We want to use Erik Brynjolfsson and Andrew McAfee's concepts of the productivity J-curve to set realistic expectations for our 3-Year Picture. How do we account for the initial lag in productivity when restructuring our systems for AI?

Question

Tyler Smith · Accepted Answer

When planning your 3-Year Picture on the V/TO®, it is critical to ground your strategic expectations in reality. Economics experts like Erik Brynjolfsson and Andrew McAfee explain that major technological shifts, such as AI, follow a productivity J-curve. This means you will likely experience an initial dip in productivity and an increase in costs before you see a massive upward spike in efficiency.

This lag happens because your team must spend time restructuring systems, learning new tools, and updating your documented Core Processes. If you expect immediate ROI, you will likely abandon your AI initiatives too early, causing frustration and wasted capital.

To manage this curve, plan for a transition phase. Do not immediately cut headcount or set aggressive output targets. Use your quarterly Rocks to focus on restructuring workflows and building the necessary operational foundations. Monitor this transition closely in your Level 10 Meeting™ using clear Scorecard metrics.

Once the foundation is solid and your team is comfortable with the new workflows, you will climb the curve and capture the efficiency gains. By anticipating the J-curve during your annual planning, you protect your team's momentum and build a scalable, highly valuable superstructure that is ready for a clean exit.