You’ve probably heard about the AI revolution from everyone—your colleagues, your employees, and your investors.
Even your next-door neighbor seems to be singing the praises of mankind’s latest technological leap.
One thing this article isn’t going to do is tell you how AI is all sunshine and rainbows for SMBs.
It will, however, give you the expert-led strategies your business needs to survive and even thrive in the midst of AI disruption.
In 2023, a report by ResumeBuilder found that 37% of 750 business leaders have already used AI to replace workers.
Then, there’s the frigid frostbite of 2023’s SaaS Winter still nipping at our keyboards in which investors flocked to fund AI as humanity’s next best thing, leaving many SaaS SMBs in the cold.
So, is artificial intelligence going to take over the world of SMBs, leaving a dystopian Brave New World in our wake? Not quite.
Is AI drastically disrupting the way SMBs function with both positive and negative aspects? You bet.
Artificial intelligence is a double-edged sword. On one side, you get enhanced productivity, decision-making, and overall efficiency.
On the other, you’ll have to deal with job displacement and the uncertainty of shifting workplace dynamics.
So, how do SMBs begin to navigate the perilous roads of artificial intelligence and use it solely to their advantage?
That’s exactly what we’ll be explaining in this guide—with a little help from fellow SMB founders, HR specialists, and CEOs.
Unpicking AI’s rapid growth in 2023
Before we get into the nitty-gritty of how AI is impacting SMBs today, we first need to understand its explosive growth throughout the previous year.
While AI has been a buzzword for decades, it came to the forefront with generative language learning models like Chat GPT and Bard at the end of 2022.
These tools use deep learning methods to understand, summarize, and create new outputs based on large data sets.
With its ability to generate content and automate processes, companies seized the opportunity to adapt AI to their workflows.
It’s not difficult to see why. Generative models allow SMBs with limited resources to streamline their operations, shaving off time while enhancing productivity, often at a fraction of the cost.
So just how widespread is the adoption of AI in SMBs? According to a recent report, 29.5% of 1,467 SMB CEOs surveyed have stated that AI is the most influential technology impacting their business.
Another report states that up to 29% of small businesses have already adopted AI into their workflows.
The dark side of AI: job displacement and rapid reskilling of teams
For many CEOS and SMB decision-makers, welcoming AI as a useful tool seemed like a no-brainer.
While machine learning models can certainly be helpful, there are still plenty of issues that come part and parcel with the whole package.
In fact, we’re just beginning to see some of the downsides of AI as it rumbles through the jungle of an ever-changing job market.
Automation tech leading to layoffs
One of the greatest advantages of AI is also one of the biggest reasons behind the displacement of jobs.
AI models automate workflows and allow for completing repetitive tasks in less time while leaving now-to-no room for error.
As a result, many companies have turned to AI to complete repetitive tasks or manage projects.
Ironically, AI is already leading to workforce displacement in the very industry that created it.
In recent months, more tech companies in Silicon Valley have noted AI as the reason behind an increase in layoffs.
This trend is most notable with mid to large-sized businesses. For example, the file-storage company Dropbox cut about 16% of its workforce while citing AI.
Workforce training programs are playing catch-up
According to IBM, major businesses believe that up to 40% of their workforce will need reskilling in just the next three years.
With the increased use of machine learning, many SMBs are aiming to retrain employees affected by AI-driven role displacement.
However, it’s becoming increasingly difficult for decision-makers to do so.
As AI continues to evolve, businesses continue grappling with understanding the future skills employees need.
A seemingly up-to-date training program can easily be rendered ineffective in the long term due to the speed of developing models.
Neatly implementing AI in your workflow requires identifying skills gaps and training employees to use your chosen models effectively.
While it can significantly shorten repetitive tasks, algorithms can’t work without someone to operate or input to them… yet.
“Training staff alongside adoption prevents AI anxiety. We assure teams AI handles the tedious parts of jobs like data entry, freeing them towards higher judgement roles.
Hands-on guidance explaining AI limitations while showcasing output quality and direct productivity benefits through coworker testimonials facilitates trust in the new tech.
Leadership sets the precedent conveying AI as a collaborator.”
So which skills will SMB decision-makers need to prioritize?
“Integration Skills: Encourage employees to learn how to integrate NLP tools into daily operations, like a customer support team learning to use NLP for analyzing customer feedback.
Data Literacy: Enhance data literacy, especially in interpreting NLP outputs. A market research firm could train its analysts to understand sentiment analysis results from social media monitoring.
Critical Thinking and AI Interpretation: Teach staff to critically assess NLP outputs. An HR team might use NLP for resume screening but also needs to interpret the results critically to avoid missing potential candidates.”
It’s not all doom and gloom: exploring the advantages of AI for SMBs
Despite the concerning challenges around AI for SMBs, there is a silver lining.
AI poses a worthwhile opportunity for resource-constrained businesses to improve workflows, provide personalized service, and analyze vast data amounts quicker and more accurately.
Let’s take a look at some of the ways AI can help SMBs succeed.
Increased efficiency and productivity
Artificial intelligence allows SMBs to do more with fewer resources. Most notably, it excels at streamlining repetitive tasks efficiently and in shorter time frames.
Take generative AI as an example. By analyzing data, it can produce a large output necessary for research and trend prediction.
“AI is currently accessible as a copilot for white-collar workers. It helps people write better, do research, get outlines of written story ideas, edit videos, create images, and scrape data.
If it was a manual and tedious process before, AI makes it faster and easier now.”
However, not all AI models are the same. To ensure you’re getting the most bang for your buck, you’ll need to choose one that aligns with your specific business objectives and budget.
For example, business intelligence tools are beneficial for uncovering important customer trends, while NLP tools automate processes involving human language like translation.
SMBs with budget constraints will also need to consider the upfront cost of implementing AI models into their workflows.
Lyn Collanto tells us more:
“The key for smaller teams is targeting purpose-built AI tools priced accessibly for SMBs rather than enterprise-geared platforms with heavy license fees.
Specialized sales writing assistants, dynamic video creators, design optimizers, and more now offer budget-friendly plans with generous free tiers to get started.
These compartmentalized apps refine singular workflows versus overhauling systems.”
This is exactly what ChatGPT Team has done.
Enhanced decision-making
AI analytics tools are rapidly changing the way SMBs approach decision-making.
Algorithms can analyze large amounts of data, allowing them to make informed decisions faster.
This makes it easier for SMBs to swiftly respond to market changes like customer demand, preferences, and operational changes in real time.
But, it doesn’t end there. AI tools can also make forecasts for upcoming trends based on historical data.
With data-backed predictions, SMBs can weather the storm of shifting markets—heck, they can even predict it coming.
Improved customer experience
As AI becomes more developed, so does its ability to offer a personalized service on behalf of small and medium businesses.
Sophisticated algorithms and chatbots can learn from previous conversations with customers.
Remembering purchase history, preferences, and quick replying guarantees a smoother customer experience.
This is exactly what Intercom now offers with their AI chatbot: Fin.
With enough insights, models can even forecast relevant product or service choices and proactively suggest them while engaging with customers.
In fact, Forbes and McKinsey & Company found that AI has helped businesses improve the customer experience by 70%.
Ethical and societal AI implications leaders need to consider
AI has the power to analyze enormous amounts of data, helping you streamline workflows or make data-backed choices you need in a matter of seconds.
But with great processing power comes great responsibility—that’s what they say in Spider-Man, right?
The way we use the bots that are slowly becoming a part of our daily lives can have a ripple effect, impacting local economies while simultaneously raising ethical concerns.
Let’s explore.
Understanding AI’s effect on local economies
“AI’s influence on local economies embodies a double-edged sword: it generates opportunities in technology-centric fields, yet simultaneously prompts job losses within conventional roles—especially those involving administrative duties and repetitive tasks; indeed, our community has witnessed a 6% decline in these positions.
Significant negative implications stem from this shift: increased unemployment and a workforce skills gap are among them; therefore, it’s imperative that businesses and governments proactively tackle these challenges through deliberate policy-making and robust support systems.”
If businesses don’t implement policies and support systems to protect those affected by AI in the short term, then certain local economies are likely to collapse just as fast.
How to adopt AI ethically: trust, transparency, and responsible policies
Founders also face the challenge of adopting AI ethically while using it in their workflows.
For example, a lack of transparency with generative models creating content can lead to a loss of trust between brands and customers.
“Responsible AI means calling it out as it is. I’m already tired of the number of companies trying to palm off second-rate content as their own when it’s so obviously composed by AI.
There have been multiple A/B tests for AI/Human written content, and the brains are outperforming the bots time and time again.
I understand that some SMBs don’t have the budgets to hire the writers, but they at least need to put the effort into editing AI-penned work, and they certainly need to let their readers know it’s been composed by AI—otherwise, it’s just deceit, and they’ll lose trust because of it.”
But ethical AI adoption isn’t just a one-time thing. Greggory Elias reminds us how regular audits are key to keeping AI decisions unbiased:
“Businesses must conduct frequent audits of their AI systems to identify and rectify any biases, especially in critical areas like healthcare, legal, or financial services.
This ensures that AI decisions are fair and equitable across all user groups.”
AI case study: European news aggregator NITL streamlines summaries with the help of AI
NITL is on a mission to reinvent the way we consume news. They take news articles from over 500 sources and summarize them for their mobile app, making it easy for readers to stay informed and on the go.
However, summarization posed a unique challenge. Next to taking up tons of hours of time from their editors, and trying to abide by EU regulations meant prohibited use of more than eight words in a row from news sources or they’d fringe on copyright laws.
They worked with Skim AI, whose founder we worked with on this article, in order to streamline this time-consuming and risky process.
Skim’s AI advisory and development service built a custom AI tool to automate news summarization per EU regulations.
This custom-built AI streamlined operations and made the process more efficient while guaranteeing a smoother reading experience.
This freed up time for their editorial team to focus their efforts elsewhere while safeguarding the company’s compliance with EU copyright laws.
Navigating AI disruption: 4 expert strategies for SMBs to thrive with AI
Whether you’re ready or not, it’s safe to say that AI is here to stay. Not only that, but it’s evolving at a rapid pace.
Amidst these changes, it’s crucial for managers to have strategies to draw on.
Here’s what industry leaders say about surviving AI disruption.
Ensure your chosen AI model aligns with broader business goals
Even with its range of benefits, AI is just one piece of the puzzle in your organization’s mission.
When looking to adopt the right model, managers should always have the big picture front and center.
The million-dollar question: how would an AI tool best help our organization fulfill its overarching objective?
Greggory Elias emphasizes how to adopt AI seamlessly into your business strategy:
“Ensure that the initial AI implementation aligns with a broader, company-wide strategy. This approach ensures that solving one problem sets the stage for addressing others.
For instance, a healthcare clinic using AI for patient appointment scheduling can later extend this to patient follow-up and treatment adherence, as the data becomes more refined and comprehensive.”
– Greggory
Invest in services AI can’t provide
It’s true that many SMBs and enterprises are flocking to use AI for providing services once completed by humans.
While that arguably works for repetitive tasks, machine learning isn’t the best basis for your service offerings.
In a world where most businesses are using algorithms, human services become a rarity, and that rarity becomes differentiation.
Brands that stand out in a world of AI will be those that put humans at the forefront of their identities.
Ray Slater Berry emphasizes the importance of finding and offering services best done by humans:
“Service provider companies will need to keep challenging and offering human services that AI can’t do (well) if they hope to keep winning client buy-in.
Don’t try to replace your offering with AI, because if an AI tool can do it, anyone can. I’d suggest you replace your behind-the-scenes, cumbersome processes with AI rather than taking your AI front of house.
Look at how you can optimize operations and save costs there. You can then take that money you save and re-invest it in your humans.”
– Ray Slater Berry
Implement reskilling and upskilling initiatives fast
One of the most important strategies for SMBs to thrive is taking the reins with upskilling and reskilling employees.
As more companies adopt AI into their workflows, SMB decision-makers have an increasingly bigger role to play in their employees’ career development.
To facilitate smooth integration, management will need to double down on providing training to their employees quickly.
Derek Bruce emphasizes the importance of giving employees the resources necessary for upskilling while creating a space for experimentation:
“Our survival strategy in the face of AI disruption emphasizes reskilling initiatives: we have forged partnerships with educational institutions to offer our employees relevant courses and certifications.
Moreover, we promote a culture of innovation—creating a safe space for experimentation where employees can delve into AI applications free from the fear of failure.”
– Derek
Adoption, within reason
While AI can definitely boost efficiency in the long term, avoid making large leaps when integrating AI into your workflow.
Look for minor areas for improvement for a controlled approach. Gradually rolling out AI makes it easy to adopt for employees while posing less of a financial risk too.
Marshal Davis, President of Ascendly Marketing, notes the win-win of implementing AI in smaller stages:
“Implement AI in stages, focusing on areas that will yield the most immediate benefits.
This gradual approach allows businesses to manage costs effectively while still reaping the advantages of AI integration.”
What’s next for AI? Mitigating disruption and embracing change
Job disruption, automation, and efficiency are some of the things that come to mind when discussing AI.
For SMBs, AI is an opportunity to streamline workflows, increase productivity, and cut down on costs.
For employees, it entails extensive reskilling and even more role displacement than we’ve been seeing so far.
Lyn Collanto forecasts that AI will become an integral part of every SMB’s development strategy because of its benefits for customers:
“AI will become a competitive necessity for SMBs through dramatically enhanced capabilities and customer expectations setting new bars.
The most forward-looking teams will experiment today with supportive augmented workflows while readying strategies for ongoing reskilling, AI transparency, and organizational change management.”
As AI becomes increasingly prominent, both businesses and affected employees will need to adapt.
What’s yet to come will be a new age of agile businesses, and it’s up to leaders like yourself to keep up, lead the way, or get left behind.
