Hours Saved Isn’t Productivity (How to Use AI to Make Your Business Worth More Without Growing Revenue)

So this year, my company's revenue actually went down and our profit went up. Now profit is one of the core things a buyer values and will actually pay for. So in a year that our business technically got smaller, it actually got more valuable. We cut about a $190,000 in overhead and AI is a big reason why. Nobody in my industry is saying that first part out loud.
Although, across the board, businesses are feeling the impacts of disruption that AI is making to overall markets, overall purchasing, how decision makers are making decisions. But the whole lesson of this episode is that in a year in which AI is actually disrupting top line, it can also help you build your bottom line. Today, I'm gonna show you the difference. Don't go anywhere. Welcome to the Woman Owned podcast.
Welcome to the Woman Owned podcast. I’m Eleanor Beaton and this show is for women who run real businesses and make real decisions. Here, we talk about revenue, leadership, and growth without hype, hustle, or internet nonsense. If you’re building something serious and you want clear thinking you can actually use, you're in the right place.
Welcome back to another episode of the Woman Owned podcast. And before we dive in to how you can use AI to not just become more personally productive, but actually to make your company more valuable, I want to share something really cool. So this episode is actually part of a larger series I'm building that is all about how you can build a business that you can sell. Now, you may have never thought before about selling your business, but a business that is easier to exit gives you a lot more optionality. And whether you plan to sell your business or not, I have built you a free tool.
It's called The 7-Figure Exit Scorecard. And here's why this matters. Too many women are waiting to find out what their business is worth at the moment they try to sell it. And by that time, you've already made a ton of decisions that impacted the value often for the worse. In many ways, if you wait, the value of your business has already been decided.
Our research at Safi Ventures shows exactly where that happens to women led businesses. So this scorecard allows you to see it now while you can still do something about it. You're gonna answer 12 questions. You're going to get a score, and it's gonna show you how sellable is your business today and where is that value leaking. So to get it, you're going to go to the Woman Owned Substack.
We are so excited about the Substack. Go to womanowned.substack.com. Womanowned.substack.com. Subscribe for free and that scorecard will land in your inbox. Do it now while you're listening.
Literally pause, key it into your phone, womanowned.substack.com. Subscribe, and you will get this exit scorecard ready for you by the time you finish this episode. Alright. So a couple of months ago, I started noticing this phenomenon, which is that I was hearing and experiencing so much about how AI was saving all of us so much time. But I also was seeing research after research after research and survey after survey after survey, which was showing that business productivity gains were minuscule compared to the amount of time and money everybody was investing into AI, and it didn't add up to me.
So what was ultimately happening was there was this productivity illusion. So people were thinking that AI was making them more productive, but it actually wasn't from a business perspective. So let's talk about what productivity actually is. Business productivity is always output divided by input. So if you as a CEO save hours doing something, it might boost your personal productivity, but it only actually boosts your business productivity if your output, i.e, your revenue grows or if the input shrinks.
So for example, you might hear of people raving about how they use this particular Claude skill to turn 1 blog post or 1 podcast episode into a blog post on 50 carousels. And that was just so amazing. Well, that is only going to boost productivity if that helped you grow revenue or it allowed you to cut costs through potentially eliminating a position used to pay for, eliminating tools used to pay for, et cetera. That is the only way in which that turns into business productivity. And a more productive business is worth more.
A more productive person working inside a business does not necessarily make the business more valuable. Research, the most recent research, this was released last month in October of 9,000 global executives across 7 countries. The vast majority of whom are using AI estimated that AI was only generating about a 0.2% annual lift in productivity. I want you to think about the amount of time and energy and money that you are investing into AI And the most recent research is that across the board, it is showing a 0.2% lift in annual productivity. Now as I started researching this, it became really apparent why.
And actually, this is not the first time this has happened. So there's something called the Solow effect. Solow was an MIT Nobel Prize winning economist. And his research found that when computers sort of hit the market, people loved them. They were like this magic tool, and they were increasing personal productivity.
But they actually had zero impact on business and economic activity for close to 15 years. Okay? So between 1973 and 1995, right through the arrival of the IBM PC and the Mac, the IBM PC hit at about 1981, the Mac at about 1984. Businesses were investing in computing systems and computers everywhere and the economy got no more productive. Zero productivity gains in The US economy.
The payoff came late 15 years after the advent of the computer. So productivity finally surged after 1995 averaging 2.8% a year lift from 1996 to 2,000. So it's 15 years of computers being in the office. There was zero productivity gains. This also happened with electricity.
So Stanford economic historian Paul David showed that factories... That once electricity hit, factories just swapped electric motors in for the steam engine. They kept the old layout. Nothing changed. There was no impact on productivity.
This is the exact same thing that we are seeing in AI. It's probably the exact same thing you are seeing in AI. You may feel personally more productive, and it actually may be saving you hours. But it may be having very little impact on business productivity. So it's not actually creating the lift that you want it to create without the insight that I'm about to share in this episode.
So across the advent of electricity into the business world, the advent of computers into the business world, and now the advent of AI into the business world, the core thing that allows it to make a company more productive is when and only when you completely redesign your workflow with the technology. Alright? With the technology. So for instance, in the 19 twenties, about 40 years after the first power station, this is when a new generation of managers started to rebuild their factories around a motor on every machine. Right?
And before that, that's what electricity allowed. So most businesses have done that swap. You've swapped out the steam engine for electricity. You've swapped out the calculator for the computer. Like, you've made that swap.
But the problem, and if you're not experiencing true profit growth, top line growth, like growing the output or shrinking the input, it's because you haven't yet redesigned the workflow. And this part is really really critical. Rather, you're layering AI on top of your old workflow. You have the same workflows with AI bolted on. That's cool and interesting and fun and, oh my god, it can do this. It can do this. It can do this, But it's not going to drive gains for you. And we've seen examples of this. And this absolutely mirrors my own experience that I wanna share with you here. So when I first started really becoming more of a power user of AI, Initially, AI to me was like a fish on a bicycle.
Like, oh my gosh. It's so amazing. It can do this. It can do this. It can do this. And I was really using AI initially as like a strategic thought partner. You know, help me think through this. Think with AI. Like, help me brainstorm this. Pretend you are Chris Voss and help me negotiate this contract as an example. So this were... Was using AI as a strategic thought partner. AI, what's the meaning of life? And I mean, I know a lot of us had those. Right?
That's initially how I was using it. I was using it to brainstorm. I was using it to think through big questions. I was using it to role play with advisers. And it was impressive. Right? There was no question. It's like a fish on a bicycle. It was very, very impressive, and it was not boosting my company's productivity. Not at all. Not at all. When you really looked at it, it was not... It was doing really cool stuff. And I felt like I could do so much more, and my personal productivity soared. The business productivity was not soaring.
What actually worked... So I started to become like, okay, this isn't working. And I started to... At the same time as this was happening, you know, for any CEO right now, And I think a lot of CEOs are actually not being honest about what's happening in the marketplace right now. So there are absolutely companies that are growing, and there are absolutely companies that are experiencing big changes in their industries. So this doesn't impact all industries, but it certainly impacts some and certainly has impacted our industry this year.
So really seeing changes in top line revenue as you are adjusting to how buyers are, for instance, in our space buying advisory differently, how they're thinking about it. So we started to see those changes and big shifts in the labor market are happening as well. And you can see that. You've got major influencers in the tech space being like, if you have a job in the tech space, hold on to it because the economy is shedding jobs related to AI. And so for us, we're seeing both of these things.
As a CEO, I'm looking at, okay. This is interesting. Like, AI is actually doing things that people were doing in some areas of the business, and customers are buying differently. And so if I just try to... As I was, like, bolting AI on top of that, it wasn't really doing much good for me.
What really helped was when I started with the customer journey itself. So I started thinking through, like, what does our customer journey look like? Like, let's map out our customer journey from the time that they enter our world to the time they complete with us as a customer. And I started to map out that customer journey, and then I started to work with AI to automate those processes. And what that meant ultimately was that I redesigned the workflow.
There were ways that we were doing things that had to do with having, a tech stack that we'd outgrown. You end up doing things because a person is doing it. So we started redesigning the workflow. I redesigned the workflow to streamline it. And then based on that, rebuilt the tech stack and then bolted AI on top of that.
We redesigned the workflow before we bolted AI on top of it. So an example would be... So I'll just give you an example because I shared this with our operators recently, and they're like, how do you get started? So I always get started with things that annoy me. We couldn't tell. There wasn't an easy way to tell when somebody had signed their contract to become a new client. And so you would see, like, we would know that somebody was supposed to onboard, but the contract hadn't come in. And so somebody would ask, the product owner would ask in Slack, hey, just checking. Has so and so signed their contract yet? And then we'd have to go and check.
Well, that was a place where I restarted. I was like, this shouldn't be happening. And so I redesigned that workflow, started there. How can we automate this process? And then basically built backwards and forwards to a completely redesigned tech stack.
So the result is we were able to cut our tech stack, like, dramatically simplify our tech stack and dramatically reduce the amount of overhead needed to serve the same number of clients and clientele. And this ended up with us cutting a $190,000 out of overhead in a single year. And what this meant was that a much simpler business with more in profit in a harder year. So this was in a year in which our top line revenue fell a little bit, but our profit went up and we dramatically simplified the business. That is an increase in business productivity.
It makes the company worth more, so it boosts the value of the business. This is how you use AI to truly cut costs and to drive productivity. Now, when you think about how to do this practically speaking, you know, when you're looking at how you start to think about AI, I always... Again, I go back to the customer journey. The most important workflow in any company is your customer's journey. That's why your business exists to serve a customer. What is their journey through the business? What do you want to have happen? And then based on that, how can you start to redesign your workflow for that and then build your tech stack around that? So I wanna close the loop here.
Why does this boost enterprise value? So the next 8 weeks we’re really - because we just released our working paper on women entrepreneurs and enterprise value. So, you know, women have been starting businesses more than ever before. We're not exiting them and that all the income we're generating isn't necessarily translating into enterprise value that we gain. So how is this entire podcast episode about enterprise value? Right? Like, what's the connection? Well, a buyer isn't gonna pay for the hours that you as a CEO saved. They are paying for things like your profit, reliable profit, documented systems, and a business that doesn't depend on you.
When you use AI to support a workflow redesign, when you redesign your workflows so that you can really leverage AI, not to save you time necessarily, but also to boost your company's productivity. AI can absolutely build all three. It can help you increase profit. It can help you streamline your systems, and it can help you reduce founder dependence. All of which are going to boost the enterprise value of your company and make your company more exitable.
This is how you start to build a 7-figure exit without 7-figure revenue. Now this is exactly what our research is about. Safi's working paper, which we released last week is called The Good Faith Gap. And this looks at where women led businesses, where the business you run, where you start to lose the enterprise value that you could have and how to keep it. So the decisions that you are making today, whether you've thought about exiting your business or not, the decisions that you are making today are impacting how valuable your company is.
And I think that's a conversation that we as women entrepreneurs are not having enough. So a couple of notes. I'm gonna be teaching this live. So on Thursday, December 3, I'm hosting a masterclass for paid members of the Woman Owned Substack. It's called How to Have a 7-Figure Exit Without a 7-Figure Revenue.
And I'm going to walk you through what buyers actually pay for, where the value is leaking in your business right now, and the first moves you can make right now to make your business more sellable. Whether you want to sell your business or not, having the optionality and the freedom to do that, having your business be an actual asset is incredibly valuable. This is about a new era of wealth building for women entrepreneurs. It's about getting paid three times for the work you do today, for the systems that produce that work reliably and at scale. And then the third dimension is about having a company that is valuable as an asset.
So to access all of this, I encourage you to go to womanowned.substack.com to first subscribe for free. And then if you upgrade to our operator level, you're going to have access to that masterclass and so much more. I think the leadership frame here, and I do wanna share. In advisory, we have been having in our Jewel business advisory tier, that’s my advisory that I do with women-led businesses. And
we had Bridget who is the product owner of the Jewel Business Advisory. She led a phenomenal AI assembly recently where we had operators really come in and show how they're using AI to drive productivity growth in their companies, how they're using it to cut overhead, how they're using it to not have to make hires they might have needed to make six months ago, how they're using it to grow revenue. It was a phenomenal conversation. And one of the big things that was coming up was the challenge sometimes over not replacing jobs or actually cutting jobs.
And one of the things that came up was is that ethical to do? And all I can say is I think as a CEO, a CEO who is unwilling to fire by the way, or unwilling to make personnel decisions, you are not doing your job. You are not doing your job. The workforce, our entire economy is in a place of incredible dynamism right now. Massive changes. And as a leader, you need to approach these changes with open eyes and an open heart. Yes. Anchored in your values, but also open eyes and open heart. You do not wanna be a Luddite or a dinosaur. This becomes a leadership conversation, not an ethics conversation.
So this is something we are actively looking at. We're actively discussing with our advisory members, which has been very, very cool. Alright. If you got value from this episode and you wanna go deeper, like I said, go to Woman Owned on Substack. We just launched the Woman Owned Substack.
I have been wanting a place like a home. So I know you listen to the podcast regularly, which I so appreciate. And we often introduce topics where there's an opportunity to go deeper or maybe you wanna scroll through or see this in written format as an example. So if you go to the woman owned Substack, you'll see this podcast, but you'll also see an essay that I wrote that accompanies it. And in addition, you'll see there are opportunities.
So you can get that as a free subscriber. It's totally for free. And then actually, you don't even have to be a subscriber. You can see it. If you wanna be a free subscriber, we also have your 7-Figure Exit Scorecards. You can opt in to get that, and that just has you be subscribed to the Substack. And then if you wanna become an operator, it's a $197 membership for a year. This week for paid members, I've also written a full breakdown how Safi cut a $190,000 in overhead. In a year, revenue went down line by line.
So we'll really walk you through how we did that. And we didn't cut any service. We were able to leverage AI to reduce that overhead, which meant that our profit actually went up when revenue went down, which is very exciting. And that's a number that really matters. I will walk you through exactly where we cut, what we rebuilt, and how our profit went up when revenue went down.
And then I'm gonna give you a simple test that you can run-in your own costs that you can find your version of this. Again, paid membership is $197 a year. It's gonna get you that essay. It's gonna get you a new practical piece every single week, and you're going to have access to that December 3rd masterclass, How to Have a 7-Figure Exit Without 7-Figure Revenue. Alright.
I'm so glad that you were here. I know that I went through a ton with you. So head over to Substack because I've said 55,000,000 times this episode. But also, if you want access to the research, it's totally free and ungated. Our working paper, The Good Faith Gap, How Women Entrepreneurs Lose Enterprise Value at the Moment of Sale.
You can get that at safiventures.co. So if you go to our website, you will see a link to the research paper. We are entering a new era of economic power for women entrepreneurs, and this isn't just about selling more. It's not just about owning our IP and leveraging our systems. It's about building our companies into assets that we can transfer.
That is a huge untapped source of wealth for women entrepreneurs, and we really wanna start popularizing this conversation, making sure every single woman sees her business as a potential exitable asset whether you choose to sell or not. Alright. Have an awesome week. We will see you back here next week. Talk to you later.
If you’d like a seasoned POV on how this applies to your business, you can learn about my private diagnostic at SafiMedia.co/POV. Otherwise, thanks for listening and I’ll see you next time.