Interest rate held and AI workplace adoption
Plus, Asos warns staff over virtual meetings, Sainsbury's pays to get rid of its bank and the eye-watering economic boost of Taylor Swift's Eras Tour
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As expected, the Bank of England has held the interest rate at 5.25 per cent for the seventh time in a row. We’ve included a more detail below but now, we’re going to focus on something a little different.
A lack of talent has long been hailed as one of the biggest challenges facing business leaders. The Business Barometer report released by The Open University, in partnership with the British Chambers of Commerce (BCC), has reiterated just how problematic this challenge is. In particular, it reveals a theme that many leaders we speak to are struggling with: AI adoption.
OpenAI’s release of GPT-4o last month has shaken up the consumer view of what is possible with AI. However, countless leaders don’t even know where to start with embedding the tech into their businesses. At The Times CEO Summit today, Simon Freakley, CEO of consultancy Alix Partners, said that “AI is the number one opportunity, not the number one threat”
The Business Barometer found that 64 per cent of organisations surveyed have reported a lack of confidence in applying either new AI or green technologies. The report’s findings come just a week after the release of a similar poll by talent solutions provider Kelly, which found that 55 per cent of leaders believe that AI is critical for improving their businesses. Yet most don’t know where to start.
The futurist and strategic business advisor Bernard Marr has some advice on that point:
“Start with your strategic goals, not the technology. AI is not a panacea that magically resolves all business challenges. Before diving in, companies need to identify clear use cases where AI can have a meaningful impact that is aligned with business objectives. Whether it’s improving supply chain efficiencies, personalising marketing efforts or enhancing customer service, the key is to ensure that AI solutions address specific pain points and add tangible value.”
When adopting AI, it’s vitally important to remember that it is not a silver bullet. The Harvard Business Review estimates that as many as 80 per cent of AI projects fail. This is almost double the rate of corporate IT project failures a decade ago.
The aforementioned report from Kelly spoke to 1,500 senior executives, as well as 4,000 workers. Some 73 per cent of employees expected AI to impact their roles in the near future, while 63 per cent of them had mixed or negative feelings towards AI. The report, titled Building a Resilient Workforce in the Age of AI, encouraged leaders to bring their workforce with them as they implement new systems to avoid disruption.
Amazon announced today that it will expand its generative AI listing capabilities to selling partners across Europe. The company has been using machine learning and AI for almost three decades but these new capabilities will allow sellers to use the tools to optimise product titles and descriptions, analyse and enrich existing product listings and more. A survey of over 2,500 SMEs using these tools already across the UK, Germany, France, Spain and Italy has found that 77 per cent reported saving time/creating efficiency, 72 per cent improved profitability and 70 per cent enhanced customer service.
Another way to do this is through skills training and incorporating AI into existing roles. This could also mitigate skills shortages within organisations. Some 43 per cent of leaders are missing business opportunities due to a lack of talent, according to the Kelly report.
A poll of more than 10,000 desk workers worldwide by Slack found that 81 per cent believe the tech is improving their productivity. “The data shows that employees using AI are having an all-around markedly better time on the job,” says Christina Janzer, head of Slack’s Workforce Lab. “They’re not just more productive; they’re experiencing greater excitement, fulfilment and pride in their work. Leaders should take note that using AI at work is correlated with a host of positive associations.”
Not sure where to start? Bernard Marr, who has written a number of books on AI, has a great guide for those looking to apply AI to their organisation. There are also countless consultants who specialise in AI adoption. While these services may come with spend up front, they will almost certainly pay for themselves in time.
Business Question
Who am I?
- My first job was a paper round earning £1.71
- I started working in restaurants at the age of 13
- I cut my teeth working at Planet Hollywood and Pizza Express
- I listed my vitamin and mineral supplements on the AIM in the early 2000s
- I have honorary doctorates for my contribution to business from Staffordshire, Oxford Brookes and Cranfield
- I was one of the firebreathers on a well-known BBC TV show
The answer can be found at the bottom of the page.
Business in Brief
Everything you need to know
1. The Bank of England has kept interest rates on hold at 5.25 per cent. It was a seven-to-two decision by the Monetary Policy Committee. The announcement comes as a blow to the Conservatives who were hoping to use a boost in consumer finances to woo voters. A cut is expected at the next meeting in six weeks’ time despite the bank warning that the inflation rate is likely to rise in the second half of the year. You can read more here.
2. Asos has warned staff that virtual meetings have a “detrimental” impact on company performance as it urged staff to adhere to its return-to-office policy. The online fashion retailer has told employees that it will start to take disciplinary action if they do not abide by its working rules. You can read more here.
3. Sainsbury’s is paying NatWest £125m to take its banking business off its hands. The agreement would see NatWest take on around 1 million customer accounts, as well as £1.4bn of unsecured personal loans, £1.1bn of credit card balances and £2.6bn of customer deposits. You can read more here.
4. The Times CEO Summit is happening today, featuring some of the biggest names in business. The billionaire head of Ineos Sir Jim Ratcliffe, the new boss of BT Allison Kirkby and GSK chief executive Dame Emma Walmsley are among this year’s attendees. You can read rolling coverage of the event here.
5. Officials have claimed that the final shows of the UK leg of Taylor Swift’s Eras Tour are expected to boost the economy by £300m. Barclays also predicts that fans have forked out almost £1bn across her 15 UK shows. Read more here.
Business Quotes
Inspiration from leaders
“What I’ve learned from running is that the time to push hard is when you’re hurting like crazy and you want to give up. Success is often just around the corner.”
– James Dyson
Business Thinker
Ideas on the future of business and leadership
1. 👩💻 The innovation challenge 👩💻
2. 😨 The rise of the far right alarms German business leaders 😨
3. 💪 “I thought investment banking was tough until I built a start-up” 💪
And finally…
Only a few weeks until the summer holidays kick into full gear. Ryanair has already experienced one of its busiest months ever in April and the appetite for travel has really shaken off those Covid blues.
Sky News has spoken to travel experts to compile a brilliant guide around money on holiday: where to buy it, how to avoid fees and one thing you must not do…
You can read the guide here.
The answer to today’s Business Question is Sarah Willingham.
