The year of productivity: Reinventing with gen AI

As we emerge from three tumultuous years of what was fundamentally a global reset, we’re starting the new year with a more positive outlook. Although disruption continues to increase – up 33% year over year, according to Accenture’s annual Pulse of Change Index – the global economy is stronger than expected given the headwinds at play in the past year. And productivity was up 5.2% in the third quarter of 2023, the highest rate increase since third quarter 2020, according to the latest U.S. Bureau of Labor Statistics report.

Most importantly, we’re stronger today than in 2020 and ‘21 when the pandemic forced us to push the boundaries of technology and reinvent our ways of working. Although macroeconomic forces continue to challenge business leaders, we now have the technology and tools to manage through volatility. Rapid advances in technology including generative AI have changed the game, enabling companies to increase productivity and drive growth in ways that weren’t possible in the past.

As my colleague, Chief Technology and Innovation Officer Paul Daugherty, shared at CES recently, this is a moment of reinvention. Our new Tech Vision research report notes: “In the coming years, businesses will have an increasingly powerful array of technologies at their disposal that will open new pathways to unleash greater human potential, productivity and creativity.” The question is what they will do with it.

A small group of companies (9%) is leading the way, reinventing work, reshaping their workforce and preparing workers for the generative AI world. These “reinventors” are twice as likely to achieve productivity gains of 20% of more in the next three years, according to Accenture’s Reinvention in the age of generative AI report.

CXOs must view everything they do through a productivity lens and focus rigorously on creating value for customers, employees, society and other stakeholders. Technology, in the form of AI, for example, is a key part of the productivity puzzle. But without the right data structures, reimagined operating models and new skills – underpinned by responsibility, fairness and accountability – it’s not going to solve anything.

What do we mean by productivity?

Simply put, productivity measures outputs – the amount of goods and services produced – compared to the inputs used to produce those goods and services. Productivity isn’t just about lowering costs. It is about increasing capacity, improving effectiveness and creating focus.

To be clear, higher productivity doesn’t just happen, it requires commitment. But the upside can be immense, driving growth for the long term. That’s in stark contrast to massive cost take-out programs which may create a short-term bounce but don’t affect the fundamental changes to business and operating models that are vital to make a sustainable difference to the business’s future.

Beyond technology

Productivity is also not just about technology. It’s about adopting a reinvention mindset and culture. And it’s about people. The challenge for business leaders today is identifying how and where technology and people can come together to create the most value and contribute to enterprise growth for the long-term. Here are the three moves leaders need to make now to get a strong start this year:

1. Take stock. Before making new investments in technology, first look at whether you’re getting the most of past investments and using existing technology to its fullest potential. Is your business truly realizing the productivity gains it should from your investments over the past few years? Many companies are using new technology in the same old ways of working, limiting its potential. Consider whether you are using your investments in cloud, AI, data, platforms, digital twins, connected factories and more, to operate differently not just incrementally more efficiently.
   
   
2. Re/set priorities. Competition is intense. Change is lightning fast. And disruption is the status quo. Are you building the competencies it will take to flourish tomorrow? Competing requires investing in the sharp edges. Prioritize building the capabilities you need to compete in the businesses you envision in the future. Shape the organization and workers of the future to support those capabilities. Realizing reinvention is not a one-size-fits-all model, be realistic about the organization’s appetite and capacity for change. Some companies take an enterprise-wide approach to reinvention. Others are more surgical, deploying new technology in specific areas where they have the greatest need or highest potential.

3. Reimagine talent and tech. While the headlines are dominated by predictions of AI replacing workers, technology alone doesn’t cut it. Our research shows that a 2.8x productivity premium for companies that have the right mix of data and tech and put people at the center. Some companies are ahead of the curve, driving maximum returns by using tech strategically to augment and amplify – vs. replace – their people.

Seize the new year as an opportunity to reinvent and go beyond cost cutting to weather economic storms. In my next post in this series, I’ll take a closer look at how companies are driving growth and competitiveness with tech-powered productivity.