Beware of Fake Prosperity: AI Is Ruthlessly Amplifying Your Company’s Fatal Flaws

Nearly every business leader is talking about AI, but I care far more about one thing:

Is this wave of AI actually building new profit capabilities—or just helping you repeat old problems more efficiently?

McKinsey’s 2025 State of AI sends a clear signal: companies are rapidly expanding where they use AI, but only a small minority have turned it into a company-level operating capability; an even smaller share can point to clear returns on the P&L.

In other words, AI is becoming table stakes, not a dividing line.

To me, this isn’t about technological maturity. It’s about operating logic.

AI excels at speed and scale. But whether a business makes money has always hinged on something else: a clear profit axis that tells you what to do and not do—what merits sustained investment and what should be stopped in time.

If that logic isn’t in place, AI will only make your current way of operating faster, denser, and harder to correct.

AI isn’t the answer. It’s an amplifier.

If you’re headed the wrong way, you’ll just hit the wall faster.

The Scalability Trap: AI Amplifies Your “Fake Prosperity”

McKinsey’s data shows that while 88% of companies use AI regularly in at least one function, the vast majority are still stuck in pilots. High-performing companies that have achieved significant EBIT growth through AI account for just 6%.

Why can’t most companies cross that threshold?

Because many leaders treat AI like a cure-all—believing that once they install systems and buy compute, costs will automatically drop and efficiency will automatically rise.

That is a serious mistake.

In the YTT framework, I repeatedly stress one concept: fake prosperity.

That’s when revenue grows but profit doesn’t; headcount grows but efficiency falls.

In the AI era, this fake prosperity is easily amplified.

Imagine your business model already runs on razor-thin margins or even negative gross margins—buying market share with low prices and buying scale with subsidies.

Now you introduce AI-automated marketing and AI-generated content. What happens?

Your losses accelerate—because AI just pressed the turbo button.

AI is a tireless lever.

If your fulcrum (your profit model) is weak, the only thing it can lift is bigger losses.

McKinsey’s report also notes: the larger the company, the more mature its scaled deployments. That’s not only because big firms have money; it’s because their operating flows are often more mature.

For SMEs, rushing into “full AI rollout” before you’ve calculated unit gross margin and optimized your cost structure is like building a skyscraper on sand.

Remember: AI can help you drive faster. It does not care whether there’s a cliff ahead.

The Decision Blind Spot: AI Doesn’t Understand Your Profit Axis—You Must

What do high-performers do right?

McKinsey found they share two traits: strong top-management ownership and a refusal to settle for local efficiency gains; they embed AI deep into strategy.

That aligns with YTT’s philosophy. I often say: the CEO must shift from tactician to strategist.

In the AI era, that shift is urgent.

AI is an extraordinarily powerful execution tool, but it has no values. It doesn’t know what constitutes a good business. That’s why the CEO must define a clear profit axis.

Back to YTT’s profit formula:Profit = Volume × Gross Margin × Efficiency.

Many companies adopt AI with eyes only on efficiency, while ignoring margin.

If your AI system churns out 10,000 marketing messages a day and mostly attracts freebie hunters, your margin will sink and your service costs will rise.

That kind of “efficiency” is eating your profit.

Leaders must give AI explicit stop-loss rules.

For example, in supply-chain management, use AI for multivariate forecasting not just to prevent stockouts, but to shift from push (experience-driven) to pull (demand-driven)—eliminating inventory, the profit black hole.

In sales, use AI to analyze customer value not to turn everyone into a customer, but to zero in on the top 20% high-value customers and weed out resource-draining junk traffic.

AI has no judgment. You do.

Your defined profit axis becomes AI’s operating doctrine.

The Organizational Gap: Missing the Shift From Management to Operations

There’s another trend worth watching: the rise of agents. Twenty-three percent of companies have begun to scale systems that can autonomously plan and execute tasks.

This signals the demise of traditional management.

In the YTT framework, I’ve put forward a radical view: in the AI era, companies will have only an operating organization—not a management organization.

Why did we need bulky middle management in the past? To relay information, supervise execution, and translate the CEO’s strategy into actions.

Now, agents can replace those functions almost perfectly.

Future org charts will be radically lean.

R&D, supply, and sales will be tightly integrated, and the CEO will direct “silicon-based employees” that understand natural language.

But today, many companies have fragmented internal flows—cash, business, logistics, and information. Finance doesn’t reconcile with sales; production planning is out of sync with market demand.

Layering AI on top of that chaos just automates errors.

True efficiency is using AI agents to bridge those gaps:

Let a sales-side AI directly drive a supply-chain AI, and let a finance-side AI monitor the profit margin of every single transaction in real time.

Reduce human-induced information loss, so the CEO’s strategic intent travels losslessly to the front line.

This is AI’s real dividend: de-layering—making the company run like a precise, living organism.

Final Thoughts

Business competition, at its core, is always a race on efficiency and cost.

In the AI era, a founder’s core skill is no longer hovering over employees—it’s defining the rules.

The operating logic you feed into AI is the result it will return to you.

Before you slam the AI accelerator, pause and check your steering wheel: Is your profit axis clear? Is your cash-flow model healthy? Are your operating flows smooth?

If you’ve answered those, AI is the weapon that will help you conquer new ground.

If you haven’t, AI becomes the warrant that speeds you into a wall.

Don’t let the buzz of technology mask the hollowness of your operating logic.

Profit remains the only standard by which to judge an AI strategy.

After reviewing hundreds of enterprise AI implementations, I’ve found a common gap: technologists don’t understand operating discipline, and operators lack the tools.

What companies need is not just a smarter chatbot, but an operating system that understands profit and management.

That’s exactly why we launched the YTT AI Program.

This is a suite of four purpose-built solutions targeting the four most critical pain points of an enterprise. Each module can fight independently yet also reinforce the others—precisely solving issues at different stages.

• Acquisition: Fix “traffic without profit.” Filter out freebie-seekers and precisely lock in premium customers who are willing to pay higher prices.

• Conversion: Fix “sales depend on star performers.” Turn your top seller’s playbook into algorithms so average reps can deliver high conversion while protecting your margin floor.

• Management: Fix “strategy lost in the middle.” Replace relay-style middle management with agents so the CEO’s strategy is no longer diluted and lands directly as frontline actions.

• Supply Chain: Fix “inventory strangles cash.” Connect supply-and-demand data to enable demand-driven production—turning goods piled in warehouses back into money on the balance sheet.

  
  

This isn’t just software—it’s your profit moat for the next decade.

Don’t let your competitors master this asymmetrical weapon before you do.