Companies Are Just a Graph of Algorithms

I think the reason so many people don’t understand how big AI is going to be
is that they don’t understand that everything is an algorithm.

Specifically, they don’t realize that companies are just a collection of
algorithms.

What do I mean by that?

Well, let’s say that your company takes pictures, cleans them up, stylizes
them, and adds a caption—which customers can then download in a large
format. Let’s call the company Memories.

The company started in the early 2000’s, founded by an artist/photographer,
and here’s how it works:

• The user uploads the best quality digital image that you have of the
  photo, or send it to the company,

• Memories receives it and does a high-quality scan using a bunch
  of old-school photography techniques + Photoshop

• Then they use those same techniques to stylize the image in some kind of
  way, like Retro, Cinematic, Family, whatever.

• Then they let you download the image or they send you prints.

Simple enough, and for anyone into computers you will recognize this as a
series of steps, aka—an algorithm.

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Explainability is the new currency.

Also, each one of these steps is an algorithm itself, just like the full set
of algorithms. So you could break the Upload step into its own piece.

But the sending and processing pieces aren’t the only flows that make up the
business. You also have:

• Setting up the company

• Hiring employees

• Paying taxes

• Paying for infrastructure

• Doing marketing

• Doing support

• Etc.

As you continue the process, you start seeing a full picture of all the
different pieces that make up the business.

I think of this as a graph of algorithms.

I use the word graph because it allows me to think of the relationships
between the different components and describe them using an action—such as
send to or receive, or whatever.

Transparency is AI fuel

This process of breaking down processes of any kind—and especially for an
entire business—is powerful on its own. If you were to have done this
exercise for any business in 2022 it would have given that business a
significant advantage.

It allows you to see all the pieces, how they fit together, and figure out
what to optimize or even eliminate from the workflow.

But when you add AI to the mix, things get truly extraordinary.

AI excels at both discrete task execution and determining how things fit
together, and every single one of your company’s workflow components
becomes ripe for optimization or elimination.

Expect the consultants

AI-deniers are simply not realizing how opaque most businesses are, how much
waste there is in their processes, or the level of redundancy and
inefficiency.

AI is about to end that, and consultancies like Accenture, KPMG, and
McKinsey will be leading that push. They will come to your executive
leadership team and offer something like the following.

The transparency / optimization pitch

• We will perform exhaustive automated and manual interview processes
  throughout your entire business

• We will figure out all the various workflows being done throughout the
  company, including
  what is automated and what is done by human workers

• From there, we will figure out where there is waste in the process

• We’ll figure out which teams are redundant

• We’ll figure out which teams are not effective

• We’ll figure out which processes and workflows shouldn’t even be
  happening at all because they can be eliminated or consolidated into
  another workflow

And the result will inevitably be a smaller, tighter company that not only
saves money but has fewer humans required to run it.

Continuous optimization

This won’t just happen once.

Once AI has been used inside a company—in this way—it’s just one step away
from a workflow that continuously analyzes these business
components/algorithms. The system will constantly be asking things like:

Ok, I see these 6 components for your marketing department, let’s look at
one of those:

Cool, well we at AI-Consulting-Corp have questions:

1. How many humans are involved there?

2. How many emails are being sent by humans?

3. Why can’t we do continuous idea generation?

4. Why are we waiting a whole month for new ideas?

5. Why does it take so long to go from idea to campaign?

6. How long does it take to create the marketing copy?

7. Who’s writing that? (again, how many humans?)

8. Who’s sending all these emails? (oh, more humans)

And on, and on.

Transparency opens the door for optimization

The entire process is just steps. Steps that can be articulated and
visualized.

And then optimized.

AI will do so much of this very soon, often better than most humans.

• The sending of the meeting invites

• The idea generation

• The summarization of the meetings

• Rating the ideas

• Communicating to business leaders

• Capturing the decision from the leaders

• Developing the execution plan

• Creating the communication strategy for the company

• Coordinating between the groups within the company

• Launching the campaign

• Monitoring responses from the public

• Capturing leads

On. And on. And on.

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You’ve probably never seen your company in this way, but AI soon will.

Every one of those items is just another algorithm. And the better AI gets,
the fewer humans will be doing those pieces. (In a follow-up I’ll talk about
what human jobs I think are likely to remain in this model.)

But my company is different

You might be inclined to say that your company doesn’t just receive images
to optimize and send them back to the customer.

Your company is special. You have harder steps. Or more steps. It’s way more
complicated than I’m making it out to be.

Nope. Doesn’t matter.

That just means a bigger graph. And just because it’ll be a lot for a human
to process in one go doesn’t mean it’ll be hard for AI.

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No matter how special the product or company, it still operates as a
pipeline of steps.

Again, understanding all the pieces and how they fit together—and being able
to explain that well to decision-makers—is AI’s strength.

It really doesn’t matter what kind of business you’re in. Anything you—or
anyone else does—can be broken down into steps like this.

Ok, well now I’m depressed

I’m not trying to scare you. Or make you hate AI. Or look into becoming
Amish.

I’m telling you what’s coming and that you need to get ready for it—both as
a business owner who wants to compete in this new model, and/or as a worker
in these companies.

The upside here is that businesses are about to become way more
efficient. Which means more productivity, more output, and ultimately a lot more new things in the world.

This same process will also make it easier for people to start businesses,
including those who had no chance in 2022 or before.

But there will be downsides—especially from the loss of many
easy-to-automate human jobs. My advice is not to be depressed, but instead
to realize what’s happening and prepare for it.

The only way out of this is through.

Summary

1. Businesses can be seen as a Graph of Algorithms.

2. Once articulated in this way, inefficiencies and opportunities for
   optimization/elimination become clear.

3. AI is about to make this process commonplace for all businesses because
   companies can’t wait to optimize using AI, and AI is fueled by
   transparency.

4. Whether you’re a business owner or an employee, it’s time to start
   getting ready.

5. Understand what your business looks like as a Graph of Algorithms, and
   start thinking about what AI will recommend before it gets there.