How AI Changes What Delivers Competitive Advantage

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In sports, the faster you are the more likely it is you’ll get to the ball first.

The faster you get the job done at work, the more likely it is you’ll get more work, and get ahead.

Speed delivers competitive advantage.

But AI is changing that.

A year or so ago, I was busy building code so that an AI could provide tailor-made responses based on my data, rather than its general model.

I tried it with clients. It was a bit clunky but worked. I got there early with the idea.

A few days ago, the same task was a one-click job. Add an agent. Job done.

AI is like those moving walkways at an airport. You can sprint along on the ground, but others on the walkway will catch up with you with less effort.

But in a world of low-cost accessible AI, we’re competing with others with the same levels of access, which means no one gets ahead.

If I make something today with AI, you can copy it tomorrow using AI.

The new source of competitive advantage is making things that can’t be copied.

Your relationships. Your experiences. Your reach. Your particular ways of working.

Today, it’s not about getting there first.

It’s getting somewhere that no one else can.

The Problem With Boiling Frogs And Burning Platforms

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Imagine a frog in cold water, and a person on a platform.

We’re told that a frog will jump out of a pan of boiling water, but sit there and cook if the heat is gradually increased.

We’re also told that people need to be on a burning platform before they will change their minds.

Both these theories, while vivid, aren’t much help in the real world.

A frog, I hear, will simply jump out if it gets uncomfortable.

And most people will avoid getting on a platform in the first place, or get off it as soon as possible if there is a problem.

In the real world, people don’t stand around waiting for the world to happen to them.

They’re usually taking some action – moving somewhere else, reframing the narrative, finding an excuse, coming up with a new idea.

Real-world change deals with dynamic, ever changing situations, not static systems.

A better approach is to imagine someone purposefully moving towards their particular vision of the future.

What matters is asking whether they’re heading in the right direction.

If not, then what course should they follow instead?

Focus On Sales And Engineering, Rather Than Innovation And Marketing

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AI is changing how we structure businesses to create value.

Drucker focused on marketing and innovation, but I think we’re in a time where that’s not sharp enough.

We need to move closer to sales or engineering.

For example, wth any service there’s an overhead in training the teams that need to do the work.

There’s documentation, guidance, step through videos.

In the past, I’d set up systems of work that ran to several pages. It took us weeks to set everything up and then run training programmes.

Now, you can record yourself talking through what needs to be done with teams. Gen AI can create guidance documents from that transcript that are 90% there. We can use text to voice and add screencasts to create training videos.

It now takes a few days to put something together.

One model of an organisation is a small core, surrounded by a large bureaucracy, which in turn is surrounded by a marketing layer.

Gen AI tools shrink the bureaucratic middle, bringing sales and engineering closer together.

Pick A Tool – Then Get Good At Using It

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It’s not the tool you select that matters, it’s how you use it in practice.

Creative people think a lot about tools.

And I think service and process designers do creative work, because we’re interested in making useful things.

But, to make useful things we have to understand what our clients really need.

The literature is full of different methods to do this. Workshops, questionnaires, prompts and facilitation techniques.

The thing we eventually learn is that there isn’t any one perfect technique that will work for everyone.

Taking writing, for example. Some people write on a computer, others draft longhand, some write from start to finish, others in pieces that they put together later.

What matters is not how you write, but what you produce – the thing that you ship.

You can write with a crayon on tissue paper as long as you produce the words.

Don’t look for a perfect tool. Pick the one that works for you.

And then get really good at using it.

Quality In Knowledge Work

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Five years ago I reluctantly took my books on quality to a charity shop to make space during a renovation.

They were designed to help teams improve physical processes – but I needed to know how to fix knowledge processes.

While physical problems show up in inventory and rework, knowledge problems hide until you see someone burn out.

I have lost count of the number of people who tell me they work in jobs moving information from one place to another using inefficient systems riddled with errors – and who put pressure on themselves to get things right in a system that’s wrong.

And the problem is usually the system – not the people.

Take sustainability data reporting, for example.

It’s a simple task. Find source information on what you’re doing that has a carbon impact, roll it up and report to an auditable standard.

That doesn’t mean it’s easy.

There are a number of steps to follow. But if there’s a gap, if a step is missing or broken, it stops you advancing.

Asking people to work harder won’t fix things.

Quality in this kind of system is a two-way process.

First, you have to move the information from where it is to where it needs to be, without messing up.

Then you have to be able to trace it back to where it came from – so that it’s auditable.

And because every situation and company is different you need a flexible and adaptable approach rather than a single system and way of doing things.

Quality in a physical process is about doing things the same way – reducing variation.

Quality in knowledge work is about building systems to do things the right way – that are appropriate for the complexity of the situation you’re trying to handle.

And I knew that needed different books and techniques.

The 3P Model: Power, Purpose and Process

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We have to focus on what matters most for the level at which we’re operating.

Power gives leaders leverage.

They negotiate and bargain with each other to secure power and resources for what they wish to achieve.

Process makes the difference when it comes to delivery.

The job is to constantly improve how the work is done.

Purpose connects power to process.

The job of the managers in the middle is to get things aligned – to take purposeful action.

Deciding what to do, how to do it, and what resources are needed.

Power sets the course. Process delivers the power.

Purpose ensures that we’re doing the right things in the right way, for the right reasons.

Try Not To Be Misunderstood

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The problem with communication is not about being understood – it’s about not being misunderstood.

Ten years ago, I set myself a goal to write a million words to throw away.

The plan was to think, write and publish. Day after day. Get the stuff out, hit the target.

It was written to help me write – not to help a reader read.

It’s easy to write. But it’s also easy to be misunderstood.

Being in the same room doesn’t mean we’re having the same conversation.

The same pattern shows up elsewhere.

Software projects fail because teams interpret requirements differently.

Employees become misaligned when expectations are unclear.

Strategies fail because people leave meetings with different understandings of what was agreed.

Getting on the same page is the easiest thing to overlook – and the thing most likely to cause problems later.

Alignment comes from a shared understanding of what good looks like.

Flexibility Vs Focus In Consultancies

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Building a consultancy is about focus. Being a consultant is about flexibility.

Every service business faces a tension between solving client problems and delivering a standardised service.

We can resolve this tension – by recognising the difference between what we do as consultants and what we design as service creators.

For example, in our previous businesses, we’d listen to clients, see what they needed and create new services to help them.

Energy contracting. Bill validation. New connections. Demand Response. Water services. There was an endless list of problems that clients needed sorting.

As a consultant, this was interesting work.

But it was hard to scale, forced us to spread resources, and was sometimes unprofitable.

In our current business we focus on one thing. Turning messy, real-world data into structured data that can be used for reporting and decision making.

We work with partners who focus on value streams that they’re good at.

And together we do a better job than if we tried to do the whole thing ourselves.

This is what we should recognise – consultants discover problems, but businesses deliver solutions.

Flexibility helps you learn.

Focus helps you scale.

The Value Equation In Sustainability

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Sustainability should create value. But that’s not guaranteed.

If you remember the pandemic days, companies claiming to be sustainable were the new hot thing.

You had ESG focused funds popping up everywhere – with the pitch that a portfolio built from sustainable firms would have alpha – outperforming the market.

I was sceptical.

Here’s my logic. The low-risk default is always to buy the index – a low cost tracker that buys companies in proportion to their market cap.

If sustainable companies really can do better, then they will form a larger part of the index, and you’ll benefit from their success by owning the tracker.

You don’t need to pick them because you think (hope) they’ll do better.

And in the subsequent years, they didn’t.

The Russia-Ukraine war turbocharged oil stocks in 2022. AI came along and lit a fire under the tech sector from 2023.

A sustainability thesis alone would not have captured either trend. And it’s probably worth noting that both booms are the opposite of what sustainability advocates would want.

We’re a long way from the euphoria now and a sustainability program in 2026 has to be hyper-focused on value.

If not, it has a tendency to create waste. Extra resources. Unnecessary complexity. Added reporting burdens.

A good place to start is with an old question that applies to every investment.

How does every pound going into your sustainability program add £3 in business value for the firm?

Fix Your Systems Rather Than Blaming Your People

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Everything is working exactly as designed. And that’s the problem.

Think of your operations right now. The activities, the processes, the systems.

They’re working exactly as designed to produce the outcomes you’re seeing today.

We have a problem when the outcomes we get aren’t the outcomes we want.

And fixing such problems takes more than willpower. We need to fix our systems instead.

As James Clear wrote in Atomic Habits, “You do not rise to the level of your goals. You fall to the level of your systems.”

Or, as Stafford Beer wrote, “The purpose of a system is what it does”.

That’s why the most effective organisations focus on systemic improvement rather than just pushing people harder.

To adapt Scott Adam’s words from “The Joy of Work”:

People who make systems work get happy and rich.

People who work hard get tired.