This intelligence is not artificial: Employee-owned companies are uniquely structured to succeed in harnessing AI where traditional corporations struggle. At work is the alignment of interests that employee ownership provides, which reduces concerns about supplanting employees’ roles and capabilities as companies begin experimenting with this powerful technology. Employee owners are inspired, not threatened, by opportunities to better leverage technology tools for increased productivity, professional development, and corporate performance.

Don’t take my word for it. Researchers studying employee stock ownership plans point to the parallels between ESOPs’ structural characteristics and known predictors of successful technology adoption. Chief among these are an employee-owned culture that favors high trust, active employee participation in decision-making, substantial investment in training, and aligned incentives for success.

Michael Zimmer and Trevyr Meade study and advise on employee ownership and AI as co-founders and managing partners of the consultancy ownAI. They believe ESOPs’ institutional framework sets them apart from traditional companies by empowering workers and ensuring they share in productivity gains from technological change.

“It astonishingly dovetails with the strengths of employee-owned firms around honoring the voice of frontline employees, having those opinions matter, and possessing the autonomy to actually do things,” maintains Zimmer, who cofounded the nonprofit Illinois Center for Employee Ownership.

They also believe research associating employee ownership with innovation and technology adoption challenges assumptions that ESOPs might be laggards, because of a theorized employee risk aversion or other factors. Instead, they contend that, as Meade puts it, “successful AI adoption starts with your team and once they’re onboard, they become your AI advantage.”

Most CEOs who are members of the National Conference of Employee Ownership’s CEO network say they have drafted or are preparing policies about AI use. While they agree that AI will change how their businesses operate, its impact will differ depending on the ESOP.

They see definite advantages to AI, including the ability to quickly generate content that at its starting point is quite strong. One CEO confided that he uses ChatGPT more than any other tool in his day-to-day work. Yet they also voice complaints, including that content-creating AI tools tend to be consistently inaccurate.

Still, these CEOs acknowledge AI will play an increasingly central role in their continued digital transformation. They anticipate it will help enrich operational efficiency, improve decision-making, and sustain their long-term futures – while also enhancing their advantage in building trust in AI because success benefits all employee-owners.

To hasten its adoption, more ESOPs are adopting an AI roadmap. With it, they’re educating employees about AI capabilities and their safe use; experimenting with AI tools to determine how they can overcome business challenges; relating success stories about AI’s impact; and establishing dashboards with their ESOP’s metrics, among other early applications.

Success stories are emerging as ESOP executives recount their AI experiences, especially at industry conferences where AI is an especially hot topic. “It’s incredible what ESOPs are trying and what’s working for them,” says Meade. “Not everything works but simply sharing knowledge helps drive them forward.”

For instance, where it once took a medium-sized manufacturing ESOP days to manually conduct repurchasing forecasting, an AI-powered scenario analysis now automatically handles it in minutes. Further, it identified a $2 million cash flow gap three years in advance. Village Labs, which builds AI software for ESOPs, also cites a professional services ESOP that used an AI-powered tool to automate statements and communications, paring its administrative time by 80% while improving participant engagement and reducing communication errors.

Indeed, the advisory firm figures the typical return on investment for AI implementations by ESOPs to be time savings of 50-80% in reduced manual tasks, and a 30-50% cost reduction from lower administrative costs, among other ROI advantages.

Frankly, it’s imperative for employee-owned companies to start experimenting with and adopting AI – if only to discover for themselves the competitive advantages it offers. As a long-time advisor and board member to family and private businesses, I’ve long warned of the risks of not innovating and remaining current. The power of AI to transform business processes is remarkable, and the risk of being out-competed by firms who early on figure out how to apply AI is considerable.

I’ve long contended that this will be the Decade of the ESOP, because interest in employee ownership has increased on several fronts. I believe adoption of AI by ESOPs will further strengthen that likelihood. Because, quite honestly, AI helps empower people who power and own the company.