Why your business should have an AI innovation unit

In today’s business landscape, establishing an AI innovation unit is becoming increasingly important. For many companies, this dedicated team not only serves to address skill shortages but also positions the business to remain competitive as AI becomes a fundamental part of industry operations. By strategically leveraging AI, companies can tackle workforce gaps, enhance productivity, and ensure they keep pace with technological advancements.

An AI innovation unit in a business is a dedicated team or division focused on identifying, developing, and implementing artificial intelligence solutions that can drive innovation within the organization. This unit often brings together experts in AI, machine learning, data science, and software engineering to create solutions that align with business goals, improve efficiency, and offer a competitive edge. The AI innovation unit typically works on projects that explore new technologies, test prototypes, and push forward digital transformation initiatives, serving as a laboratory for experimentation and rapid iteration. It may be responsible for building algorithms to enhance customer experience, streamline operations, and uncover valuable insights from data, all while ensuring that AI is used ethically and responsibly within the company.

Furthermore, an AI innovation unit fosters a culture of experimentation and learning within the business, encouraging collaboration across different departments to identify AI applications that address real-world challenges. This unit often collaborates with external partners, like universities or tech firms, to stay at the forefront of emerging trends and cutting-edge technology. By balancing short-term project goals with long-term vision, the AI innovation unit can help the organization adopt AI-driven strategies systematically, transforming business processes, reducing costs, and enhancing overall productivity. In doing so, the unit enables the organization to remain agile and responsive in a rapidly evolving technological landscape, positioning it well for sustained growth and innovation.

One pressing reason for creating an AI innovation unit is the rapid aging of workforces in certain sectors. For example, in the UK’s financial advisory industry, a significant proportion of the workforce is nearing retirement, and there aren’t enough new entrants to replace the outgoing talent. That’s why I set up Stalwart Holdings to provide robo-advising in scale, but with a human touch.

Having said that, this problem isn't unique to financial services; other sectors, particularly those in developed regions with aging populations like Europe and Japan, face similar challenges. Without a dedicated AI unit, these industries risk falling behind due to a shortage of skilled labour. AI can serve as a scalable solution, helping organizations meet operational demands and maintain service quality even as the workforce diminishes.

The second reason to establish an AI innovation unit is rooted in competition. Just as having a website became essential for business legitimacy two decades ago, utilizing AI tools is becoming fundamental to survival and success in the modern market. Eventually, most leading companies will integrate AI into their operations, making it a necessity rather than an advantage. Those without an AI strategy may soon find themselves edged out by competitors who can offer faster, smarter, and more efficient services due to AI-enabled productivity.

An AI innovation unit’s mission should centre on enhancing productivity through AI-driven solutions, while keeping the entire organization aligned with advancements in AI. This team must continuously explore new ways to leverage AI to streamline processes, reduce costs, and improve the customer experience. By staying on top of the latest AI developments, this unit can act as the bridge between cutting-edge technology and everyday business applications, making sure the company evolves alongside technology.

Leadership of this unit is critical. The ideal leader should have a background in product design or in strategic innovation related to the company’s core operations, ensuring that they understand the practical applications of AI. They don’t need to be an AI expert themselves but should be supported by advisors who are familiar with the technology’s technical aspects. The leader’s role isn’t to develop new AI technologies—there are mega tech companies handling that—but to adapt and innovate existing AI solutions in ways that support the company’s unique objectives.

Staffing requirements for the AI unit depend largely on the size and nature of the business. In smaller companies, a lean team of tech-savvy individuals, perhaps a manager and one or two skilled computer science professionals, may suffice. However, as the size and complexity of a business grow, so do its staffing needs. A larger organization would benefit from a team that includes domain experts with in-depth knowledge of the industry. This approach ensures that AI solutions are tailored to meet both internal productivity goals and the expectations of customers. For very large companies, involving personnel who understand the company’s internal workings can be critical to ensuring AI-driven solutions work seamlessly across departments.

Determining where the AI unit fits within a company’s reporting structure depends on the business itself. In a tech-focused business, the AI unit would likely report to the Chief Technology Officer, given the importance of integrating AI into the core technical framework. In non-tech industries, it might be more appropriate for the AI unit to fall under the Research and Development (R&D) wing, potentially even reporting directly to a board member. This placement ensures the unit has the necessary oversight and strategic direction, whether it’s focusing on internal processes or on improving customer-facing services.

Beyond these operational considerations, there’s a strong case for companies to invest in AI-related training. As the CEO of a company and a university lecturer has noted, training employees in AI tools such as generative AI for customer service can significantly improve customer interactions. The educator recommends a balanced approach, where employees are trained to use AI while retaining the human touch that customers trust. Just as students are now learning to fact-check and personalize AI-generated information, employees can be trained to use AI tools in ways that reassure and engage customers, ensuring that AI is an asset rather than an alienating technology.

The creation of an AI innovation unit represents a strategic investment in the future. By establishing such a unit, businesses can tackle workforce challenges, improve productivity, and keep up with competitive pressures in a fast-evolving market. It’s a forward-thinking approach, positioning the company to thrive in an AI-driven world.