NYT Bestseller Lays Out How SMBs Can Use AI for Competitive Advantage Today

AI is changing the world of work faster than anyone anticipated. Dan Schawbel discusses the advantages and pitfalls of applying AI to your small business.

The AI age is here. 

"And it's transforming the nature of work at a speed that's unlike anything I've seen in my entire career," says Dan Schawbel^[1], New York Times bestselling author and the Managing Partner of Workplace Intelligence, a thought leadership and research agency focused on the world of work. 

We spoke with Schawbel to discuss how AI has the potential to drive major improvements in efficiency and productivity for small and midsize businesses (SMBs). However, Schawbel also warns of pitfalls that SMBs must take care to avoid. If businesses don't start planning their AI strategies now, they could shortly find themselves at a significant disadvantage amongst their competitors.

Big companies are already mastering AI

Companies of all sizes are already seizing the advantages of AI.

Take Walmart, for example. The retail giant has said it aims for 65% of its stores to be automated by 2026. A top priority for the company is to use AI to automatically negotiate best prices with its suppliers^[2]—many of which are SMBs—with little to no human intervention. 

Imagine what this could mean for SMBs. They'll be sitting at the negotiation table with a highly intelligent, extremely well-informed machine. This machine will have immediate access to a massive amount of data, including the historical fluctuating prices of raw goods, economic projections, knowledge of pending supply-chain shortages, and predictive analytics that give insight into what its customers are likely to buy in the coming months. This information could push SMBs into a cost corner where they are forced to give Walmart rock-bottom prices for the goods it puts on its retail shelves.

McDonald's is testing out an AI robot-driven restaurant in Texas.^[3] Amazon has opened stores where customers don't have to check out—the store automatically charges their cards with what they have in their shopping bags when they walk out the doors. 

"After McDonald's and Amazon perfect these AI trials, they will turn around and do it at scale. All over Texas, all over the country, all over the world," says Schawbel. "And, all competitors small and large will follow suit—in these and other industries. They'll have to in order to stay in the game. This will put a lot of pressure on SMBs."

Small, independent pharmacies are already feeling the pressure, as larger chains such as CVS and Walgreens start to replace pharmacists with robots and other automated systems. 

"That is an example of what will happen everywhere," says Schawbel. "This is truly transformative."

So, how can SMBs hope to compete in such a scenario? Only through using AI themselves.

What should SMBs do right now?

SMBs must jump in—fast. One small company with 120 employees just bought licenses to ChatGPT Pro for each of its workers. "That company is making a financial commitment to AI as well as an investment in its employees to make each individual worker better and more relevant," says Schawbel. 

If your business is growing, instead of hiring your next 100 employees, consider upskilling your workers with the new AI tools so they can scale their skills to meet your needs without adding headcount.

Schawbel supports making employees part of the AI exploration and implementation process.

"Especially in today's world, the voice of the employee continues to get not only louder but more relevant,"

Dan Schawbel

Workplace futurist & bestselling author

Give employees new tools and listen to what they have to say. What's their comfort level? How do they envision working smarter? What tools might they be using outside of the office that could be applied to your business? What do they see as the best AI use cases? That is all valuable data that can be used for better decision-making.

The business mentioned above encouraged all employees to take time out of their jobs to "play" with the tool, get to know it, and become familiar with its capabilities. The company hopes that this will spark ideas for greater efficiency and productivity. But its leaders believe passionately this has to be a bottom-up, rather than top-down approach, with ideas for automation coming from the business' front line workers. 

It's also important to establish a strong professional network of other small business owners. 

"Networking has always been important," says Schawbel. "But I do think the speed at which AI is growing and the uncertainty of the future makes discussing AI with other business leaders more important than ever."

Traditional software and good business practices still matter

All this doesn't mean that SMBs shouldn't continue investing in traditional software, particularly cloud-based solutions for basic functions like accounting, finance, and marketing, as well as front- and back-office automation. Increasingly, such software will have AI built into it, to make it more powerful and easier to use.

According to Schawbel, such software investments can benefit small businesses. For example, a robust customer relationship management (CRM) system automates essential aspects of sales and marketing, giving SMBs more transparency into who their customers are and what they want. Building a rich CRM database of customer data is also a terrific preparation for using AI in the near future to analyze the data and come up with new and fresh market insights.

Interestingly, when asked what technology mistakes he made in his small business, Schawbel says he would have focused more on maintaining a "healthier balance" with technology usage. 

"I would have set boundaries to avoid over-reliance on the software," says Schawbel. "Instead, I would have spent more time prioritizing human connections, engaging in physical activities, and making time for offline hobbies and interests."

Trying to predict the unpredictable

Schawbel cautions that when planning your AI strategy, keep in mind that this is just the beginning. 

Schawbel's firm recently completed some AI studies with a major Silicon Valley company that attempted to determine which tasks were best done by humans, and which by machines. "We wanted to see how we could form a partnership between humans and machines, where everyone benefits and the disadvantages are minimized," Schawbel says. 

What their studies found: Humans are good at understanding and relating to others' feelings; they excel at jobs that require creativity and intuition acquired through work and life histories and experiences. Machines, on the other hand, are theoretically better at tasks that require hyper-personalization, a "judgment-free zone," and that require an employee to be "on" 24/7. 

It's important to recognize these patterns, so businesses can plan for the future. Not incidentally, we might also find that machines—which, after all, are always learning—will become better than humans for the things humans are currently known for. 

"Some of this might make people uncomfortable, but it's happening," says Schawbel. "You can see why I call this truly transformative."

Embrace the next stage of AI

As far as how to handle this "discomfort," Schawbel says small business leaders should forge ahead. Lead by example and demonstrate your own willingness to embrace change. Above all, show enthusiasm for new ideas and initiatives, and be open to feedback and suggestions from your team. 

"By leading in this way," says Schawbel. "You inspire your employees to follow suit and be more receptive to change."