Gus Carlson is a columnist for the Globe and Mail newspaper based in the United States.
If you’re an expert on the quarterly earnings reports that are a staple of publicly traded companies, you’ll be familiar with the time-honored metrics and key performance indicators that CEOs and CFOs use to reflect the relative health of their companies. You probably know that.
If you’re an avid consumer of goodies like EPS, ROIC, and EBITDA, you may have already had a taste of the newest metric on the Investor Relations menu: AIM (Artificial Intelligence Maturity).
Since the release of ChatGPT, a form of generative AI, in November 2022, mentions of the technology in corporate earnings calls have skyrocketed, according to a new Accenture report..
More has been said about AI 30,000 times The number of calls in the third quarter of 2023 increased from just 500 in the first quarter of 2022, according to the company’s Technology Vision 2024 report. The number of companies talking about AI on the phone increased from 1,625 in Q1 2022 to 2,247 in Q3 2023. This result is not anecdotal. Accenture analyzed his more than 70,000 S&P global earnings records across 10,452 companies from January 2022 to September 2023.
This topic is not surprising. The promise of AI to improve productivity by streamlining processes and reducing costs, including human costs, has finance executives drooling, while investor relations executives are trying to convince investors that AI will increase productivity by streamlining processes and reducing costs, including human costs. I am determined to tell a certain story. Almost 40% of CFOs surveyed expect generative AI chatbots to significantly change business processes over the next three years.
Of course, Accenture makes a living by helping companies transform, so there is a predictable self-interest in focusing on the AI revolution. But the company has published a number of reports that capture the mindset of leaders preparing for the AI tsunami.
The trajectory of companies on the path to AI maturity is compelling. Another Accenture study found that the share of revenue attributable to AI in enterprises more than doubled between 2018 and 2021, and is expected to nearly triple this year.
According to Accenture, before the pandemic, companies that adopted AI as a strategic imperative reported an average of 50% higher revenue growth compared to their peers. And in 2021, executives who discussed AI on earnings calls were 40 percent more likely to see their company’s stock rise, up from 23 percent in 2018.
This insight aligns with other snapshots of AI’s increasingly influential role in corporate performance. According to a FactSet study, more S&P 500 companies mentioned AI in their second-quarter 2023 earnings calls than companies that did not mention the technology, even excluding the so-called Magnificent Seven leaders. showed good average stock performance in the previous month – Alphabet GOOGL-Q, Amazon AMZN-Q, Apple AAPL-Q, Meta Platform META-Q, Microsoft MSFT-Q, Nvidia NVDA-Q, and Tesla. TSLA-Q.
As with any transformation, there are challenges here. While most business leaders are excited about the long-term potential of AI, many are concerned about their ability to quickly transform their infrastructure and business processes to take advantage of the technology’s full potential. There are many companies that do.
From an HR perspective, the financial industry’s enthusiasm for AI’s ability to improve productivity shows that what’s good for the goose isn’t necessarily good for the goose.
Accenture research on the impact of AI on the workforce shows a significant trust gap between leaders and employees. Although most workers see value in working with artificial intelligence, more than half are concerned about job loss, stress, and burnout. Furthermore, almost 60% of employees are concerned that AI will eliminate their jobs, while only a third of executives say their employees are concerned about job loss. He is less than 1.
The gap is beyond recognition. Although the majority of employees want to learn Gen AI skills, organizations are not prioritizing this and only 5% provide training.
There is some hope for humans. Companies leading the AI transformation are setting an example for newcomers by investing in skill mapping and data integration to ensure both their workforce and their business grow.
Of course, creating an agile workforce that can adapt to such large-scale transformation must start at the highest levels of an organization. Accenture is pragmatic about the difficult challenges of aligning business performance with human weaknesses. “For leaders to be successful in bringing about such significant change in their organizations, they must ensure that their work is effective, not just in what they do, but how they do it.” Guys. “
Ordinary people with AI in their sights can only hope that C-suite leaders are as hungry to do good with AI as they are to do well on financial statements.