The swift evolution of AI technologies has begun to fundamentally reshape traditional business models. As such, executives from top-performing organisations are evolving the operating model to reflect new ways of working, according to a study by the IBM Institute for Business Value in partnership with Oxford Economics.

Organisations doing this, instead of “simply bolting innovations onto an outdated model,” are seeing a 36% higher rate of revenue growth according to the study. 

Re-working business models to elevate new technologies and phase out old ones is a common response to the transformational power of AI. However, the report cautions against focusing on the short-term and to take in the full scope: AI is creating a new division of labour between humans and machines. 

According to the World Economic Forum, 85 million jobs globally will be disrupted between 2020 and 2025, while at the same time creating 97 million new roles. In the same vein, 44% of worker skills will be disrupted by 2028. Despite this, IBM found that only 28% of CEOs have assessed the impact of AI on their current workforce in 2023.

What this points to is the need for organisations not only to adopt new technologies, but re-work business models and upskill employees to continue innovation in the midst of the shift. 

To do this, the study presents four steps to create a work environment that is people centric: 

• Prioritise with purpose: Use data to determine what moves are best for your organisation, starting small, testing new technologies thoroughly, and reassessing your business game plan are all ways to optimise new technologies for your specific use case. 
• Lead with an operating model, not the organisational structure:  In essence, keep the innovation user focused, shifting the paradigm from doing work faster to delivering more value to the end user. Doing this involves defining end-to-end product workflows, and making sure your employees have the tools necessary to succeed. 
• Make work more rewarding: Ground leadership in the employee perspective by giving employees a platform to discuss the potential use cases or optimisation among themselves, giving them more autonomy over how their work is done. Doing this will also develop next generation leaders, as employees feel more open to implement changes they see are necessary.
• Invest in talent as much as technology: Foremost, this strategy emphasises reskilling your workforce, but also positions AI-skilling as a career advancement opportunity for top performers. 

Recommended reading

• What Powers Artificial Intelligence? A Guide for Business
• AI: Cyber-friend or Cyber-foe?
• UK Competition Watchdog, CMA, Launches Review of AI Market

While 40% of the workforce will undergo reskilling due to AI and automation, the role leadership plays in heralding this new era of technology cannot be undermined. Aligning the transformation to some of the recommendations above will help promote both growth and organisational culture in tandem.