Paul’s Perspective:
This new framework cuts through the hype and provides a clear lens for leaders to determine where their businesses truly stand in the AI landscape. Knowing how exposed you are—and where to invest—can help you prioritize competitive strategies and safeguard growth in the shifting economy.
Key Points in Video:
- AI is rapidly reducing the cost of tokenizable cognitive work—such as drafting, analysis, and coding—making small teams much more productive.
- Mid-tier digital agencies, traditionally reliant on cognitive tasks, are getting squeezed by both low-end AI and high-end incumbents.
- Physical businesses, those with tangible, on-site service components, are shielded from direct AI disruption.
- Firms must diagnose their market position to strategically invest in the right AI tools or initiatives.
Strategic Actions:
- Identify which of the three layers (physical, cognitive, judgment) your core business activities fall under.
- Assess your company’s vulnerability to AI based on your layer positioning.
- Recognize if you are in the mid-tier digital services segment, and evaluate the risk posed by AI commoditizing cognitive work.
- Consider strategies to defend or enhance physical and judgment-driven aspects of your business.
- Plan targeted AI investments aligned with your unique market position and value proposition.
The Bottom Line:
- Understanding the three layers of business work is critical for assessing your company’s vulnerability to AI disruption.
- Physical, local businesses are less exposed than mid-tier digital firms, which face greater risk as AI commoditizes cognitive tasks.
Dive deeper > Source Video:
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