This week, I want to address something that is sitting on the desk of almost every SME leader I speak to right now and that many are finding difficult to think about clearly.
Small and medium-sized businesses are experiencing a wave of anxiety and it’s easy to see why.
In February 2026, Block, the fintech company formerly known as Square, announced it would lay off over 4,000 employees, nearly half its workforce. KPMG is integrating Claude AI across its Life Sciences and Financial Services practices.
And in what may be the most telling signal of all, KPMG pressured its own auditor, Grant Thornton UK, to reduce its fees, arguing that AI now handles much of the analytical work that once justified the invoice. Grant Thornton agreed — a 14% reduction, from $416,000 to $357,000 in a single year.
That is a precedent if ever there was one.
So when a business owner turns to me and says, as someone did recently, “all of this AI stuff that I am reading and hearing on the news is making me scared and anxious, so I avoid it,” I understand completely.
The anxiety and pressure surrounding AI are very real, amplified by constant headlines. Instead of just worrying, consider how to approach the situation proactively: focus on the actions within your control.
The Early Adopter Myth
There is a widely held belief that first movers always win. Move fast, adopt early, dominate the market. There is a lot of evidence to support this:
MySpace launched before Facebook and had 100 million users. It didn’t win.
Friendster preceded both of them and no longer exists.
Betamax was technically superior to VHS, yet it lost anyway.
Skype dominated video calling for years, was acquired by Microsoft, and then quickly lost ground to Zoom during the pandemic.
Nokia had smartphones before Apple and BlackBerry had the corporate mobile market comprehensively sewn up.
These examples highlight important lessons for business owners today.
It’s not about being first, as early adopters often carry the full cost of a technology’s immaturity, the bugs, the steep learning curves, the integrations that don’t yet work, the staff resistance, and the expensive groundwork that later adopters simply inherit.
In fact, this pattern has been studied for decades and shows a consistent pattern. Everett Rogers explained it well in his Diffusion of Innovations theory. He identified five groups: Innovators, Early Adopters, Early Majority, Late Majority, and Laggards.
The insight that gets overlooked is that the Early and Late Majority together represent 68% of all adopters and are the bulk of every successful technology’s user base, arriving when the technology has matured, when costs have fallen, when implementation is clearer, and when the risk of getting it wrong is considerably lower.
An example of a late majority would be Visa and Mastercard introduced contactless technology in the mid-2000s, but it wasn’t until the COVID-19 pandemic in 2020 that Retailers really encouraged its use, and businesses were forced to adopt Zoom to facilitate remote work.
The real danger isn’t being outside the majority; it’s delaying so long that resistance becomes more risky than change. The takeaway: falling behind poses greater risks than not being mainstream.
What This Actually Means for Your Business
SMEs with maybe ten, fifty, or two hundred employees can now test, adapt, and embed new ways of working in weeks, especially with the new AI tools and applications. Their agility is a real competitive advantage.
Interestingly, the businesses most exposed to AI disruption are not those that haven’t adopted Ai yet, but those whose value proposition is built primarily on tasks that AI can now perform faster, cheaper, and at scale-i.e translation agencies converting documents from one language to another and or generic copywriting and content agencies that charged for blogs, social posts, product descriptions, email sequences.
Which brings me to Jeff Bezos, who was once asked what would change in the next decade. He said that was the wrong question.
The more strategic question, he argued, is what will not change. His answer to Amazon was that customers would always want lower prices, faster delivery, and greater choice, so he built everything around those stable, enduring needs rather than chasing the new.
This is an important change in thinking.
For your business, the most valuable time you could spend right now is not researching AI tools, it’s asking:
What do my clients need that will not change in the next ten years?
What does my business provide that is irreplaceable, and my clients would feel the absence of it in a way that matters to them?
Where is our value so embedded in relationship, judgment, and trust that it sits beyond the reach of AI?
These crucial questions should be the starting point and foundation of your business strategy. Use them to focus your efforts on lasting value.
The Practical Question
With regard to AI specifically, don’t get caught up in finding the best or latest tools; focus on understanding the ecosystem your business already operates in. If your team operates primarily within Microsoft’s ecosystem, an AI tool like Microsoft 365 Copilot could be a consideration. If your workflows are built around Google, the same logic applies.
The important question is not which AI tool is best, but where work already happens in your organisation and how AI can be integrated into those environments rather than introduced as a separate system that demands additional time and effort. That is a much more manageable question than the headlines suggest.
This is a time to remain calm and prioritise strategic clarity rather than react to uncertainty or rapid change.
What I Am Asking You to Do
Pay attention to the headlines and stay informed, but remain focused on what truly matters for your business and what you ultimately want to achieve. The goal is not to react to every new development, but to embrace change in a way that allows your business to grow, adapt, and become stronger.
Don’t rush and panic-buy a strategy.
Instead, think clearly, calmly, and objectively about your business and focus on three questions:
1. Who are you really serving, and what do they need from you that will endure?
2. Which parts of your service could AI make more efficient, freeing you to focus on what only you can do?
3. What would your business look like if you built it around your clients’ enduring needs rather than the technology of the moment?
Build your business around what your clients will always need, not just the technology of the moment.
The AI age is real and already here. But the businesses that will look back on this period as the moment everything changed will not be the ones that moved fastest. They will be the ones who thought strategically and acted from clarity rather than from fear.
You have more time than the headlines suggest. Use it well.
If this has prompted a question about your own business, what endures, what is at risk, what needs rethinking, I’d be glad to hear it. Reply to this newsletter or connect with me directly.
Until we meet.
Morton
If this has prompted a question about your own business, what endures, what is at risk, what needs rethinking, I’d be glad to hear it. Reply to this newsletter or connect with me directly.: value@mortonpatterson.com
