Why focusing on cost-cutting during the AI revolution is a strategic mistake

Fast Company Tech

by Enrique Dans

February 24, 2026

AI-Generated Deep Dive Summary

Focusing solely on cost-cutting during the AI revolution is a strategic mistake that risks missing opportunities for true innovation. While many organizations deploy AI to automate tasks like call center operations or reduce back-office staff, this narrow approach prioritizes short-term efficiency over long-term growth. The article argues that AI is not just a tool for cutting costs but a rapidly evolving general-purpose technology with the potential to transform industries. By focusing on automation and headcount reduction, companies may optimize for the present while overlooking the transformative possibilities of AI. Historically, during technological inflections like the rise of computers, organizations often struggled to measure productivity gains because they were using new tools to enhance outdated processes rather than redesigning workflows entirely. This "productivity paradox" highlights how traditional metrics fail to capture the diffuse and uneven impact of innovation. Today, AI's effects are similarly asymmetrical—some teams achieve dramatic improvements, while others see minimal gains or even negative outcomes due to poor implementation. The article emphasizes that AI's value extends far beyond cost savings. It is a catalyst for rethinking workflows, creating new products, and delegating decisions to intelligent systems. Companies should treat AI as an exploratory tool, encouraging experimentation and innovation rather than restricting its use to narrow efficiency-driven projects. This mindset builds institutional fluency and uncovers unexpected opportunities that cost-cutting initiatives alone cannot reveal. For those interested in design, this perspective is particularly relevant. The design process thrives on exploration and creativity, and leveraging AI as a generative tool can unlock new possibilities for innovation. By focusing on exploitation (cost reduction) instead of exploration (new capabilities), organizations risk stifling their ability to adapt and

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Originally published on Fast Company Tech on 2/24/2026