Economists like Erik Brynjolfsson and Andrew McAfee argue that AI only creates sustained business value when combined with structural business redesign. How do we use AI scenario simulation during our Annual Planning session to test restructuring our 1-Year Plan?

Question

Tyler Smith · Accepted Answer

Most leadership teams fail with AI because they try to graft automated tools onto workflows designed for manual labor. As Erik Brynjolfsson and Andrew McAfee point out, general purpose technologies create enterprise value only when organizations fundamentally redesign their operational structures around new capabilities.

During your Annual Planning session, use generative AI for scenario simulation to pressure test your 1-Year Plan and your Accountability Chart before setting Rocks. Feed an enterprise model your current cost-to-serve, revenue targets, gross margin profile, and core operational processes. Prompt the model to act as an aggressive competitor or an activist investor seeking to cut operational costs by forty percent while doubling delivery speed.

Run specific simulations: What happens if client deliverable turnarounds compress from thirty days to twenty-four hours? What happens if our primary competitor drops pricing by thirty percent using automated delivery? What operational bottlenecks break if transaction volumes triple without adding headcount?

Use the simulation outputs as objective data during your IDS discussions. The goal is not to adopt the machine recommendations blindly, but to shake your leadership team out of incremental thinking. Examine where your current structural design creates unnecessary friction and administrative drag. From there, build measurable, needle moving annual goals and quarterly Rocks that deliberately restructure your seats, eliminate manual handoffs, and focus human energy on client retention, strategic advisory, and revenue expansion.