AI Is Sniffing Around Your P&L. Let It.
[6 min read]
Philip Mordecai, Florido Consulting
If you run an SME right now, you can feel it. The thing about growth is that it feels very different in stable markets than it does in uncertain ones. In stable markets, growth feels expansive. In uncertain ones, it feels heavy.
Over the past few years, most SME leaders have felt that weight. Revenue may still be moving, but each additional contract seems to carry more operational drag with it. More coordination. More reporting. More oversight. What used to feel like momentum now feels like management.
For a long time, that was accepted as the cost of scaling. Output increased, and headcount followed. The relationship was linear, and nobody questioned it too closely.
AI changes that relationship. Not dramatically. Not theatrically. But structurally.
And once you see it, you can’t unsee it. For those who use social media = “Almost missed it”
The Shift Isn’t Loud
Operational friction is that it hides inside success. When a business is growing, inefficiency is often masked by momentum. Teams work harder. Extra steps are absorbed. Manual processes are tolerated because revenue is still coming in.
But friction compounds quietly. Every duplicated input. Every spreadsheet is reconciled twice. Every customer query passes through three inboxes before landing in the right one. None of these feels catastrophic on their own. Together, they shape your cost base.
What AI has started to do, in the hands of disciplined operators, is not replace judgment but remove repetition. Lead qualification happens before a salesperson touches it. Reporting is drafted before finance assembles it. Margin slippage appears in real time rather than at month-end.
Nothing about that is glamorous. But it changes how decisions are made.
And when work moves differently, margins move with it. This is an opportunity and is real value to the cashflow…
The Shift From Experimentation to Integration
New technology cycles is that early adoption is noisy. Tools are tested. Pilots are run. Panels are attended. For a while, activity substitutes for impact.
In 2026, the difference between firms is no longer who has tried AI. It’s who has embedded it.
Experimentation lives at the edges. Integration lives in workflows.
One creates demonstrations. The other creates operating leverage.
When AI sits inside the flow of how sales, finance, and operations actually function, output begins to detach from hours worked. A team can handle more volume without proportionally increasing headcount. Decisions move faster because information surfaces earlier. Capacity expands without a corresponding expansion in cost.
That is not a technology story. It is an economic one. But why does this matter now?
The Anxiety Is Understandable
The thing about productivity gains is that they behave very differently in environments of trust versus environments of fear. In environments of fear, efficiency feels dangerous. In environments of trust, efficiency feels like progress.
Over the past two years, AI has often been framed as a replacement technology. A strategy. A revolution. A way to “do more with less.” That language lands differently inside a company than it does on a conference stage. When people hear “less,” they instinctively wonder whether they are part of it. That’s when culture starts to tighten. Conversations become guarded. Efficiency becomes something you approach cautiously rather than celebrate.
Most founders I speak to aren’t trying to create that reaction. They’ve invested years building capable teams. They don’t want to introduce tools that quietly fracture morale. But intention and perception aren’t always aligned. If employees suspect that visible time savings could make their role smaller, they adapt accordingly.
And here’s the uncomfortable part.
When people don’t feel safe, they don’t surface efficiency. They absorb it. They fill the reclaimed time with safe work. They keep busy. The gain exists, but it never fully converts into output. It sits in the system as hidden capacity rather than released momentum.
In cultures where trust is explicit, the opposite happens. Time freed by automation is treated as an asset to be reinvested. The operations head uses it to improve systems. Finance uses it to model scenarios. Marketing uses it to sharpen positioning instead of multiplying activity. The technology doesn’t replace the person; it expands the person’s contribution.
The difference isn’t the software. It’s whether people believe that becoming more efficient makes them more valuable or more vulnerable.
AI can manufacture time. That’s now clear.
Whether that time turns into growth depends almost entirely on the culture that receives it.
“AI’s real output isn’t cost savings, it’s time. The question for any leadership team is what your culture does with that time. In an insecure culture, people protect it because they fear what visibility might cost them. In a confident culture, they reinvest it into growth. The technology doesn’t decide which one you get. Leadership does.”
The Competitive Reality
Structural cost advantage is that it rarely announces itself. Companies do not publish press releases explaining that they have reduced coordination drag or shortened reporting cycles. From the outside, nothing appears dramatically different.
But inside, the economics shift.
If two firms serve the same market and one can handle materially more demand without scaling overhead at the same rate, the difference accumulates. One gains pricing flexibility. One absorbs shocks with less strain. One has room to invest when others hesitate.
Over time, that difference becomes visible in cash flow, in resilience, and eventually in valuation.
AI is not creating that gap by itself. Discipline is. But AI is accelerating it.
The Practical Question
Transformation language often obscures simple problems. Most SMEs do not need sweeping reinvention. They need clarity about where work is unnecessarily duplicated, delayed, or manually stitched together.
Start with workflow, not technology.
Map how effort is allocated. Identify where it stalls. Notice where the same data is entered twice. Observe where human judgment is being used for routine classification rather than real decision-making.
Those are the natural entry points.
Fix a small number of friction points properly, and the system begins to feel lighter. Decision cycles shorten. Teams spend more time applying expertise and less time managing processes.
That lightness is the signal that structural improvement is taking place.
The Valuation Layer
Markets eventually price in operating quality. Growth without leverage looks different from growth with it. Investors may not always use the language of automation maturity, but they do assess scalability, resilience, and cost structure.
A business that can absorb 30 per cent more demand without materially increasing fixed costs is inherently stronger than one that cannot. That strength carries strategic optionality. It allows for patience when markets tighten and acceleration when opportunities appear.
AI, embedded properly, contributes to that optionality.
Not as a headline feature, but as infrastructure.
So What Does “Let It” Mean?
When I say “AI is sniffing around your P&L. Let it,” I am not suggesting surrender to automation. I am suggesting openness to scrutiny.
Let it examine repetitive triage.
Let it surface early financial signals.
Let it draft the work that no one enjoys drafting.
Let it remove the coordination drag that adds cost but not value.
Keep judgment, relationships, and strategy firmly human. But do not defend inefficiency simply because it is familiar.
In 2026, AI will be present in your market. It is reducing structural cost somewhere. The only real question is whether that reduction is happening inside your organisation or inside your competitor’s.
Final reflection
The thing about this moment is that it is less dramatic than predicted and more consequential than expected.
AI is not rewriting entire industries overnight. It is reshaping cost structures incrementally. It is changing coordination and workflows. It is creating time where there was once only effort.
For SME leaders who have felt growth becoming heavier year after year, that shift matters.
Used carefully, AI does not destabilise a business. It steadies it. It reduces unnecessary load. It makes the scale less fragile and the margin less accidental.
That is not a revolution. It is a structural improvement. And structural improvement is what compounds.
🟪 Contributor - Philip Mordecai
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