Quick profit gains vs. customer led growth
RabbitMQ in the age of Gen AI

In our latest article, Seventh State Growth Consultant Martin Shelford explores the impact of GenAI on business stratgies, highlighting the critical role of RabbitMQ in balancing the pursuit of quick profits with sustainable growth…

Amidst a backdrop of considerable technological advancement and the resulting upheaval it continues to have for existing businesses and their teams, an unsettling trend has emerged – the pursuit of quick profit gains through the cutting of jobs. Jobs which, business leaders believe, can and will be better undertaken by Artificial Intelligence (AI).

“Every technological revolution leads to job change, and this (AI) will be no exception … The thing that might be different is the speed with which it can happen.” stated Sam Altman, CEO of OpenAI, one of if not the biggest driver(s) of generative AI.

Perhaps ironically and for the first time in living memory, the sweeping disruption to jobs and industry driven by technology companies is having a direct impact on technology workers themselves. 2023 and the first half of 2024 saw repeated headlines of large scale job cuts, with close to 320,000 people working in tech worldwide laid off according to analysis by Tech Crunch. While a proportion of these are related to economic uncertainty, the public statements issued by CEOs rarely exclude a nod to the impact of AI.

Speaking at an event earlier this year, Jensen Huang, CEO of NVIDIA, posited that “Over the last 10 – 15 years, almost everyone sat on a stage like this would tell you that it is vital that your children learn computer science – everyone should learn how to program … In fact, it is almost exactly the opposite. It is our job to create computing technology such that nobody has to program, and that the programming language is human. Everyone in the world is now a programmer. This is the miracle of AI.”.

The ’Great Reconsideration’: Business is People TECHNOLOGY.

Prior to recent years, businesses and other organisations were, arguably, nothing without people. While the role technology plays has been evolving for decades, both in the creation and delivery of products and services, and in the processes a business depends on to function, technology for most businesses has been more of an enabler than the core element.

This, with the accelerating rise of Generative AI (GenAI), is starting to change. Business going forward, no matter the industry, is about technology.

By way of backing up this claim, recent analysis compiled by MIT Technology Review and Databricks (see fig. 1) showed that GenAI is expected to take on a widespread or critical role in functional operations in 66% of organisations in 2025, vs. 40% in 2022. Of particular note is an increase from 10% to 32% in organisational functions viewing GenAI as ‘critical’. Meanwhile, those organisations who were only experimenting or had limited adoption fell into the minority for the first time (34% vs. 59%). Change is gathering pace.

Fig 1.1: Growth in GenAI adoption (source: MIT Tech Review & Databricks)

While the two functions that, traditionally, place technology at the core of their functions – IT and Supply Chain / Manufacturing – remain the biggest adopters of GenAI, the noticeable increases in widespread or critical adoption in other functions including Sales (+160%), Marketing & Advertising (+156%) and HR (+100%) show the trend that technology, and GenAI in particular, Are now central to the operations and forward investments are every function. (See fig. 2.1 and 2.2)

Fig 2.1 (source: MIT Tech Review & Databricks)

Fig 2.2 (source: MIT Tech Review & Databricks)

Reduced costs and higher sales = growing profits.

Given the statistics recently compiled by McKinsey (see fig. 3.1), it is perhaps unsurprising that adoption of GenAI is rapidly accelerating across all functions.

Bearing in mind that GenAI is still a very new technology and one which will continue to improve in the coming months and years, between 30 – 50% of functions within organisations who have adopted the technology so far report seeing their costs reduce, while between a third and two thirds report increases in revenue.

Fig 3.1 (Source: McKinsey)

The ‘cost’ benefit from this is being realised, in no small part, through mass redundancies, allowing businesses to deliver strong bottom lines and build cash for future investments.

But is there a bigger ‘cost’ to this benefit – one which might translate in mid to long-term revenue and profit declines?

One constant which will remain amidst a sea of change over the coming years and decades is the end customer – the consumer. The reason all businesses exist, and the one group who yield the power to make or break any company.  “There is only one boss. The Customer.” stated Sam Walton, the founder of global retail giant Walmart. “And (they) can fire everybody in the company from the chair(person) down, simply by spending (their) money elsewhere.”.

History is awash with stories of once successful companies inadvertently causing themselves problems through the pursuit of quick profit gains. The promise of new technology and the returns it can bring has driven transformation agendas for decades, often with consumer interests front and centre, but regularly not. 

With the laws of capitalism demanding continued growth and ever improving profits, it’s perhaps not surprising that decisions become heavily influenced by financial return. It’s understandable that, given the complexity that exists in directly translating customer experience into profit, the somewhat easier cost lines on a profit and loss (P&L) statement are targeted instead. The emotional based traits which make the modern human race so progressive, manifesting themselves through innovation, risk taking and tenacity, are the same ones which can cloud judgement and excite leaders at the prospect of delivering greater and greater returns in the near term through the application of the latest technologies. But at what long-term cost?

While it is clear that the recent and expected advances in GenAI really do have the potential to overhaul the way business gets done, the measure of whether this period of change is successful or not cannot be assessed in the near term only. Improving profit lines over the next five years might give investors and leaders the confidence that their application of GenAI is reaping major gains, but it’s the consumers, who vote with their feet and, increasingly, a click of a button, who will be the ultimate judges.

The Choice Organisations Face

Businesses and organisations of all shapes and sizes are increasingly finding themselves at a point of transition. Whether deliberately driven through strategic steps towards GenAI adoption, or forced upon them due to the rapidly evolving world in which we live, data shows that mass adoption of GenAI is not a matter of ‘if’ but ‘when’. 

With this in mind, organisations and the people working within them face a choice of routes:

Route A: They can adopt a stance of denial, viewing the rise of GenAI as merely a fad.

Route B: They can choose to integrate GenAI into their current operations and seek to grow profits through mass cost cutting (i.e., job cuts).

Route C: They can take stock and consider how GenAI might present opportunities to evolve and innovate, and to provide their customers with even better choice, quality and experience.

As with all periods of transition, especially those which occur during industrial revolutions, ill thought through tactics and missteps in execution of change programmes pose significant risks. It’s for this reason that caution and pragmatism should prevail over a rush to capitalise on the technology through excessive cost cutting. 

The question for organisations and their leaders to consider is simple: Does GenAI simply offer ways to make the existing business model more efficient, or might it be the key that unlocks a path towards a much improved or potentially new business model which secures growth and ever-growing profits over the coming decades – multiple X that of the near-term profit gains achieved through route B? 

There’s no question that significant time will be freed up in workforces as GenAI takes over core processes and tasks. The choice organisations face is whether to turn that time into short-term profit gains through mass job cuts, or to invest it into innovation and the improvement of customer experience. It’s customers who will be the judge as to whether a business gets this choice right or not.