A Framework for Investing in AI in Your Business
Nobody owns AI.
That’s the problem I’m seeing right now, especially with my clients in service-based businesses.
You’re not used to building a tech roadmap.
You’re tinkering with AI and have maybe even given a mandate to your team.
But you’re falling well short of the potential impact AI can have on your company.
In part, that might be because you (and me) are just too old to imagine what’s possible.
So you’re seeing some gains—but not transformation.
You can’t afford to invest more in AI: more of your team’s time or more dollars. You aren’t used to holding budget aside for dedicated R&D.
But…you also can’t afford NOT to invest more in AI. Because the train is quickly pulling away from the station, and you want to be along for the ride.
Here’s the upside: Although AI is a new technology, it doesn’t require a whole new way of investing in it for your business.
***
I’ve invested in many capabilities for my companies over the years. I typically follow the same approach—one designed for companies without a lot of funds to spend. Especially when you’re in a testing phase, you can’t go broke on unproven experiments.
Here’s my framework for investing in a new capability or resource:
The Investment
First, you will have to spend money. That’s not negotiable. But maybe not as much as you think.
At Crews & co., we’ve hired an AI intern who works for us 10-15 hours per week. This is an expense we can shoulder. Our intern is well-paid relative to his age and experience (and he’s young, which is very intentional), but he’s not a full-time employee and we aren’t responsible for benefits, taxes, etc.
The cost is manageable, especially because we aren’t just considering him an expense (think somewhere in the $30-$50 per hour range).
The Defensive Maneuver
Before we get into ROI, we have to acknowledge that investing in AI is partially defensive. This is money we need to spend in order to stay competitive; otherwise, we risk losing revenue, clients, and market momentum because we haven’t stayed in the game.
If AI capabilities help us retain revenue in a climate where we need to collectively upskill, then that’s what we have to do. Does it mean we are spending more to make the same amount? Temporarily, yes. But AI should not only help us stay competitive, it should improve efficiency as well.
ROI Part 1: Buying Back Time
Next, we look at how to get a resource like this to effectively pay for itself. In other words, how can we recoup the cost of investing in AI?
There are a few ways to do this. In this particular instance, we do it through efficiency improvements. Our intern is tasked with “buying back hours” for our internal team, hours that can be reallocated to client work and therefore make the team more profitable. If he buys back enough hours, he will more than pay for his costs through efficiencies.
Other ways we get resources to cover their own costs include making them billable as fractional resources for our clients and setting targets around sales numbers or books of business. The method depends on the role.
(One note: if a resource helps you “buy back hours” for your team, it is your responsibility, not theirs, to bring in enough business so your team can utilize that additional time.)
It’s a mindset shift, but if you start with the idea that no individual’s compensation is simply an operating expense, you’ll likely find creative ways to cover that person’s costs.
ROI Part 2: New Revenue Streams
This is the fun part, but it isn’t the main focus until the resource effectively pays for itself.
This is where innovation and creativity come together to imagine new lines of business and new offers. We look for opportunities we can monetize to increase revenue, deliver more value, and generally wow our clients.
Defend, Extend, Upend
If you’re a regular reader of this newsletter, you might notice this framework maps pretty closely onto the Defend, Extend, Upend framework I’ve written about previously. Using this approach, we’ve already made changes inside the business, including some that are visible right now to our clients.
But I want to stress that this framework isn’t just about AI. It can be used for any new capability you need in your business—one that you need to invest in, whether you think you can afford it or not.
Syncing Back to OKRs
It’s worth saying that this initiative doesn’t live in a vacuum. What we’re doing with AI is part of a tech roadmap that directly informs our annual planning and especially our quarterly OKRs.
There is an immense amount of prioritizing required to do this well. I guarantee that your business could improve in hundreds of ways using AI. It’s your job to narrow the field and push on the priorities that will give your business real leverage.
So, who should own AI in your business?
Possibly someone you haven’t hired yet. A new resource that will defend your current position, pay for their costs in efficiency improvements, and help you reimagine what’s possible for your organization.
That’s an investment worth making all day long.
