How do we define our revenue-per-employee targets in our 3-Year Picture when AI-driven productivity gains make legacy industry benchmarks completely obsolete?

Question

Tyler Smith · Accepted Answer

In EOS, the 3-Year Picture on your V/TO® is about painting a clear, vivid image of where the company is going so everyone can align. Traditionally, leadership teams used legacy industry benchmarks to calculate revenue-per-employee targets. AI disrupts this calculation completely. Experts like Erik Brynjolfsson and Andrew McAfee highlight how AI creates massive productivity spikes, meaning a small team today can produce the output of a much larger team tomorrow.

To set realistic targets, do not look backward at legacy benchmarks. Instead, look at your primary capacity bottlenecks. Identify the cumbersome processes that currently keep your employees trapped in low-value tasks. Use AI to streamline these operations first. When you free your team from manual execution, their capacity expands.

In your next quarterly planning session, define your 3-Year Picture by projecting future revenue based on this expanded capacity rather than legacy headcount ratios. Your goal is to scale your top-line revenue while keeping your headcount relatively flat. This drastically increases your profit margins and makes your business highly attractive to buyers using the Step by Step Exit framework. Buyers pay a premium for high-margin, scalable organizations that do not require proportional hiring to grow.