings you initially gained. These inefficiencies dent the overall benefits AI is meant to provide.
→ Long-Term Impact:
AI is not like traditional software. Think of traditional software tools as a hammer—they’re designed to do one job well, and they will always perform that task the same way. AI, on the other hand, is like a skilled craftsman who learns and evolves with each project. The sooner and deeper you integrate AI into your core processes, the more tailored and effective it becomes for your unique business. Over time, this means AI will deliver increasing value, something that’s not possible if you’re only using it as an add-on tool.
→ Business Strategy:
If you recognize that AI is not a passing trend but a transformative force reshaping entire business models, you’ll understand the urgency of embedding it into your operations. Failing to do so risks leaving your business behind. AI’s ability to continuously learn and adapt makes it essential for staying competitive and future-proofing your business.
How To Harness AI, So?
McKinsey provides valuable insights in its report, “The State of AI in Early 2024”. The survey reveals that Generative AI high performers:
- Integrate AI into multiple core business functions
- Recognize the risks of Generative AI and make AI proficiency a required skill
- Develop a robust AI strategy
Let’ me complement this a bit.
[fs-toc-omit]1. Integrating AI into multiple core business functions
Integrating AI into several core business functions—rather than just one—unlocks its full potential, because it doesn’t just improve isolated tasks; it creates synergies that multiply overall business efficiency. For instance, AI-driven insights from marketing can directly inform sales strategies, while automation in operations can feed into customer service improvements. By embedding AI into multiple areas, you can streamline workflows, improve decision-making, and drive better outcomes across the board. In contrast, using AI in only one function limits its impact and keeps you from seeing the broader, transformative benefits AI offers.
[fs-toc-omit]2. Building a sound AI proficiency
To thrive during the AI transformation, you’ll need more than just awareness—you’ll need a solid understanding of how AI is shaping the future. This is where AI proficiency comes in.
AI proficiency doesn’t mean learning to build AI systems from scratch. It’s about staying informed on AI developments, understanding how the technology is embedded in everyday products, and making strategic decisions on how AI can impact and benefit your business. By building this knowledge, you’ll stay ahead of the curve and steer your business successfully through the deep and rapid changes AI brings.
[fs-toc-omit]3. AI Strategy is Yours
Your AI strategy shouldn’t be something you hand off entirely to a consultant or tech team. As a business leader, it’s crucial that you personally guide how AI is integrated into your operations. AI impacts every corner of your business, and it's your responsibility to ensure that its adoption aligns with your company’s vision and goals. Delegating this critical task without your direct oversight risks misalignment or reliance on solutions that may not fully address your business needs.
To be clear, outsourcing isn’t the issue. The real risk lies in outsourcing without having enough understanding to make informed decisions. When you maintain a foundational understanding of AI, you stay in control of your strategy, avoiding jargon or shiny, ineffective solutions that don’t contribute to your long-term growth.
Learning to leverage AI yourself means you remain at the helm, with the flexibility to unlock its full potential on your terms.
Conclusion: Why Harnessing AI Now?
Now that we’ve explored what it truly means to harness AI, the next step is clear—it’s up to you, as a small business leader, to make it a reality in your operations. And it’s urgent. The longer you wait to integrate AI, the harder it becomes to catch up.
Why? Because AI doesn’t just improve incrementally—it accelerates growth exponentially. Early adopters gain an ever-increasing advantage by continuously refining their processes. AI learns, evolves, and gets smarter over time, creating a 'no catch-up effect.' Businesses that fail to act now will find themselves at a significant disadvantage as those leveraging AI push further ahead, reaping compounding benefits.
The sooner you start, the sooner you’ll position your business for lasting growth and success in the AI era. The choice is yours, but the time to act is now.
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