The 2024 SME Conference “Unleashing the Potential of AI for Business Growth” highlighted numerous AI tools and business use case. Despite their seeming ease of use, AI adoption at present largely remains limited to individual applications rather than transformative business-wide changes. This blog explores a multi-pronged approach—focusing on education, emotional engagement, and environmental adjustments—to help SMEs overcome these barriers and successfully integrate AI into their business.
“Change Happens at the Rate of Consumption”
Yesterday, I attended the 2024 SME Conference 2024, themed "Unleashing the Power of AI for Business Growth".
The audience was presented with a plethora of AI tools and business use case. The ease of use of these tools were highlighted and emphasised. It seemed like there should be nothing standing in between the tools and its adoption.
However, based on my personal experiences with clients and fellow SMEs, AI adoption is largely confined to application at the individual level versus systematic and transformative change across the entire business.
What is the bottleneck to the change?
Challenges SMEs Face in Adopting AI
To answer this question, we first need to understand the characteristics of Singapore SMEs.
Resource-strapped: Firstly, SMEs typically are resource-strapped. The manpower they have are usually dedicated to running the daily operations. Therefore, they may not have spare capacity to research, explore and potentially implement the AI solution.
A related issue stemming from the lack of bandwidth, is that AI will continue to be shrouded in mystery, and perceived as “complex”, “expensive”, or “too difficult”.
A different mindset for innovation: Secondly, adoption of AI is a form of innovation, which requires a different mindset and approach from running daily operations. Innovation involves exploring new ideas, experimenting, and taking a higher level of risk, whereas daily operations focus on maintaining stability and efficiency. Some SMEs may struggle to have such a mindset because their primary focus is on immediate operational needs and short-term goals.
Lack of organised and reliable data infrastructure: Thirdly, implementing of AI across the business will likely require the business to have clear standard operating procedures (SOPs), and clean data. Some SMEs may not have established comprehensive SOPs or might be dealing with fragmented, inconsistent, or incomplete data. This lack of organized and reliable data infrastructure may make it difficult to integrate AI solutions effectively. This situation often discourages further attempts at implementation, creating a cycle of hesitation and missed opportunities.
How To Break the Bottleneck
Through my experience managing business and technology transformations for MNCs and SMEs, I’ve observed that the adoption of change is heavily dependent on how well individuals internalise it.
This process is akin to “loosening the soil” in the hearts and minds of SMEs, making them more receptive to the idea and eventually embarking on the journey of transforming their business using AI.
Changing hearts and minds requires a multi-pronged approach and a lot of trial and error. I suggest a first-principles framework that SMEs can use to confidently break the AI adoption bottleneck.
“Head” Strategy Using Facts and Logic
The first strategy involves providing information on why change is necessary and what it entails. This focuses on facts and logic, and for simplicity, I call it the “Head” strategy. For example, explaining the importance of adopting AI to ensure business survival and showcasing different possible applications of AI within the business. Sending SME staff for AI training or conferences to increase AI awareness also falls under the “Head” strategy.
“Heart” Strategy Using Emotions
However, facts and logic alone may not suffice to motivate change. Thus, we need the “Heart” strategy, which triggers change by appealing to emotions. An example is role modeling by the leader. Dr. Richard Yen, founder and Managing Director of Ednovation, provided a great example during the conference. During a panel discussion, he shared that he personally completed an online AI course to equip himself with the knowledge, before rally his team to implement AI in the business.
Another powerful emotional lever is fear. Leaders can communicate that AI is here to stay, and failure to adopt it could impact the company's survival and, consequently, the livelihood of its staff.
“Hand” Strategy by Adjusting the Environment
Fundamental transformation can be a long journey, so how can we sustain change through uncertainties? The third strategy involves making change easier by adjusting the environment. Applying the lean experimentation methodology to AI adoption is an effective way. As Mr. Nigel Lee, ISO General Manager of Lenovo, said during the conference, “Think Big, but Start Small.” This involves starting with small, time-bound AI projects with clear targets for each milestone. This approach helps maintain momentum, allows people to see results, and enables iterative adjustments.
Conclusion
The journey to AI adoption for SMEs is paved with perceived bottlenecks, from limited resources to the need for a shift in mindset and the necessity of a robust data infrastructure.
However, by leveraging the "Head" strategy to provide clear, logical reasons for change, the "Heart" strategy to engage and motivate through emotional appeal, and the "Hand" strategy to create an environment conducive to experimentation and growth, SMEs can start to bridge the gap to AI adoption.
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