It’s pretty weird, if you haven’t seen it yet. AI-generated “actress” Tilly Norwood is now featured in a film, has been given a persona and personal history, and is out there creeping folks out in interviews (in this one with Piers Morgan, she randomly breaks out into Chinese!).
AI-generated actresses seem far removed from running a business in the CSRA, but in a way, this kind of AI advance should operate as a “heads up” to every business owner. And yeah, I know that you are probably tired of AI-related content popping up everywhere you see it. It’s unlikely you’ve yet seen the promised “revolution” yet in your business (although that may depend on your industry), but Tilly gives some lessons and reminders as we venture closer to significant AI advances that might fundamentally influence the business environment.
Lesson 1: AI May Collapse Operational Scale
One of the most significant effects of AI may not be that it replaces people, but that it makes a small organization capable of doing things that previously required a much larger organization. Producing a professional commercial, creating marketing materials, analyzing information, writing proposals, building presentations, answering questions, researching prospects, or handling routine administrative work has historically required people, time, or both. AI is steadily lowering the cost of all of those things.
That matters for a small business because scale has always been one of the biggest advantages of a large company. The 500-person company could afford departments and specialists that the 15-person company couldn’t. AI won’t eliminate that advantage, but it can narrow the gap. A small company with good people who know how to use AI may increasingly be able to operate with capabilities that would have required a much larger staff just a few years ago.
That’s a tremendous opportunity, but it comes with a catch. If AI makes it easier for your business to do more, it also makes it easier for your competitors to do more. The advantage won’t necessarily go to the business that uses AI to produce the most stuff. It will go to the business that figures out how to use that additional capacity to do something customers actually value.
Lesson 2: Real Social Trust Will Increase in Importance
This may sound like a contradiction. If AI can produce increasingly realistic people, voices, videos and conversations, why wouldn’t that make personal relationships less important?
We think it does the opposite (and we’ve written about this issue repeatedly on this blog).
As it becomes harder to tell whether something was created by a person, produced by a machine, or generated somewhere in between, the things that are difficult to manufacture become more valuable. Reputation is one of those things. So is experience. So is knowing that the person you’re dealing with is actually the person who says they are.
For an SMB, this is potentially a huge advantage. You may not be able to outspend a national competitor on advertising, and you may not have their resources, but you can know your customers. You can have a reputation in the community. Actual people can answer the phone. Your employees can have real experience solving the problems they’re talking about, AND they can know how to interact with people. Note that the “hiccup” that Tilly experienced on the Piers Morgan show isn’t unusual for AI-generated content. It simply hasn’t gotten to the point where it is entirely passable as a human being.
AI can create a fairly convincing testimonial. It can’t create twenty years of customers who will tell somebody that you did what you said you would do. As synthetic content becomes more common, genuine relationships, recognizable people, local reputation and demonstrated experience will become more valuable, not less.
Lesson 3: AI Mastery Will Trump AI Dabblers
There is a big difference between occasionally asking ChatGPT to write an email and actually redesigning the way your business works around AI. The first is using a tool. The second is changing an operation.
That’s an important distinction because most businesses are probably going to go through a period where everyone experiments with AI. Someone writes a proposal with it. Someone creates a spreadsheet. Someone generates a social post. Someone uses an AI meeting assistant. That’s useful, but it doesn’t necessarily create a competitive advantage.
The businesses that really benefit are likely to be the ones that figure out where AI fits into their particular operation. What information should it have access to? What decisions can it help make? What repetitive work can it handle? Where does a human need to stay involved? What processes should be redesigned because AI has changed the economics of doing them?
In other words, don’t just give your employees AI tools and call yourself an AI company. Figure out what you can now do that you couldn’t do before, or what you can now do for $100 that used to cost you $1,000.
Again, as we have said repeatedly, this WILL take time and effort. Some “playing in the sandbox” time will be necessary. At least in foreseeable future, there will be no master agentic AI engine whose “button” you can push to accomplish complicated tasks. A human puppet master is necessary.
Lesson 4: AI Will Complicate Tool Sprawl and Security
Tool sprawl is another side to all of this that business owners shouldn’t overlook.
AI is making it incredibly easy for employees to add new capabilities to their jobs. That’s great until you discover that five people in your company have signed up for five different AI services, two of them have connected those services to company data, somebody uploaded a spreadsheet containing customer information, and nobody is quite sure what happens to that information after it leaves your computer.
We’ve dealt with this problem before. It’s called shadow IT. The difference is that AI tools can be considerably more powerful than the SaaS applications we’ve traditionally worried about, and they can be adopted by employees with almost no involvement from IT.
The answer isn’t to ban AI. That’s probably about as practical as banning email was. The answer is to understand what your employees are using, establish some basic rules about what information can be put into which systems, control access where necessary, and make sure your security practices keep up with the capabilities you’re giving your employees.
The irony is that AI may make good IT management more important, not less. The more powerful your employees’ technology becomes, the more important it is to know what that technology is doing.
The Bottom Line
You don’t need to predict exactly what AI will do to your business. You probably can’t. But you should pay attention when something that seemed impossible a few years ago suddenly becomes weirdly ordinary.
Tilly Norwood isn’t going to run your business. But the technology behind her may change the economics of running one. The businesses that recognize that early, without getting distracted by the hype, will be in a much better position to take advantage of what’s coming.