Enterprise AI gains depend on changing workflows

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 17:32

   Forgetting about aggregate economic productivity for a second, going back to what you said about employees and white-collar businesses having and using these AI subscriptions, why haven't we seen power law distributions start to form within companies or within sectors where some employees or some firms who are effectively leveraging AI are becoming massively more productive than others that are not. I think maybe we're seeing this a little bit in software, but not really in any other industries from what I can tell. And even in software, it's not as pronounced as what I would expect. Yeah, I think it's two things.

2. 18:13

   Partly, we are sort of starting to see some of this power law at the individual level within companies um it's just that that doesn't necessarily translate into a huge aggregate advantage let's say for that employee um another thing is i'm starting to get suspicious that uh many employees are just simply absorbing the productivity improvements themselves and just like not passing that on so to speak to their company itself working less yes basically i think that's definitely the case in some companies i think nathan calvin had a tweet on this he was like um short form video like time spent watching short form video has increased yeah yeah because like Americans, when they have to work less, they're just spending more time doing TikTok.

3. 18:53

   Yes, yeah. And then the final reason, I think, is just, I think, Shyam Sankar had a recent tweet where he put it quite well that the atomic unit of productivity in a large enterprise is not really the individual. It's sort of the workflow level. And so if you improve one individual on a team's productivity by 10x, then that doesn't necessarily mean that the overall output of that team improves a ton, Even if you have somebody at the head of the power law in your team, that doesn't necessarily improve things unless you can do some amount of reconfiguration of the work that you're doing or some change management within the enterprise.

4. 19:24

   And so I speak to a lot of people who are doing forward deploy engineering, doing AI transformation projects in enterprise, and they all basically give me the take that this diffusion is kind of bottleneck on change management and getting people to accept different ways of doing organizational processes and work processes. and to me like this is an area where I guess I am more of a capabilities maxi because it just seems so easy and so intuitive to me like you set the thing up literally by opening a new tab in your browser and you use the thing literally by telling it what to do and it's so simple it's not like you have to learn how to use you know some complicated new piece of software like Photoshop or even an Excel.

5. 20:04

   It's literally just you have a little virtual coworker that you can talk to and get to do things for you. And anybody with a credit card can have access to frontier intelligence that all but a few thousand people at the labs have access to. Like, it's just so crazy to me that there isn't much more and much faster diffusion. Like, it's not like you have to build out a whole new network of, like, fiber optics or something.

6. 20:29

   Yeah, yeah. I mean, I think it is still in some ways overrated, like that you don't need to do much education or training or whatever to get the average white-collar worker to use AI effectively. It sort of reminds me of kind of teaching my grandma to use Google back in the day. It's like, here is the search box where you should, in favor, be able to just type in anything you want to know and get a link to the answer.

7. 20:52

   and yet it requires some familiarity and some reps and some training of some form in many cases or it did in certain the 2000s when enterprise were adopting the internet technologies for the first time in order to really get large productivity increases from that. And so I think this is partly what the job of the FTE is is firstly helping people inside the company to figure out how to use the thing and then secondly, figure out what are the organizational blockers to doing that and figure out ways to route around those.

8. 21:22

   And often that may involve kind of strange things like, oh, some middle manager has some internal politics reason to keep this data siloed, so the FTE needs to go around him to the skip-level manager and persuade him to do it. There's just like a ton of internal politics which blocks diffusion in that way, at least. Right.