artificial intelligence

As Artificial Intelligence (AI) ushers in the era of Industry 5.0, transforming every industry and every size of business, it’s impact will be most keenly felt in the realm of workflow efficiency as businesses adopt AI for productivity. Repetitive tasks, long the domain of human workers, are now being automated by machine learning driving large language learning models (LLMs) and intelligent machines, leading to significant time-savings and quality improvements. From jump-starting marketing and messaging to streamlining customer service to optimizing production lines, AI is revolutionizing how businesses operate. No matter what size of business you have, you  can do more with less and focus on higher-level work by incorporating AI in your technology stack. The result? Cost reductions, increased productivity, and stronger competitive performance.

AI for Marketing

AI can be a powerful tool in your sales and marketing toolbox. So far, much of the discussion about AI … at least in the small  business sector … focuses on AI as a content generator. Given how much has been written on this aspect already, I’m going to focus on other areas of sales and marketing benefits. (edit 2024/4/8: I recently did a short talk on AI for content generation, which you can watch here). 

Lead Generation and Qualification

AI can also transform your lead generation and qualification efforts by transforming vast amounts of data into insights you sales team can quickly put to use. Tools already exist that can crawl blogs, social media posts, and online forums to identify users interested in specific topics. It can analyze demographics and past behavior to further refine lead pools, and it can produce lead scores based on interactions with your website, email, and social media presence. This type of work would take sales and marketing teams an extraordinary amount of time, but AI tools can achieve similar results in days or even hours.

Predictive Analytics for Campaign Development

AI can also help you target marketing  campaigns by moving beyond simple demographics and past behavior. It can analyze massive customer datasets to identify hidden patterns and correlations … connections that only the most skilled and experienced data analysts would otherwise pick up on. AI tools can predict which customers are most likely to churn, which are prime for upselling, and which customers will respond best to specific types of promotions or messages. 

Wouldn’t you love to know which customers were least likely to repurchase before offering a discount? Would you love to know the best time to send a re-engagement communication to a past purchaser? These are things AI can facilitate for you.

Sales Forecasting

Forecasting is always going to be part art, part science, but AI tools can make the science aspect of forecasting much, much (much) more accurate. This is  because AI tools can factor in far more variables than traditional approaches like spreadsheets with human interpreters or even business intelligence (BI) tools like Power BI or Qlik.

AI algorithms can analyze historical sales data, market trends, customer behavior, seasonality, and even external factors like economic indicators, local weather, and local or regional politics. The tools can pinpoint subtle patterns and correlations that untrained (or even skilled) data analysts might miss. Even better? AI tools can also pull in data regarding competitor product launches, industry adoption rates, and your own lead generation data. All this adds up to better prediction of potential sales activities. 

Why do you need this type of forecasting? Because better visibility to future changes in sales will help you eliminate pipeline bottlenecks, get ahead of production opportunities, and rebalance your offerings and inventory to reflect changes in demand. 

Beyond Marketing

But now let’s look beyond sales and marketing, to topics that are being discussed extensively at the Fortune 500 level, but aren’t being given enough attention for small and medium sized businesses … even though the tools for many of the things I’m about to describe are already available and affordable for smaller businesses.

AI for Productivity in Operations and Logistics

AI tools can help you optimize and streamline your inventory, improve demand forecasting (see Sales Forecasting above), and improve your route planning, again, b y analyzing complex data. AI can take the historical sales pattern data you are probably using right now to plan your inventory, provide a more nuanced view of seasonality, add in lead times and external factors like weather and politics to predict what stock is needed and when. All this leads to better inventory and production decision-making.

For route-planning, AI can integrate with your warehouse management system, add in constantly changing real-time factors such as traffic conditions, weather, construction, and delivery time windows, and update routes automatically. 

This is already useful data for large logistics companies like UPS and FedEx. But imagine what it can do for your local delivery team or regional distribution efforts.

Data Analytics

One of the things most small and medium-sized enterprises (SMEs) struggle with is numeracy (edit 2024/4/8: Check out this snippet from my presentation on numeracy in manufacturing). Even though businesses of every size are swimming in vast quantities of data today, very few companies employ … or truly know how to use … sophisticated data analysts.

Even with excellent BI tools, most companies fail to optimize their data insights for better decision-making, because the typical IT, accounting, or even marketing team member doesn’t really know how to structure the data models that will give them better insights.

AI tools can help with this. AI excels at extracting valuable insights from massive datasets. Machine learning algorithms wade through all that data to uncover the patterns, trends, and correlations that help you make better decisions. Even better, AI data tools can convert those insights into effective graphics to help your management team “see” the data similarly and get on the same page.

These tools can also assist with fraud and anomaly detection. By establishing baselines for typical behavior within your data, AI can flag deviations and suspicious activity. 

This same anomaly detection is useful for manufacturers, which can use AI to analyze sensor data from machines, detect subtle anomalies in vibration or temperature patterns, and signal equipment malfunctions before they cause costly breakdowns or isolate quality problems before you throw more labor at them.

Administrative Automation

How much time and money does your company waste in administrative tasks? From duplicative data entry to unnecessary printing to missed opportunities, admin is an area ripe for disruption.

AI accelerates document processing, automates routine tasks, and minimizes the tedium of data entry. Using tools like Optical Character Recognition (OCR), AI-powered tools can extract text from images or PDFs, making them searchable, editable, and indexable. AI can then classify documents based on content, route those documents to the right people or departments, or trigger specific activities.

In email management AI can draft responses to common inquiries and free up time for other, more valuable tasks. It can even interpret the intent of emails to suggest meeting times (and share a meeting link to keep you out of the “what time is good for you” back-and-forth), dropping those meetings right into your calendar for you. 

In data entry you can use AI tools to analyze forms, invoices, or receipts, extract information from them, and directly populate your databases or spreadsheets.

Of course, accessing these AI tools assumes that you have at least begun the work of modernizing your tech stack (need help with that? Book a consult now to find out how StrategyWerx can help). 

Competitiveness in 2024 and beyond will hinge on your ability to automate more of your business processes. We are nowhere near the peak of effectiveness for AI-powered software yet, but the tools you can use to begin this process are already available and affordable. If there’s one thing that SMEs should be thinking about right now, it’s how to automate processes beyond marketing. Implement any one of the ideas in this article, and you’ll increase your competitiveness immediately.

I'm a fan of AI. We use it extensively in our business and help clients implement it. Now for my concern...

We keep talking about AI in terms of AI "freeing up staff to do higher level work." And I agree with that.

But how will we train new people... fresh grads, career switchers, etc.? Entry level jobs have traditionally served to teach people the building-blocks of the work, so they could gradually develop the judgment, context, and pattern recognition required for higher-level decision-making.

If AI takes over the building-block tasks, we risk raising a generation of professionals who are fluent in theory but lack the grounding to apply it effectively (or worse, know how to look up an answer but have no judgement to evaluate it).

How might this show up in real life?

Marketing Strategy Without Campaign Execution: If someone skips ever writing an email sequence, running A/B tests, or optimizing a landing page, they may not understand what makes messaging convert—or how execution timelines, tech constraints, or buyer psychology actually impact strategy.

Financial Analysis Without Bookkeeping Experience: A strategist who’s never reconciled accounts or managed real budgets may misread cash flow dynamics or propose ideas that look good on a spreadsheet but break down in real life.

Without the “lower level” work, professionals won't build the mental models that make higher-level work accurate, nuanced, or actionable. This doesn’t mean we have to cling to outdated workflows. But it does mean we need to be intentional about how we’re building foundational skills if the traditional pathways to expertise disappear.

We can't afford to skip the messy middle. If AI replaces the work that builds judgment, we'll need new ways that help people earn that judgment—not just simulate it. Because high-level thinking without grounded experience is ultimately just guesswork.

I just had a conversation with a client that sounded a lot like conversations I've had with other small business owners. It has to do with misconceptions of what their marketing content is supposed to do (and be).

My team writes content for this client’s website. We publish consistently, building toward a specific goal: content that AI search engines can find, understand, and use to answer the questions people type into ChatGPT or a Google search bar. This is different from the way we used to do content marketing because the rules governing the role of content in marketing have changed in the AI-search era.

But here's what happens on an all-too-frequent basis: The client reads a draft and says something like, "I wouldn't say it that way," or "I don't think all my customers are going to want to read this one." Then she decides she needs to spend some time on it, do some rewriting herself. The marketing becomes burdensome for her, and she ends up paying for services she's not getting the full benefit of, because A) she's redoing the work, and B) the article ends up sitting on her desk, unpublished.

So what is happening here? A few things. First, she knows her business better than anybody, so she's caught up in thinking of all the ways she does things and explains things and the lens through which she sees her business—as an extension of her. She's also judging each piece of content as if it needs to appeal to and hold the attention of a large audience of human readers, all of whom are assessing whether or not the content "sounds like her."  The problem is that her perceived responsibility to be the "Explainer in Chief" is getting in the way of producing both the quality and quantity of content needed to capture attention in today’s very crowded online world. She is not unique in this regard. This tendency runs through every business owner, myself included. You can't invest so much of yourself in such a demanding pursuit as business ownership without a strong sense of, well, ownership.

So I asked her this question:

"Do you insist that every piece of jewelry you consider carrying is something you'd personally love to wear?"

She laughed. "No," she said. "That would be absurd." If she only stocked pieces she'd wear herself, she'd unnecessarily limit her inventory and fail to appeal to people with different tastes from her own.

"Okay," I said. "Do you require that every piece be able to appeal to 90% of your customers in order to stock it?"

No again. If that were the bar, she said, she'd have almost nothing to sell. Her customers want different things: some want bold statement pieces, some want something they can wear to work every day, some are buying a gift for someone else entirely. She plans her inventory around a broad audience and trusts that each piece, even the ones she'd never wear and even the ones only a fraction of her customers would choose, earns its place because it adds up across the whole collection.

"So here's my question," I said. "Why is your marketing content being held to a standard you don't even hold your product to?"

Why does every article on her website need to sound like her own speaking voice to count as legitimate? Why does she expect every single piece to be something the majority of her readers would actually sit down and read? She'd never apply that standard to a necklace, but she is applying it to a paragraph. 

This is a common misconception that’s worth addressing, because it isn't unique to jewelry stores, and it isn't unique to this client. Small business owners consistently hold their marketing content to standards they'd never dream of applying to their actual products or services. And the result is that they write far less than they should, far less often than they should, and they lose ground to competitors who figured out a while ago that this isn't how the marketing game works anymore.

The Rules Have Changed

Unfortunately, this issue isn’t theoretical. It’s urgent. For years, most small businesses built their traffic on some mix of local search and search engine marketing: showing up in Google search results, ranking for the right local terms, getting found when someone typed in "jewelry store (or whatever) near me." Social media played a stronger role for many very small businesses. But whichever channel got the credit, both relied on rules business owners understood: keywords, hashtags, and relentless posting on social media.

Now the rules have changed. Somewhere between 60% and 70% of Google searches now end without anyone clicking through to a website at all, because the answer just shows up on the results page, generated by AI. When an AI-generated answer appears above the search results, that number climbs into the eighties. Businesses across all industries are experiencing measurable declines in visibility and traffic, and it has nothing to do with any changes they made on social media or anywhere else. AI search has shifted the ground under our metaphorical feet.

How big of a deal is this? Research shows that organic click-through rates drop roughly 61% when an AI Overview appears on a search results page, and the zero-click rate for those queries runs 80-83%. So a business that was getting 500 monthly organic views and loses 40% of them to an AI overview is down 200 views per month. On the other hand, businesses that are cited in those AI-generated answers see about 35% more organic clicks and considerably higher conversion rates than those that aren't.

What does that mean for a small business owner who hasn't changed their marketing approach in years? It means that they are suddenly watching leads and foot traffic dwindle, ultimately reducing revenue. The businesses that figure out how to get found by AI search, and figure it out soon, are going to pull ahead of the ones still curating every piece of marketing content as if it were a fireside chat with the owner. The gap between marketers who understand the new dynamics and those who don't is widening every day.

What AI Search is Looking For

So if a search engine isn't judging your content the way a reader would, what is it judging? Two things, mostly: how recently you've published, and how consistently you post new, helpful information. AI search tools have a documented preference for the most current content. On ChatGPT, a large share of the pages it cites most often were updated within the last 30 days. Same with Perplexity and Google's AI-generated answers.

Without any other way to gauge whether the content they are offering is valid, AI engines use recency and frequency as signals of whether a business is still open, active, and worth trusting. A business that posts on a steady schedule is perceived (by the search engines) to be current and reliable. A business that hasn't touched its site since last year gets a question mark. This may not be a fair interpretation of how the business is actually doing, but it's the way the algorithms work. And the algorithms are in charge of your visibility online.

So the goal and purpose of content creation has changed. You're not building the kind of relationship a novelist builds with a reader who comes back book after book. You're demonstrating, on a reliably consistent basis, that you exist, that you're open, and that you have something useful to say in response to the questions your customers ask. 

Of course, frequent publishing only works if what you're posting actually answers real customer questions. A new date stamp on the same old page doesn't fool an AI engine. The content still needs a real answer, written the way your customer would ask the question, in the language they'd actually use to search. So frequency and consistency get you onto the search engine’s radar. But only clear, direct answers get you cited in search results.

Put another way: It doesn’t matter if the answer sounds the way you speak or says the kinds of things you usually say. The only thing that matters is that the questions you answer are questions your customers are likely to ask.

Here's something else important to note: Even when your content does show up at the top of a search result, the majority of people who see your reference will never click through and read your article. Oh, they might skim it. But what they will certainly do is register that you exist, that you're active, and that you're the answer to the question they asked. Then they'll look for your address, your phone number, or your hours. The data support this: visitors who click through from an AI-generated answer become customers at several times the rate of typical search visitors because, by the time they click, they've already made their decision. Your content did its job well before they ever landed on the page.

Change Your Expectations

The jewelry analogy I offered earlier isn't just about letting go of the idea that you must personally approve of every piece of content and produce content that people universally want to read. It's also important to start planning your content the way you plan your inventory.

You need each piece of marketing content to fill a gap in a collection built for a range of different customers. So now apply that to your content calendar: instead of asking "what interesting article can we come up with this week," "what article would people like to read," or "would I say it this way," ask "does this answer a question a customer is likely to ask?" Instead of asking "would 90% of my readers want to read this," ask "does this add something to the collection of answers my business offers across a whole range of topics?" Some pieces in the jewelry case are old and unusual. Some are safe and reliable. Some are bread-and-butter stock items. Others are rare gems. But each one earns its spot by contributing to the whole, not by being individually and universally beloved.

Move the Bar for Approval

Of course, to succeed in this wild wild west of the internet, you have to move your bar for approval. Not lower it. Change it. It's still important to write clear content that provides helpful information, and ideally that content is literate (this is a reflection on your brand, after all).  But the number of people who need to personally love the content for it to deliver marketing value is startlingly close to zero. Hold your content to the standard of satisfying only yourself, and you'll publish once every six months, if that, because everything has to clear a bar only you can reach. Hold it to the standard of clear, useful, consistent, and literate, and you can publish every week without agonizing over a single sentence.

But! If you're thinking that you can rely on AI to produce this regularly published, consistent content, think again. AI engines also prioritize original content. Research shows that both Google and answer-engine research prioritize content built on "genuine expertise, distinct points of view, and original research," rating that content well ahead of generic material. They are also suppressing mass-produced material (Google actually calls this "scaled content abuse"). So if yours is the only interesting, original, literate content available in a sea of AI-written drivel, yours will be the content that is cited. You see, AI is terrific for searching through millions of words in milliseconds, but it's not so great at producing those words in creative and unique ways.

So it comes down to this: If your team can produce content that answers questions customers might ask—even if it's not something you would have written yourself or would want to read—but is published 200% more often than you'd otherwise manage, this beats a handful of perfect articles sitting on a site that looks abandoned. AI search rewards the businesses that figure this out. It has no way of rewarding a business that's still waiting for the perfect sentence.

The jeweler's case doesn't need every piece to be their favorite. Your website doesn't need every article to be the one you'd frame. It needs to be full, current, and honest about what you sell, and it has to be helpful to people searching for answers. That's a standard you can actually hit every week. And that's the whole point.

Every couple of years, McKinsey does one of these surveys where they ask big investors (the kind managing billion-dollar portfolios) what makes a company attractive. And every time, the answers reveal more about the state of business than just “what investors are looking for.” They tell us where business owners and executives should be aiming their attention.

What Investors Are Looking For: EBITDA

This year’s survey (August 2025) put financial performance right back at the top of the priority list. Specifically, EBITDA — earnings before interest, taxes, depreciation, and amortization. Thirty-one percent of the investors said it was their primary lens for deciding whether a business is worth their attention. If you’ve been in the trenches of a small or midsize business for any amount of time, you know that EBITDA isn’t some fancy Wall Street metric. It’s the clearest way of showing whether your operations actually make money once you back out the tax math and other things accountants add in. EBITA is how you can see what your business actually earns.

In a world that is buzzing non-stop about AI, the loudest message from investors is still, “show me the profit engine.” Not just the profit … but how you’ve engineered your company to continue earning that profit. And that’s a reminder small businesses can use. AI might get you in the conversation, but healthy cash flow is what keeps you in the game.

Competitive Advantage Still Matters, But...

In this survey, competitive advantage came in second place. About 19 percent of investors said they look for businesses that have carved out and defended their market position. Interestingly, that number has dropped since McKinsey’s last survey. Which tells me that in an environment of inflation, volatile interest rates, and an uncertain economy, the big-money people are less impressed by differentiation for its own sake. They want evidence that your advantage translates into consistent financial performance, not just a clever story about why you’re different.

That doesn’t mean competitive advantage is dead—competitive advantage always matters. It means you have to prove your advantage works. It’s insufficient to say “our product is unique” or “our service is unmatched.” You have to show how that uniqueness translates into higher retention, repeat buying, or better margins. If your competitive advantage claims are just confetti and canned applause, investors, bankers, and your own customers will see it for what it is.

Don't Underestimate the Value of Leadership

The third most important factor in the surve is leadership. This is one area where small and midsize businesses often underestimate themselves. Investors don’t just look at whether the numbers are good; they look at whether the leadership team is aligned in what it says to investors, employees, and customers. When leaders send mixed signals about mission, culture, or strategy, it’s a big red flag.

I wish everyone understood that this is just as true outside the investor world. Customers pick up on misaligned leadership. So do employees. Even your supply chain partners can sense it. Alignment isn’t about everyone repeating the same slogans. It’s about clarity of intention, how well what you say lines up with what you do, and whether or not every decision points in the same direction.

Which brings us to something McKinsey highlighted that I think is useful far beyond the investor space: the equity story. Investors want a narrative that ties together your financial performance, your competitive position, and your long-term vision. They want consistency across every touchpoint, whether it’s a quarterly report, a pitch deck, or a just conversation over coffee.

Should SMBs Care What Investors Are Looking For?

Of course, most SMBs aren’t pitching billion-dollar investors. So why does this matter? Well, your equity story is still incredibly important. It’s just that your audience might be a bank, a prospective customer, or the people you’re trying to recruit. Your equity story isn’t just about ambition; it’s about showing who you are, what you do that makes you different, why you matter, how you’re planning to grow, and how your numbers and strategy fit together.

What About AI?

In case you’re wondering, AI showed up in the survey results too. Thirty-one percent of investors said AI or technology utilization was part of what they’re looking for. But that’s an important sentence. “AI or technology utilization.” That’s a huge jump from just two years ago, when it wasn’t even on the list. But it’s also not the hype-y demand for AI at all costs. Still, it’s important. If a third of investors now expect AI as part of the baseline, then “we use AI” isn’t a differentiator anymore — it’s table stakes. But the real question is if you’ve implemented AI in ways that actually change your economics or your customer value.

So if I were to boil this survey down into guidance for small and midsize business leaders, it’s this:

• Get your financial house in order and know how to talk about it in plain terms.
• Show that your competitive advantage creates tangible outcomes, and that it’s not just a good slogan.
• Keep your leadership team aligned and clear, because consistency builds trust way faster than charisma.
• Build your equity story like your future depends on it, because it does.
• And if you’re touting AI, be ready to explain how it changes the game for you. If it’s just a box that you’ve checked, that’s going to be obvious.

The investors may have been talking about billion-dollar portfolios, but these lessons cut straight to the heart of what keeps a business attractive at any size. And that’s in every business’s interest.