3 Reasons To Consider AI Agents For Your Organization

What's Your Mix of Carbon and Silicon Workers... (republished from Forbes)

Nvidia co-founder and CEO Jensen Huang has said he hopes his organization will grow from 36,000 workers today to 50,000 workers and 100 million AI agents. I’m calling this new mix of human and digital workers the hybrid organization.

Whether you are at an established firm or a startup, 2025 is the year you need to ask yourself: “How many digital workers should I have by the end of 2025?”

Whether you are at an established firm or a startup, 2025 is the year you need to ask yourself: “How many digital workers should I have by the end of 2025?” Each firm must decide this because 2024 was the year of generative AI/AI experimentation, and 2025 will be the first wave of significant implementation — because of the three key reasons below.

Reason 1: Capital Substitution for Labor

I am currently analyzing the economics of automating call centers with and without generative AI. I have calculated that for the price of $30 dollars worth of AI “tokens” per day (AI models operate on pieces of words or images known as tokens) I can automate a majority of a call center employee’s job. The fully loaded cost of a call center worker’s salary in the U.S. is about $300 per day. That means that for about 10% of a human worker’s salary I can create a digital worker to deliver 50% or more of their job, and I still have $290 per day to automate even more. As in the industrial revolution, the AI age is ushering in a massive substitution of capital for labor. Many studies have shown this powerful trend, and every executive must take a long hard look at their own organization because of it.

How big will this trend be? I expect in 2025 a third or more of firms will deploy labor-saving generative AI/AI at scale in at least one major function. These hybrid organizations will lead the way in cost as they also learn how to optimally create and work with digital workers. Developing a new productive capacity takes time, so senior executives who have a wait-and-see attitude may find themselves on the wrong side of an experience curve that will be hard to compete with.

I predict the capability to deploy a truly hybrid organization will become better and better with more volume and transactions. (See Bruce Henderson and BCG’s classic work on this powerful strategic concept of the experience curve and why first movers can gain competitive advantage if they apply it rigorously.)

Reason 2: Lower Cost of Innovation

Chip Hazard, co-founder of Flybridge Ventures, a successful early stage venture capital firm, has said, “With this new wave of AI, startups that used to ask for $5-10 million dollars are now asking for $2-4 million and using AI to make up the difference.”

AI, well applied, creates organizational capacity to do new things. Think of Google’s policy of letting people work on their own innovations one day a week, which has helped them create many new things including the well-known Google Finance product. Generative AI/AI can help deliver the slack to incubate any type of innovation. (The interested reader can explore a great Harvard Business Review article from 20 years ago on “The Ambidextrous Organization” for more thoughts on this ever-present leadership tension between running the business of today and inventing the business of tomorrow.)

Digital workers can help with the innovation process itself, too. Large firms like Coca-Cola have used AI to collaborate on images and branding, and many academic papers (such as this one) demonstrate increased innovation while using AI because it is a great collaborator on ideation, simulation and explication. For example, creating optimal customer profiles, analyzing trends in markets, laying out detailed marketing execution plans are trivially easy to draft, review and improve. This means hybrid organizations will have more capacity to innovate as well as a lower cost of experimentation than traditional firms.

Reason 3: Agile Scalability

As a person who has run large people-intensive businesses, I know from experience just how difficult it is to scale up and scale down personnel in the most effective and humane manner. Digital workers and the hybrid organization can deliver the promise of massively scalable services of higher quality and less volatility. For example, when getjerry.com, the popular car insurance and refinancing site, created generative AI tools to help serve its 5 million customers in the chat and text channels, it was able to automate all but 11% of the customer questions with higher satisfaction and almost instantaneous response. Not only did this create a $4 million per year ROI for the company, but it also provided scalability that will enable it to grow 3X or more without adding any additional customer service staff. A hybrid organization that uses digital workers to augment tasks with peaks and valleys of demand such as customer service, contract review, etc., will have better service with less risk.

Key Questions to Ask Today

1. What kinds of digital workers do I need? To answer this, I’d recommend our WINS framework that helps executives decide where to start with genAI.

2. Does my organization have the skill to “hire” and deploy digital workers? If not, how do I build that capability in my firm?

3. How hybrid will my organization be by the end of next year?

If your answer to the last question is 0%, I believe you are on the road to competitive disadvantage. Firms that embrace hybridization will be able to do things faster, better, cheaper and with more innovation, too. Moreover, they will be gaining valuable experience in this new skill of mixing human and digital workers. We are so early in this new generative AI/AI world those leaders who create the management capacity to design, deploy and improve a truly hybrid organization will build a more agile, innovative organization with superior economics.