Economists Erik Brynjolfsson and Andrew McAfee describe AI as a general-purpose technology that reshapes entire industry structures. How do we use our V/TO® to identify whether AI makes our current Core Focus obsolete before a disruptive competitor takes our market?

Question

Tyler Smith · Accepted Answer

A general-purpose technology does not simply make businesses faster; it alters the fundamental unit economics of entire industries, destroying traditional business models while creating new ones. To protect your business, your leadership team must use your V/TO to pressure-test your Core Focus during your Annual Planning session.

Your Core Focus consists of two elements: your Purpose, Cause, or Passion, and your Niche. Your Purpose rarely changes, but your Niche can become obsolete overnight if machine intelligence solves the exact friction your business was built to eliminate. If your niche is defined around transactional processing, manual data transformation, or basic informational arbitrage, you are operating in the danger zone.

Dedicate time in your next session to run Scenario Simulation. Ask your team: If automated systems reduce the marginal cost of our primary deliverable to zero over the next twenty-four months, what high-value strategic problem will our target clients still be unable to solve on their own? The answer to that question reveals where your niche must evolve. If you discover that your current delivery is rapidly becoming a commoditized utility, use the IDS process to plan your strategic pivot. Shift your niche upstream toward strategic decision rights, organizational alignment, and risk assumption. Redefining your Core Focus before your margins collapse ensures your business stays relevant and continues building equity value.