People will be your competitive advantage
One of the biggest mistakes companies are making with AI is treating it primarily as a way to reduce talent, rather than as an opportunity to rethink how people and technology can work together.
The temptation is understandable, as AI can automate work and take on tasks that once required large teams. Increasingly, HR has become an obvious place to focus on staffing reductions. AI can screen candidates, answer employee questions, and analyze workforce data.
This results in leaders asking how many HR staff members they still need. The bigger opportunity, though, is to design the organization to succeed in the future. In the AI age, one of the greatest competitive advantages may be something distinctly human: your people strategy.
PEOPLE STRATEGY IS BUSINESS STRATEGYI was once talking with Steve Kerr, coach of the Golden State Warriors, about people strategy. He told me that one of the most important values he instills in his team is connection.
Every player walks onto the court with something different happening in his life. One may be under enormous pressure to perform. Another may be dealing with something personal. Someone else may not be having his best day. Yet when the game begins, they have to figure out how to work together. If that connection breaks down, the entire team strategy can break down with it.
Companies are no different.
You can hire extraordinary people. Invest in the best technology. Build a smart business plan. But none of it guarantees that people will come together in a way that delivers the outcomes you want.
That is where people strategy comes in. It connects the business model to how people operate every day, from culture and organizational structure to decision-making, leadership behaviors, and processes, to make it happen.
The strongest CEOs understand that people strategy begins at the top. They work with their leadership team and people leaders to determine how the organization needs to operate to achieve its goals.
EVERY CEO NEEDS A PEOPLE STRATEGISTPeople strategy is a leadership responsibility. The CEO needs a trusted partner who brings a deep understanding of people and organizations to the table, helping translate business priorities into the talent, culture, structure, and ways of working required to achieve outcomes. I call that person a people strategist.
A people strategist is not someone who just understands compensation, recruiting, benefits, or employee relations. While important, a great people strategist also understands the business and serves as a strategic partner to the CEO and leadership team.
They know how the company makes money. They understand the strategy. They can connect what is happening across finance, technology, operations, sales, and people. They see where the organization is getting stuck and understand how changes in talent and technology, as well as structure and culture. They can also help devise ways of working to help move it forward.
I often say that the best people strategists are business people, where people are their product.
STOP DESIGNING AROUND YOUR CURRENT ORGANIZATIONAnother challenge I often see is that companies are trying to evolve the organization they already have.
They look at their current jobs and ask which tasks AI can automate. They look at employees and ask what new skills they need. They look at existing structures and try to make them more efficient.
A better starting point is thinking about the problem we are trying to solve. What are we trying to accomplish? What value are we trying to create? What should a person do versus what technology should do? Where does combining the two produce something better?
Then design the work from there. That may result in very different organizations. We may rely less on static job descriptions and more on teams organized around specific problems. Companies may use a combination of full-time employees, independent experts, consultants, partners, and technology depending on what needs to be accomplished.
The point is to stop assuming the organization has to look like the one we have today.
We made a similar mistake during the pandemic. Many companies moved employees from an office to their homes and considered that a transformation. They changed the where, but not necessarily the how.
AI gives us another opportunity to redesign how work happens. We should not waste it by layering new technology onto old ways of working. The companies that get this right will build a better organization combining the best resources.
PEOPLE ARE THE DIFFERENTIATORAs AI becomes more powerful and widely available, companies will increasingly have access to many of the same tools. The technology itself will not be enough to create an advantage. The difference will be what people do with it.
People bring judgment, curiosity, creativity, relationships, and context. They see connections others may not see. They understand when to follow the data and when to question it. And they combine ideas and technology, along with experience, in ways that can create something new.
As technology becomes more ubiquitous, people will become an even greater source of differentiation. The companies that succeed will have the strongest people strategies. They will know how to bring together the right talent, leadership, culture, and technology to achieve what others cannot.
Tami Rosen is a board member, advisor, and executive at finance and technology companies.