Gus Carlson is a U.S.-based columnist for The Globe and Mail.
If you are a connoisseur of the signature dish of public companies – the quarterly earnings call – you are familiar with the time-worn metrics and key performance indicators CEOs and CFOs use to reflect the relative health of their enterprises.
As an eager consumer of delicacies such as EPS, ROIC and EBITDA, you may have already tasted the newest metric on the investor relations menu – AIM, or Artificial Intelligence Maturity.
A new report from Accenture shows that since the November, 2022, release of ChatGPT, a form of generative AI, mentions of the technology on corporate earnings calls have soared.
AI was mentioned more than 30,000 times on Q3 2023 calls, up from just 500 in Q1 2022, the firm’s Technology Vision 2024 report said. The number of companies talking about AI on calls rose to 2,247 in Q3 2023, from 1,625 in Q1 2022. The results are hardly anecdotal: Accenture analyzed more than 70,000 S&P Global earnings transcripts across 10,452 companies from January, 2022, to September, 2023.
The buzz should come as no surprise. The promise of AI to improve productivity by streamlining processes and reducing costs – including human ones – has finance Scrooges salivating and investor relations functionaries scrambling to tell compelling AI stories to investors. Almost 40 per cent of CFOs surveyed anticipate generative AI chatbots will lead to transformational change in their business processes over the next three years.
Of course, Accenture makes a living helping companies transform, so its focus on the AI revolution has predictable self-interest. But the firm has been prolific with reports capturing the sentiment of leaders as they gird for the AI tsunami.
The trajectory of companies on the path to AI maturity are compelling. Another Accenture study found the share of AI-influenced revenue more than doubled at companies between 2018 and 2021 – and is expected to roughly triple this year.
Prepandemic, companies embracing AI as a strategic imperative reported 50-per-cent greater revenue growth, on average, compared with peers, Accenture said. And in 2021, executives who discussed AI on their earnings calls were 40-per-cent more likely to see their companies’ share prices increase – up from 23 per cent in 2018.
That insight is consistent with other snapshots of the increasingly influential role AI is playing in corporate performance. A FactSet study showed S&P 500 companies citing AI on Q2 2023 earnings calls saw a better average stock price performance in prior months compared with those companies that made no mention of the technology, even excluding the so-called Magnificent Seven leading the AI charge – Alphabet GOOGL-Q, Amazon AMZN-Q, Apple AAPL-Q, Meta Platforms META-Q, Microsoft MSFT-Q, Nvidia NVDA-Q and Tesla TSLA-Q.
As in any transformation, there are issues here. While the vast majority of corporate leaders are talking excitedly about the long-term opportunities of AI, many worry about their ability to transform their infrastructures and business processes quickly enough to take full advantage of the technology’s potential.
From an HR point of view, the finance world’s enthusiasm about AI’s abilities to improve productivity is a case of what’s good for the goose is not always good for the gander.
Accenture research on AI’s effect on work forces shows a big gap in trust between leadership and employees. While most workers see value in working with gen AI, more than half worry about job loss, stress and burnout. Further, almost 60 per cent of workers fear AI will eliminate their jobs, but less than a third of C-suite leaders say employees are worried about job displacement.
The gap goes beyond perception. The vast majority of workers want to learn gen AI skills, but organizations have not made this a priority, with just 5 per cent providing training.
There is some hope for humans. Companies leading the AI transformation are setting an example for newbies by investing in skills mapping and data integration to make sure both their people’s capabilities and their businesses grow in tandem.
Of course, creating a work force agile enough to adapt to such a sweeping transformation must start at the highest levels of an organization. Accenture is pragmatic about the challenging task of aligning business performance with human foibles: “For leaders to successfully bring a change of this magnitude into their organization, they must ensure that work – not only what they do, but how they do it – works for everyone.”
Regular humans in the AI crosshairs can only hope their C-suite leaders are as hungry to do good by them as they are to do well on their earnings calls.