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Tech firms are cutting a skill that’s vital for AI

 

Executive Summary

 

Tech firms are chasing AI talent to help fuel their product innovation and business growth. To support growth, though, firms need to do more than develop AI capabilities — they need to implement AI across their enterprises, evolving beyond limited tools in isolated teams. That enterprise evolution requires clear guidance, driven by a skill set that tech firms have recently been cutting.

 
 

Complex needs

 
 

To capitalize on the power of AI, tech firms need the right talent. But the skills required are complex and changing.

Andrea Schulz

“You have the shortage of true AI talent in the engineering department, But then, you have another interplay with AI enabling vibe coding where people can create code by using an LLM.”

Andrea  Schulz 

Head of Technology Industry
Grant Thornton Advisors LLC
Partner, Audit Services, Grant Thornton LLP

 

“You have the shortage of true AI talent in the engineering department,” said Grant Thornton Technology and Telecommunications Industry Leader Andrea Schulz. “But then, you have another interplay with AI enabling vibe coding where people can create code by using an LLM. So, there are hurdles, but there are also technologies breaking down those hurdles.”

 

AI has become a reason to either add or cut engineers. “You can see headlines where companies are right-sizing as they implement AI, though that’s more isolated to large tech companies,” Schulz said.

 

Most tech workers are not resistant to AI — they are savvy learners who want to acquire new skills that will help them upgrade ahead of AI replacement. Many are ready to help drive growth when they have the right opportunities, and AI can empower them. “We’re not seeing great displacement,” said Grant Thornton Business Consulting Principal Joe Ranzau. “What we are seeing is that companies are able to take advantage of boosts in productivity per employee.”

 

With this new capacity, many tech firms can use their existing workforce to drive AI innovation, if they are guided by a strategy. “Most of the mid-market tech companies are trying to understand just how to effectively use AI to harvest ROI,” Schulz said. Ranzau agreed, “As we look at the midmarket, almost everyone’s struggling with how to turn AI into something that’s revenue-generating, taking it out of that on-the-side pilot phase.”

 

 

 

Management skills

 

Whether an AI pilot is testing an internal solution, testing a product on the firm as “customer zero,” or a mix of both, it’s important to resolve both human and technical issues. In midmarket tech companies, AI pilot projects are usually driven by leaders who are one or two steps down from the C-suite, Ranzau said. “There’s usually a director-level position responsible for an AI innovation, helping to set the strategy and pull tiger teams together to do pilots. The struggle is that they’re piloting, but they’re not necessarily finding ways to drive adoption.”

 

It’s critical to develop the right AI solution and strategy, but then firms need to drive adoption and success through the thorny complexities that tangle most initiatives.

 

“There is a skill that we need to pull on there,” Ranzau said. “A good portion of the problem is not necessarily worker resistance or a lack of worker willingness. Frankly, it’s a failure of leadership. When we think about adoption, and how to bridge that gap, many companies weren't good at that to begin with.” In the Grant Thornton Digital Transformation Survey of more than 550 executives, respondents said that user adoption was the top cause of technology initiative failures at their organizations.

 

“Many organizations are low-accountability, consensus-driven and operating within separate towers. That’s why many leaders struggle with driving cross-functional collaboration and accountability,” Ranzau said. “So, if we think about skill gaps: Yes, we want to address the workers. But there’s an opportunity where the middle management that’s driving this innovation isn’t equipped to drive adoption.”

 

The paradox is that recent layoffs have further reduced those skills, as Schulz noted, “That’s where we’re seeing a lot of the cuts — they are right at that that middle management level.”

 
 

Human skills

 
 
Joe Ranzau

“You’re seeing almost every organization cut middle management but, from a human-based adoption perspective, that middle manager is required to drive the human behavior to adopt a new tool.”

Joe  Ranzau 

Partner, Business Consulting
Grant Thornton Advisors LLC

“You’re seeing almost every organization cut middle management, but from a human-based adoption perspective, that middle manager is required to drive the human behavior to adopt a new tool,” Ranzau said. “So now, we have fewer people, less equipped, with more need to drive transformation.”

 

Transformation requires a vision, but it also requires more. “It’s not just the aspirational art of the possible, because you’re trying to manage human behavior and you’re trying to get humans to do something different,” Ranzau said. “Now, we’re asking them to completely transform how they’ve done their work, and we’re not taking any actions to overcome inertia and bring people on that journey.”

 

Why do so many initiatives get tangled in the thorns along that journey? “They’re thinking about AI adoption as a tech issue rather than a human issue,” Ranzau said. “Leaders are not equipped to lead AI adoption, and organizations are not equipping their leaders for it, because they’re thinking about it like an IT project rather than a human project. Essentially, many organizations are planning to accelerate investment in new technology while cutting their investment in the ability for humans to use the new technology.”

 

“Where we are seeing success is when organizations tackle it from more of a business and human perspective, cross-functionally,” Ranzau said. Companies need to facilitate the skills necessary for people to adopt new technology, understand it and activate the business strategy.

 
 

Cross-functional change

 
 

Cross-functional management can help AI initiatives break through to achieve enterprise adoption and success. “At many companies, you see a very siloed approach to GenAI adoption,” Schulz said. “Whoever is overseeing deployment is responsible to ensure its success.”

 

Funding can provide another barrier, Schulz said. “Often, an enterprise’s AI funding gets housed in the office of the CTO or CIO — you get a very siloed decision, and it is viewed as a software purchase rather than a transformational tool for your workforce.”

 

“We have some fundamental challenges that inhibited innovation before AI, and I don’t think they’re that different now,” Ranzau said. “There’s an incredible amount of hype, and a fundamental belief that GenAI is completely revolutionizing how we’re working. But we’re expecting people to just intuitively know how to work differently without reinforcing those behaviors.”

 

“There needs to be a cultural transformation at many organizations, to address those fundamental problems that existed before AI,” Ranzau said. “Mature organizations that are actually effective at driving initiatives have cross-functional teams that are nimble and iterate quickly. They’re not trying to revolutionize everything, they’re tackling one thing, bringing it to completion and changing a way of working.”

 

 

 

Cultural change

 

Even in a tech company that has a culture of disruptive innovation, employees often respond best to change that is controlled.

 

“There’s a way to incrementally ease change into an organization’s culture,” Ranzau said. “From a product perspective, tech companies find more success when they ease in AI capabilities with minor conveniences rather than a big bang.” That controlled approach requires someone who sets the vision, schedule, communications and reinforcement — possibly with training, especially for those who are willing to help champion the new capabilities.

 

“In the tech industry, there is a training element where you show people how they can best use an AI capability, and that gets them thinking through other ideas,” Schulz said. “Maybe it's not a structured use-it-in-this-manner use case, but rather it’s giving them ideas to engage with it and make it accessible.”

 

When firms foster effective cultural change, they can improve AI understanding, usage and product development across the enterprise.

 
 

Fuel for growth

 
 

Once tech companies establish the human skills that pave the path to growth, they can use AI capabilities to help fuel the engine.

 

Schulz said that AI-generated code can empower agility. “If someone is thinking about adding a feature, like a product manager who's getting real-time feedback from their customers, they could generate proposed code for engineers based on the feedback they’ve received and what needs to be added to the product. It’s another lift they can do before even getting to the engineers, so they can conceptualize it and actually get code behind it, then the engineers can run with it. The time to development much shorter and actually allows for more responsive feedback.”

 

To extend that agility, Ranzau said, “Tech firms could be using AI for quality assurance. That can accelerate dev cycles, making it quicker to find problems in the code.” Firms can use AI to drive their regression testing, reducing the time and effort for analysis. AI could also help firms compare the output from multiple developers, to identify if one drives greater processing efficiencies or applies other best practices. These processes can be streamlined in a way that was not possible with traditional automation, but AI can also fuel new external capabilities.

 

“I would look at lead generation,” Schulz said. “That can help you get more directed leads. There are already solutions that can evaluate who is going to be the best use of a salesperson's time, or who might resonate with a product, as well as to help identify blind spots in the total addressable market.”

 

Your organization needs technical skills to empower AI solutions, but it also needs guidance and management that can pave the path to solution success.

 
 

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