Managers Stalling the AI Revolution
Key Points
- Individual contributors overwhelmingly want AI tools that can double or triple their productivity, but managers often block access due to budget and security concerns.
- Managers need to champion AI adoption by explaining to leadership and IT that AI software is a strategic expense, not a minor convenience, and that its cost is still far lower than hiring additional staff.
- The price of AI tools (e.g., $200–$400 per employee per month) is higher than traditional software but represents a cost‑effective productivity multiplier that will only become more valuable as tools evolve.
- If organizations don’t confront legacy processes and budgeting inertia now, they risk falling behind competitors who will invest in AI‑driven productivity enhancements despite rising software costs.
- Anticipated future AI solutions could cost $1,000–$2,000 per employee per month, making early adoption and cultural readiness essential for maintaining a competitive edge.
Sections
- Managers Blocking AI Adoption - The speaker argues that overcautious managers are denying staff access to affordable AI tools—citing security and budget excuses—thereby stifling potential productivity boosts that could double or triple performance.
- Beyond the Mechanical Horse - The speaker argues that AI-driven software no longer fits traditional software categories or budgeting models, urging a new conceptual and financial framework.
- Evolving AI Investment Expectations - Senior leaders must recognize that modern AI tools far exceed basic chatbots and require substantial investment to amplify team impact.
Full Transcript
# Managers Stalling the AI Revolution **Source:** [https://www.youtube.com/watch?v=Vm_v70xhas8](https://www.youtube.com/watch?v=Vm_v70xhas8) **Duration:** 00:10:05 ## Summary - Individual contributors overwhelmingly want AI tools that can double or triple their productivity, but managers often block access due to budget and security concerns. - Managers need to champion AI adoption by explaining to leadership and IT that AI software is a strategic expense, not a minor convenience, and that its cost is still far lower than hiring additional staff. - The price of AI tools (e.g., $200–$400 per employee per month) is higher than traditional software but represents a cost‑effective productivity multiplier that will only become more valuable as tools evolve. - If organizations don’t confront legacy processes and budgeting inertia now, they risk falling behind competitors who will invest in AI‑driven productivity enhancements despite rising software costs. - Anticipated future AI solutions could cost $1,000–$2,000 per employee per month, making early adoption and cultural readiness essential for maintaining a competitive edge. ## Sections - [00:00:00](https://www.youtube.com/watch?v=Vm_v70xhas8&t=0s) **Managers Blocking AI Adoption** - The speaker argues that overcautious managers are denying staff access to affordable AI tools—citing security and budget excuses—thereby stifling potential productivity boosts that could double or triple performance. - [00:03:34](https://www.youtube.com/watch?v=Vm_v70xhas8&t=214s) **Beyond the Mechanical Horse** - The speaker argues that AI-driven software no longer fits traditional software categories or budgeting models, urging a new conceptual and financial framework. - [00:06:46](https://www.youtube.com/watch?v=Vm_v70xhas8&t=406s) **Evolving AI Investment Expectations** - Senior leaders must recognize that modern AI tools far exceed basic chatbots and require substantial investment to amplify team impact. ## Full Transcript
managers are screwing the AI revolution.
And I say that as someone who has
managed teams and I have great sympathy
for the challenges that we're all
experiencing right now, but it's true.
It's true. And I'm going to I'm going to
be really honest. I have talked to a lot
of individual contributors and the
universal complaint I hear near
universal 99% 98% is that they want
access to AI tools that will help them
do their job better in a really
significant way. Like we're talking in
some cases for your best performers
double or triple their productivity and
they can't get it. And they can't get it
because the managers are not budgeting
for it. And managers will tell me well
we can't go to it. It is giving
difficulties about security going back
up to department heads. Like my boss is
just not going to like go for 400 bucks
a month per employee. They've never seen
that. Managers, senior managers,
directors, you guys carry the flag on
this. You have to be the ones that
explain clearly to your bosses, to the
IT department, why we don't live in a
traditional software world anymore. We
do not live in a world where getting
access to a regular sort of software
product is a minor help and a minor
inconvenience if you don't get it right.
It's not a big deal either way. Maybe it
costs 25 bucks a seed for the year.
Maybe it costs a h 100red bucks a seed
for the year and you forget about it.
No, we live in a world where people who
are extraordinary at AI can effectively
double or triple their productivity if
they have access to the right tools. You
can literally buy the productivity off
the shelf. And yes, it is more expensive
than traditional software. It is two or
three hund bucks a month. And you may be
thinking to yourself as a manager, I'll
kick this down the road. I'll get it
next fiscal year. I've got news for you.
It's not going to get cheaper. And the
reason why is we are now baselining
against people compensation. So you
think 300 400 bucks a month is
expensive. Sure it's expensive. Is it as
expensive as a person doing that job?
No. No it is not. It is vastly cheaper.
There is a lot of headroom there for
model makers to build more effective
tools that will go from two or 3xing
your employees productivity to 5 or
10xing it and they will charge more.
Soon you're going to be looking at
software costs maybe by 2026, by 2027
that are running a,000, $2,000 a month
per employee. And IT departments aren't
ready for that. Leadership isn't ready
for that. But it is critical that we
have the conversations now because
otherwise there are going to be a few
companies that figure that out. Figure
out that their own aged legacy processes
are getting in the way of actually
helping their employees to do better at
their work. and they'll kick the
processes aside, which is what you
should do, and they will figure out a
way to get it done. This is the same
incentive set problem that frustrates
existing employees when they see new
hires coming in at a higher comp band,
which is a notorious problem across the
industry. People care more about getting
the new hire in the door than about
keeping the legacy hire because the
incentive is to make sure that that new
hire in that moment walks in and fills
that role. Whereas the incentive for the
existing employee is just can they come
in tomorrow. It just isn't the same. We
have the same problem with software. The
incentive is can we just keep our
existing process? Can we just have them
come in tomorrow? Can we just have them
do the work? And people are thinking of
it like a mechanical horse. So in the
old days when we had the car, we did not
know what cars were capable of, right?
We thought that cars were capable of
things that horses were capable of. It
was the mechanical horse. It was
literally called that. That was our
mental model. We have the same problem
now with software. It is the mechanical
horse problem. And we think of AI
software as if it is software. It is
not. We need to have a new category for
it. And I realize that this makes me
sound annoyingly like an onhype on trend
AI agent. I don't know influencer. It's
not. The point is not to say agent for
the sake of agent. The point is not to
invent a category because we need a
category because we need to hype things.
The point is just that the old category
doesn't fit anymore. Traditional
software just isn't priced like this.
Traditional software doesn't deliver
productivity gains like this. And so if
you were going through traditional
software budgeting and planning
processes, it's not going to work, is
it? You're going to go through and like
every other department head is going to
sit there and be like, "Yeah, yeah,
yeah. We're doing our regular basic like
100 bucks a month or 200 bucks a month
total for our employees for software and
professional development." And then
we're done, right? Moving on. And you're
going to sit there as the forward
thinking guy where wherever you are,
right? Or gal or whatever in whatever
department you happen to be. Maybe
you're in product, maybe you're in
engineering, and you're going to be
like, "Well, we're going to be budgeting
2,000 bucks a month per employee." No,
that doesn't include professional
development. We actually going to budget
another 2,000 bucks a month to make sure
they get the AI courses they need to
supercharge them. And that's what we're
going to do. Doesn't that sound great?
And you're going to get laughed out of
the room because nobody else at your
level in your business is doing that.
And so this becomes a problem of the
commons. Basically, everyone is
incentivized to look in the budgeting
process for leadership. And so, nobody
is incentivized to be bold and say, "I
could deliver extraordinary value if you
can shift my budgeting." But that is
what we need. And employees are going to
vote with their feet here because the
really good ones are going to move to
roles and to businesses that get this
and they will not stay with you. They
won't they won't stay with you. best
employees at AI will go to the companies
that understand this. This is not just a
matter of Mark Zuckerberg broke the
market with $100 million compensation.
No, this is actually I mean for one,
people left Meta after that. People
walked away from the $und00 million
compensation, right? They went back to
their old jobs cuz they didn't like
Meta. So no, it's not about the money.
It's about your ability as a business to
generate a culture change that enables
your best people to feel like they can
thrive with AI. Because if you look at
it from the point of view of an
individual contributor, it has never
been more challenging to figure out a
career path. You have to figure out how
are you going to supercharge your AI
skills? How are you going to deliver in
your current role? How do you set up
your resume so it looks good in a world
where roles are changing and mixing and
merging all the time? And to do that,
you desperately need access to AI
tooling so that you can show your next
role or your existing role when you get
a promotion that you know how to use it.
And by and large, our businesses are not
setting employees up for success on
that. And I do think that comes back to
senior managers and directors. We have
to have more advocacy for our teams.
They need that for their own careers.
They need that to deliver for the
business. And if you look at it from a
managerial perspective, you need that in
order to grow your own career. Your
teams need to be that successful. We are
going to live in a world more and more
where leadership at the best companies
is going to expect you not to grow your
headcount. Instead, expect you to prove
that you have done everything with AI
that you possibly can to expand the
impact of your team as it is today. And
what we need is not just that
expectation, but a corresponding
investment in the team, a corresponding
willingness to say if we want to grow
that impact, it's not just a 20 buck a
month chat GPT subscription anymore.
That was 2023. Sorry, they now do so
much more. And I think that is one of
the hardest things to convey to
leadership is that even though the name
is still chat GPT, we have gone in two
years from a little chatbot to a agent
capable of doing hours of work. And
that's not the same thing at all. It's
not remotely the same thing. It is a
weird world that we live in that we name
it the same thing. We call it AI. Do you
does your team have AI? Right? It should
be 20 bucks a month. It's AI, right? Get
the co-pilot. It's AI. AI is not AI.
These are not onetoone comparisons. This
does not work this way. And so it is on
senior managers and directors to sit
down with teams to explain in detail
what they need. And so teams need to
explain and voice to managers. These are
the tools I need. And managers need to
explain and voice really clearly and
advocate for their teams for this use
case, for product, for engineering, for
marketing, for customer success. This is
what my teams need to be extraordinarily
productive in 2025. It will cost. It
will cost more than traditional
software, but you'd rather pay it than a
lose your best people or b flo bloat
your headcount budget because
increasingly
it is looking less in most cases like
firing people unless they don't want to
do AI and it's looking more like we're
just not going to grow the team as fast
because we have so much leverage from
AI. Well, if your team is wanting to
lean in, that's fantastic. They have the
domain knowledge. They want to lean in.
Let's get them the budget so that they
can actually deliver for the business.
And overwhelmingly I hear from people
that that is not happening. I see that
that is not happening. Very few
businesses are sitting there and saying
our software procurement has to change.
Our budgeting has to change. But it
does. It has to shift. It is not
acceptable to expect your AI employees
to do 2025 AI work on a 2023 budget. It
doesn't work. Traditional software
budgets are broken. So, if you are in
that spot, send this video to your
manager. Tell your manager, "Watch this.
This is a problem for us. I can't get
the budgeting I need to do my work." And
if you're in leadership, this has got to
be a call to action for you. You cannot
look at traditional software budgeting
the same way. This is not traditional
software. I don't care if you call it
agentic software. I don't care what the
hype term is, but you've got to shift
the way you budget for work and you've
got to invest in your best employees so
they can deliver this 2, three, four, 5x
impact over the next couple years. So
that is my challenge to you. We are we
are not in old software land anymore. We
are in new software land and there are
new rules and there are new budgets and
you have to invest in your team at a
different level. Good luck.