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LegalDecember 03, 2020

Are you ready for AI’s third wave of business change?

Originally published in Houston Business Journal.

The phrase “disruption is the new normal” is in vogue, but I prefer the term “managed change.” Companies should always be prepared for the next technological wave, and they should be willing to adapt to wherever that wave takes them.

Case in point: artificial intelligence. A few years ago, AI was known primarily for its early uses, like delivering search results. This first wave quickly grew into a second wave, led by the advent of machine learning with smart speakers and voice assistants. Now, we’re entering a third wave of AI-enabled processes that include deep learning, predictive analytics and actionable intelligence.

Barriers to change

Not every company will be ready. Pockets of your staff could fear that technologies like AI may take their jobs — and that fear could be heightened by the current economic climate. Members of the management team may be reluctant to invest in new technologies because they don’t understand them, they think they’re too expensive, they believe everything is working just fine, or all of the above.

In my business, we offer solutions for corporate legal departments, so a core user group is attorneys. While they may not love the administrative components of their jobs, they also don’t want to cede control to software or spend time learning new technologies. They can represent a major barrier to adoption if the change is not well managed.

Too many organizations make the mistake of believing they’ll install an AI solution and, with a few training sessions, enjoy instant adoption and results. They overestimate the short- and long-term impacts of adopting these tools. As a result, they’ll be left with solutions that no one wants or uses. Worse, the more fundamental the change required by new technology, the harder it is to implement. AI fits that bill.

Understanding change

My team and I have witnessed the impact that new technologies have on organizations, especially when it comes to AI-enabled services. No matter how large or successful the company, managing this change is not easy.

Yet, people have dealt successfully with technological change for decades (know anyone who’s still not using a smartphone?). Even where legacy systems still exist, they typically live alongside newer technologies. In reality, technology hasn’t replaced workers on a massive scale. Instead, it has done what it always does: evolve the role of the worker through increased efficiencies and new opportunities.

The lesson is that even as technology changes our work, we remain highly resilient. But our ability to become comfortable with change is dependent on the success of the change management approach, including helping people understand why the change is occurring and the ultimate benefits it will bring.

Planning for change

Like any major corporate initiative, onboarding a new technology requires strategic planning and expectation setting. Initial goals should be established with the expectation that those will shift along with business needs. We recently helped a major insurance carrier implement a new software platform to manage its legal spend. The change was being managed effectively until a new executive team was put in place about halfway through the implementation. This resulted in a sudden shift in objectives. The key lesson: Change is fluid; be flexible.

Before you make an investment in technology, communicate the value that the solution will bring to the company, and prepare a business case or benefits analysis to get key stakeholders on board. A proof of concept (POC) is always a good first step. This allows stakeholders to engage and see the potential benefits to their own legal department firsthand. We advise clients to take a top-down and bottom-up approach in which you gain executive support at the same time you develop cheerleaders for the implementation among key users. You’ll need their combined support to make your investment pay off.

Communicating change

Communicating with stakeholders early and often is the most critical aspect of successful change management. It gives you the chance to educate them on how the change will positively impact the business and their individual role. It can also assuage any concerns.

For instance, we’ve worked with several customers who were very concerned about how automating billing processes powered by AI might impact their relationships with law firm partners. We worked with them to develop communication plans and initiatives that helped articulate the benefits of the technology to the partners in advance to prepare them for the change to their work processes.

As society enters the third wave of AI, which DARPA’s John Launchbury describes as when AI systems understand context and meaning and adapt accordingly, technology will ultimately lead to dramatically improved efficiencies in daily workflows and better decision making. All of this requires even more communication with stakeholders, along with assurances that they will still be needed. AI is meant to help them do their jobs better, not replace them.

Communicating with employees and partners about change is important to continue over time. Set up a regular cadence of communications articulating where the company stands in the implementation process to keep people informed. In turn, solicit users’ opinions about the process as it progresses.

All communications should be transparent, supportive and authentic. Don’t force-feed stakeholders into adopting a technological change. Allow them to have a voice. Keep them involved, and help them understand they have a stake in the process.

Continuing change

Innovative technologies like AI introduce large-scale technological and cultural shifts into organizations. In a post-pandemic world, we expect to see companies streamline their operations further in response to the changes brought on by the crisis. Companies will expect greater value from each employee as they settle into new realities.

Approach technological change as a fundamental and ongoing component of your business. Keep checking in with your employees, customers and partners; assessing your benchmarks; and reinforcing the value that comes from being an organization with one foot in the present and an eye toward the future.

Jonah Paransky
Executive Vice-President & General Manager, ELM Solutions
Jonah Paransky is executive vice president and general manager of ELM Solutions. In this role, he is responsible for leading the overall performance and growth strategy of the business unit globally.
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