Does AI help or hinder business growth?

A few weeks ago I was chatting to friend Giorgia Lugarini about how misguided assumptions about business growth plus AI is actively limiting growth for many SMEs.

Giorgia is a Fractional CMO and growth consultant. We agreed that AI is making it easier than ever to do more, faster, especially within the marketing space.

Giorgia pointed out that more of the wrong thing is still the wrong thing, and without a strong underlying strategy we still won't see effective growth. I agreed, but raised the challenge I see all the time - businesses struggle to create a coherent strategy up front, and often need to experiment and try things in order to learn and develop a strategy over time.

It's chicken and egg - Giorgia knows businesses need a strong strategy in order to grow, but I know businesses need to start growing in order to develop a strategy.

Let's start with what good growth actually looks like, before we dive into how AI changes things.

T: How often do you see businesses doing all the right things tactically but still not growing?

G: I’ve seen this quite often, and it usually stems from a fundamental dismissal of marketing as a key business function and growth driver to a supporting role - posting pretty pictures on social etc.

A business might have a great team, fab agency and beautiful content, but there’s a huge gap between their marketing activity and their actual business direction.

T: If you could change one assumption about what drives growth, what would it be?

G: I’d change the idea that growth is solely a marketing or sales problem to solve. Marketing is a megaphone - it only amplifies what’s already there.

If growth is stalling, it might not be because the ads are bad or the sales guys are lazy, it might just be that the offer needs to evolve to stay competitive in a crowded market.

I’d also love to shift the mindset from “we need more leads/sales” to “how can we be more valuable for our customers?”

In a world of endless choice, you can't really market your way around a product that has lost its spark, but when you focus on being truly valuable, achieving growth becomes a whole lot easier.

I know that my business felt much more fluid and fun when I focussed on identifying real problems and coming up with ideas that create value. And Giorgia's experience teaches us that this is what actually contributes to sustainable business growth, too.

Growth is about making sure there is a strong link between your offering and your customer's needs, and then using effective marketing to amplify that message.

That marketing stage is something that many business owners struggle to prioritise, and so many are looking to AI to help.

T: From a growth perspective, what are some ways you’ve seen people using AI?

G: Where I see AI working beautifully in business is when it’s used to improve output quality rather than just quantity. For example, instead of asking AI to create a post for Instagram for every day of the week, ask it to come up with post ideas based on the best performing creative from past results in your account. Then take those ideas and develop them into something beautiful and engaging using free tools like Canva or Capcut.

Another favourite application for me is using AI to aid business critical thinking. Use it for market research and competitor analysis to see if anyone is outsmarting you or undercutting you and see if you should improve your offering. Or crawl the internet for your own customer reviews and find trends within them to highlight areas of improvement for your product or services.

AI is helping making execution faster, meaning that business owners and marketers can now perform tasks that weren’t within their remit before. The talk around AI for business can feel totally overwhelming. Real growth is the result of many different elements moving in harmony, and that’s something no AI tool can do for any business, not yet, if ever.

T: What's the risk in using AI for growth without a strong strategy?

G: The risk is simply doing more of the wrong thing. Just because we have the tools to launch a newsletter in five minutes doesn't mean a newsletter is what your audience wants and what will drive results for your business.

If we produce endless amounts of content, try a million different tools, campaigns and channels without a clear strategy and a valid target we’re just creating more noise and adding to the confusion and brain fog.

T: So AI isn't the silver bullet we've been led to believe?

G: I find myself gently reminding leaders that AI, while incredible, isn't a magic wand. If a business is struggling, it’s usually a symptom of something deeper—maybe the market has shifted, or the organisational structure needs a change.

I like to use the analogy that someone struggling with their mental health can’t solely rely on 'happy distractions' like a holiday or a glass of wine to get better; they need to look inward and work on how they perceive life and happiness. Leading a business is a bit like that.

Before looking for the latest hack, be it AI or anything else, it’s worth taking a moment to look at the inner workings of the business model and its operations.

AI can’t fix a business, and while it can certainly help a healthy business scale, it can easily lead badly managed businesses to failure when used blindly.

This all rings true to me. I've certainly found myself in situations where I've been trying to grow my business by throwing more fuel into the same marketing furnace, without questioning whether all of my efforts are really aligned to a meaningful bigger picture.

But that's one thing that I and many other small business owners struggle with: I find it way too risky to spend all that time front-loading a business strategy and marketing plan which is meant to serve me for the next however many years, without validating or proving any of it will work.

The philosophy of starting small and iterating extends beyond tactical operations and into business strategy. A bullet-proof business strategy is one that's been tried and tested, put in front of prospects and criticised, and made stronger as a result. This takes time, and small incremental steps.

Taking this first step can be difficult, and requires a bit of bravery to get started.

T: If I'm a leader who knows something isn't working - where do I start?

G: It’s a tough spot to be in, and it requires a bit of brave self-reflection.

I always suggest starting with your most important stakeholders: your customers and your team. Be open to criticism and just ask them what they think can be improved.

Do a gentle review of effort and spending. Are you still running activities due to legacy that just aren't making a difference anymore? Is there an old subscription you’re still paying for?

Sometimes, growth isn't driven by adding more but by clearing away what's no longer serving you.

I've written before about clearing away what's no longer serving you, and it's fantastic advice here. Chucking AI into the fray isn't going to magically clean everything up and bring you out charging in the right direction.

We can't use AI to grow our business if we don't have a strong strategy, but we can't develop a strong strategy without a bit of trial and error. That tension doesn't have to be a trap if we enter into it with a sense of curiosity and possibility. And AI can actually help with with that trial and error process.

Here's where to start:

• Use AI to create a business with purpose
• Understand problems better with AI
• Identify blind spots with AI
• Use AI to be more creative
• Strengthen your idea with AI

Giorgia is a fractional CMO and growth consultant based in Manchester, UK. Find out more on Giorgia's LinkedIn.