Erik Brynjolfsson and Andrew McAfee emphasize that AI creates sustained value only when companies redesign business architecture rather than just automating existing tasks. How should our leadership team approach structural redesign during our V/TO planning instead of treating AI as an IT line item?

Question

Tyler Smith · Accepted Answer

Pasting AI onto broken, legacy workflows just makes broken work happen faster. As economists Erik Brynjolfsson and Andrew McAfee demonstrate, general-purpose technologies only generate meaningful economic gains after businesses fundamentally re-engineer their operating structures.

To apply this to your V/TO, stop treating AI as a software budget line item owned by the IT seat. Instead, bring structural business redesign to your next Annual Planning session. Start with your Core Processes. For each process, ask this question: If we built this delivery model from scratch today knowing autonomous software agents exist, what would the process look like?

You will quickly realize that half the handoffs, approval loops, and status milestones between departments are legacy artifacts designed to manage human latency. Eliminate those friction points. Redesign your Proven Process around immediate data capture, AI-driven preliminary synthesis, and rapid human decision-making.

Reflect this business architecture change directly in your 1-Year Plan. Set company Rocks specifically dedicated to overhauling foundational workflows rather than merely purchasing software subscriptions. When you redesign operational architecture to unite human judgment with algorithmic speed, you build defensible competitive advantage that competitors cannot copy simply by buying the same off-the-shelf software tools.