cost of inaction for AI strategy
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33 Critical Cost of Inaction (CoI) Risks to Strengthen Your Artificial Intelligence Strategy for Executives

ByLaurel Papworth

Discover 33 critical Cost of Inaction (CoI) risks you can add to your Artificial Intelligence strategy to future-proof your workforce, customers, and governance for Executives and CEOs in Australia

If you’re writing an Artificial Intelligence (AI) strategy or preparing a digital transformation plan, it’s vital to go beyond just forecasting the benefits — you must also clearly articulate the Cost of Inaction (CoI). Ignoring the risks of delaying AI adoption can have serious impacts on workforce morale, productivity, innovation, customer satisfaction, market relevance, and governance. For executives and CEOs in Australia

In this article and video, I’ve listed 33 critical Cost of Inaction points you can include directly in your AI strategy. These risks will help you future-proof your organisation, create executive alignment, and ensure your leadership team fully understands why urgent action matters. Use this list to build a stronger, more compelling case for AI in your business.

🌟 1. Workforce and Talent Risks

  1. Talent attrition due to manual, repetitive tasks.
  2. Employer brand weakens without AI adoption.
  3. Staff use AI tools unofficially, increasing compliance risks.
  4. Policy vacuum or “no AI allowed” rules create shadow AI usage.
  5. Morale drains from repetitive, low-value work.
  6. Remaining workforce may lack top-tier talent motivation.
  7. Leadership perceived as stagnant and out of touch (e.g., Kodak effect).

🌟 2. Productivity and Efficiency Risks

  1. Workflow speeds remain slow; productivity flatlines.
  2. Critical tasks take weeks instead of hours without AI.
  3. Meetings stay inefficient without AI summarisation and action extraction.
  4. Manual staff onboarding persists instead of AI-enhanced onboarding.
  5. Operating margins shrink as competitors automate.
  6. Lagging behind in adopting agentic workflows while competitors surge ahead.

🌟 3. Innovation and Strategic Blindspots

  1. Innovation stalls without AI-driven insights and efficiencies.
  2. Strategic blindspots increase when the same patterns repeat.
  3. Decision-making cycles slow down without AI augmentation (e.g., Tree of Thoughts prompting).
  4. Long-term growth potential declines without embedding AI.
  5. ESG, digital transformation, and digital storytelling efforts falter without AI integration.

🌟 4. Customer and Market Impact

  1. Customers switch to AI-enabled competitors unknowingly (better UX, intelligent tools).
  2. Market share erodes due to slower innovation and service.
  3. Customer satisfaction drops with outdated chatbot and support tech.
  4. Brand loses relevance in digital-first markets.
  5. Missed opportunities for new revenue streams, products, and services driven by AI insights.

🌟 5. Data and Risk Management Failures

  1. Organisational data remains underutilised (“goldmine” left untouched).
  2. Human errors (hallucinations) increase without AI double-checks.
  3. Compliance risks grow without AI-assisted monitoring and governance.
  4. Regulatory reporting and audit trails stay weak and human-dependent.
  5. Shareholder confidence erodes due to lack of visible AI adoption.

🌟 6. Reputation and Governance Risks

  1. Investor relations suffer without clear AI communication strategies.
  2. Industry analysts favour AI-first companies, reducing visibility and influence.
  3. Organisation becomes reactive instead of proactive toward technological change.
  4. Regulatory bodies may force sudden AI adoption, creating chaos.
  5. Mergers and acquisitions become harder when AI-readiness is lacking.

Transcript of Cost of Inaction for AI Strategy

Hi, my name’s Laurel Papworth, and I’m a lecturer and course facilitator in Artificial Intelligence. If
you’re writing an AI strategy, you’ll almost certainly have a return on investment section for your
strategy and a cost of inaction. So I want to go through about two dozen cost of inactions for your AI
strategy so that you have a clear list that you can prioritise and decide which ones, I guess, are
important for you.


Now, I am I’m in a hotel in Brisbane. I’m teaching here for the next few days, and so there are strange
noises, but I really wanted to get this done. So let’s do it now.


WORKFORCE and TALENT: First, talent acquisition, HR, employer branding, those things. The talent
leaves because they’re being made to manually transcribe meeting minutes, and it takes them an hour
to do it, and their mate across the road has an AI doing it in seconds, and they’re like, Why can’t I do
that? Your employer branding will weaken because staff will be like, Oh, what AI are you seeing? I’m
good with AI. And then, No, we don’t use AI here. Of course, staff are using AI without training. That’s
me, by the way, hint, hint. But also without a policy, or the policy is, “Don’t use AI”, or, “Our clients won’t
let us use AI”, or, “The government has said no to AI”, and then they’re using it anyway (hello, SIGNAL),
and that puts you in a compliance and regulation risk area. Uploading documents to fine-tune an AI is
something that’s so easy to do, and they’ll figure it out. Probably their teenage kids will show them
how to do it, but they’ll figure it out. Repetitive tasks drain morale. But I think also the people that stay
that are willing to do those repetitive tasks may not be the cream of the crop, just saying.
And as as executives, leadership appears stagnant, unwilling to change, and that will echo through
the whole organisation. I don’t know that you’d want to preside over a company that will be lumped
together with Kodak. You know what I mean?


PRODUCTIVITY and EFFICIENCY: Second one is productivity and efficiency. So the speed of which
things are done stays slow and productivity flat lines. And the reason for that is if there’s only a
certain amount of things that a human can fit in the day and something that takes them two weeks
takes two weeks, then it’s flat-lined. You can’t get more out of people other than forcing them to stay
longer and things like that. So with an AI, something that would take two weeks might take four hours.
It would take zero. But four hours isn’t bad with a human piloting, the copilot. It’s about creating a
rubric around speed, efficiency, accuracy, compliance, and a whole range of things for cost of
inaction, and the AI strategy as a whole. Meetings will just stay as they always do. If you have an AI
listening to the meeting, transcribing it, putting together to-do lists, saying what’s missing, picking up
on the risk assessments, all that stuff, meetings will change dramatically. Onboarding of staff will
stay manual. I could go through department by department and point out where things will stay the
same, but I think you can put that together pretty easily in your own strategy without me pointing out
the bleeding obvious. Your operating margins will definitely shrink as your competitors find their feet
with AI. So one of the costs of inaction is that gap. Your competitors are going to automate agentic
workflows and things like that, and you’ll still be figuring out if you’re going to let the staff use the free
version of ChatGPT. It’s not a great place to be.


INNOVATION and STRATEGY: So another one is innovation and strategy. Innovation is going to stall.
You can only get so far without AI. There’ll be strategic blind spots because the same people are
doing the same thing the same way, and nobody’s there. No little AI is there to say, Have you thought
about doing it this way? Or, I can see expediencies here. So that’s one of the great things with AI.
Decision making lags. If you’re not able to use a tree of thoughts prompt as an external consultant to
give you options and ideas and to help you prioritise things, then your decision making is going to go
around the same loop as they always do. It does for me anyway. Your long term growth potential
declines. There is no doubt AI is arriving. It’s not locking on the door. It’s just going to walk straight in.
So therefore be prepared because long long term growth is dependent on AI. You might not see it
right now, but it is. ESG or digital transformation, digital storytelling, any of those things will fall short
if you don’t have AI as a puzzle piece in there. I mean, I think that’s obvious.
It’s like saying, oh, we’re not going to consider non-fungible tokens on-chain. That’s not part of our
future. When digital identity is so much part of our future. So think about those things.


CUSTOMER and MARKET IMPACT I think the next one is the direct to the customer, the customer and
market impact. So clients may switch to AI-enabled rivals because their tools are cool. They won’t
even realise When they open up, I don’t know, into its Quickbooks versus, say, Xero, the thing at the
bottom, which is helping them, is actually a GPT integration from the API. They’ll just know, Wow, it
was able to see things and tell me things. So they’ll switch to that tool. Market share erodes, and
sometimes just vanishes completely. So if you have a look at Cheggs, the tutorial company, and then
their AI integration of CheckMate, and then the fallout of some of that. That’s a really interesting case
study on the cost of inaction, of trying to keep doing business the same way and not pivoting to
something that needs to be pivoted to. I don’t I think every emergent tech needs to be treated like a
crisis, and AI doesn’t need to be treated like a crisis.
But goodness me, don’t ignore it, please. Customer satisfaction will drop, especially if you’re using
those horrible taxonomic chat bots. Even an AI assistant one, you need to shift fully to either a
copilot…

Am I wobbling the phone?

A copilot or… What’s the other one? Maybe an actual AI agent on
your website that can intelligently retrieve the correct information. The brand will lose importance and
relevance in digital-first markets. So it could be something along the lines of when people say to me,
Oh, that’s great. Yeah, I love it all. I just want to do it on Zoom. I don’t want to fly in or come in person
and do things. So if I was one of those people that went, I want to use Zoom, which, by the way, I used
to be, then obviously, I’m not going to stay relevant in an online world. So by offering hybrid solutions,
AI, non-AI, human AI, you’re going to do much better than those that just stick with the same old,
same old. And then new market opportunities. It is revenue streams, new products, new services,
things like that. You’ll miss them. You just miss them because the data analysis isn’t there.


DATA ANALYSIS: Not every human can process data as quickly as an AI. But no human really can. So the last
section is really about the data that your organisation already has. So it’s data and risk, I guess. Data
sits unused, unrecognised, un identified, unloved, misunderstood. You’re not looking at the data, so
you’re not… There’s a gold mine there. Why aren’t you digging in that gold mine? Mistakes will
increase. Humans hallucinate more than AI does between them. They can fix each other’s
inaccuracies. Please have a read of my document and tell me where I’ve made a mistake and find
citations as to why it’s a mistake. That’s the thing that you can ask colleagues to do, and they just
come back and they go, Yeah, it’s great, babe. Yeah, I know it is, but can you tell me where the
mistakes are? Also, we want to look at compliance risk because they’re going to rise. And Imagine if
you put the AI on chain on the blockchain, and then the shareholders and the executive board all
agreed to specific compliance things, it would be impossible to send out, for instance, a Microsoft
Outlook email that said, I’m going to tell you X, Y, and Z, and that’s against the compliance because
the AI behind the email would say, “I’m sorry, I’m unable to send this email. You’ll need to edit it.” I
don’t know how you feel about that, there you go
Let me just check my list. Shareholder’s confidence erodes due to a lack of visible tech adoption.
Yeah, they’re going to come in heavy on AI. I think there will be a backlash or there’ll be more backlash
as time goes on, but this train is not going to stop or founder at the first intersection. Regulatory
reporting and audit trials remain weak. If you’re relying on human to do human work, the human will
be the weakest link. And this may surprise you, but you can’t take an AI out to a busy lunch and get it
to sign off on an audit report that easily because there were guardrails in place. And if you’ve got your
system cards and your model cards and your data sheets and everything in place, then you just… I’ve
tried to get ChatGPT drunk. It doesn’t work.


REPUTATION and GOVERNANCE: So that’s about it. I think there’s probably one more section which I
would call a reputation and governance section. If your investor relations are suffering due to a lack
of clear communication and narrative, an AI can help with that. Media, industry, analysts, that’s the
influences of the business world, analysts, will shift to an AI-first approach or companies that have an
AI first, and the codex of the world will be left behind as As far as earning attention, I guess. The
organisation will become reactive, not proactive to changes. And some things that may happen is that
AI is forced on us by regulatory bodies. And so organisations that went from no AI suddenly are
saying, We need AI overnight. And I remember this from years ago where a company said that they
would never have certain technologies in their organisation. And then I got a call on a Sunday, Could I
be there on Monday morning? To roll something out because clients had been very clear, if you don’t
put this stuff in, which is going to make efficiencies for us and you, then we’re moving to a different
vendor. Big company, too. Global. Merger and acquisition opportunities will be lost because the house
is not AI-ready. The house is not in order. If you don’t have your own house in order, you can’t do M&A
very easily. As somebody who’s worked for many decades in M&A, that’s always been an issue for me
is just, how much of a mess are we buying into?


I don’t know. There’s probably others for your list. And I just want to say I’m not an ambassador for AI.
I’m an ambassador for humans. But AI is coming. It’s not here yet. And when it does arrive, it’s just,
get ready, be prepared. You don’t have to eat the elephant hole, just buy it out. What am I trying to
say? Buy off little bits fields of AI as you go. Make sure your strategy has things like a sandbox area
so you can test some things. Make sure you’ve got a few brand ambassadors that are willing to pick it
up and run with it and try implementing things, stuff like that. Anyway, it’s over 15 minutes on my
phone, so I’ve got to edit this down a little bit. If you’re interested in my AI for Executives and Senior
Managers course, let me know, laurelpapworth. Com. If you’re interested in my half-day AI proof your
career, let me know. If you’re a small business and you can only do Saturdays, come along to the
Saturday AI course, Saturday course. Otherwise, have a look at the Australian Institute of
Management or those event and higher education people because I teach at those venues as well.
Only if you’re interested. Otherwise, stick around for the next video. Thank you. Bye.

Citations and Resources.