Is AI a massive disappointment? The 2026 state of the enterprise report

Speaker A: Foreign. Welcome to the AI Automation Dojo. Today someone handed us a beautiful 36 page report titled AI Adoption in the Enterprise and we read it all so you don't have to. Which is lucky because it turns out to be a horror novel with a sales brochure stapled to the back. I'm your host, Andrzej Kinostovsky, one of the founders of Office Samurai with where we read other people's research the way you eat a fish, keep the meat, spit out the bones, and never buy the boat from the guy who caught it. So whether you're a leader losing sleep over a strategy you can't quite admit isn't working, or an employee quietly pasting the company financials into a free chatbot on the boss home, you're in the right place. Now grab your favorite katana or a highlighter for the parts of the report they were hoping you'd skip and let's get to it. Imagine someone hands you a 36 page report. It's glossy, it's got those expensive purple gradients on the COVID the kind of PDF that clearly cost more than my first car. And across the top in big confident letters, it says AI Adoption in the Enterprise. So you start reading and it is 34 straight pages of human suffering. CEOs lying awake at three in the morning, employees quietly committing sabotage, interns being out, prompted by the new guy robots getting promoted to senior management. It reads less like a business report and more like a Stephen King novel where the monster is a Microsoft copilot license. And then you get to page 35 and the report, having walked you slowly, lovingly through the entire burning building, turns to you, dusts off its hands, smiles and says, by the way, companies that use our specific product see a 333% return on investment. Care to schedule a demo? Today we are discussing the RYTR 2026 AI Adoption Survey. And I want to be fair to RER because this is actually a good piece of research. They partnered with a firm called Workplace intelligence. They surveyed 1200 C suite executives and 1200 regular employees across about about 30 industries in the US, UK, the Ireland, France, the Benelux countries, and Germany. This was fielded at the end of last year and at the start of this one. So it's fresh, it's big, it's real data. It's also, and I cannot stress this enough, an ad writer sells an enterprise AI platform, which means this entire report is a company saying the building is on fire while standing in the doorway holding a fire extinguisher with A price tag on it. But that's fine. We've done this before. Remember the McKinsey, uh, and the MIT reports from last year? You read these reports the same way you eat a fish. You keep the meat, you spit out the bones. And whatever you do, you do not buy the boat from the guy who caught it. And here's the bone I want you to keep in your mouth the whole episode. Because it's the most important detail in the document. And they bury it in the methodology section where they know nobody reads. Every single person they surveyed already uses AI at the company that already permits it. These are not the stragglers. These are not the dinosaurs. This is the cool kids table. This is the data from people who are supposedly winning. So when I tell you it's a horror show, just remember this is just the highlight reel. Let's get into what's not working because. Oh, boy. Let's start with the headline number, uh, the one that should make every chief AI officer spit out their oat milk flat white. Nearly half of executives, 48%, admit that AI adoption at their company has been, and I'm quoting the report directly here, a massive disappointment. A, uh, massive disappointment. Not a learning journey. Not early, uh, innings, not we're iterating towards value. A massive disappointment. That is the kind of language you use about a blind date gone wrong. Not a multi year, multimillion dollar enterprise technology strategy. And the money backs it up. Only 29% of them say they've seen significant return on investment from generative AI for AI AH agents, it drops to 23%. So roughly three out of four executives have spent real money on real licenses with real consultants. Hi. And gotten, financially speaking, a, uh, warm feeling and a slight deck. Longtime listeners will recognize this. We have a name for it. It's the AI Paradox. Everybody's flying the warp speed spaceship to the end of the driveway to pick up the mail. Different report, same driveway. Now, here's where it goes from disappointing to what are we doing as a species? Because you'd think, faced with no return on investment, a sensible company would slow down, maybe figure out a plan, maybe ask, what are we actually trying to achieve here? Instead, 69% of companies are doing layoffs because of AI. 69%. They are cutting human beings today on the promise of AI productivity. And in the very same report, 39% of them admit they don't actually have a formal strategy to make any money from that AI Let me put those two facts in the same sentence because the report politely keeps them on separate pages like divorced parents at their kid's wedding. Two thirds of those companies are confident enough in their AI to fire people. But almost four in 10 of them have no plan for how the AI generates revenue. They are absolutely certain about the part where humans live and completely fuzzy on the part where value arrives. That's not a strategy. That's a hostage situation with a vision board. And it gets better because 75% of them, three out of four, admit that their company's AI strategy is again quoting the more foreshow than for actual internal guidance. Three quarters of executives are looking you dead in the eye and confessing. The strategy is a Halloween costume. It's a LinkedIn post wearing a trench coat. It exists to be seen having a strategy, which is a very different activity from having a strategy. This, by the way, is the entire reason of a samurai exists. You know, our strict no bullshit rule. These companies have looked at that principle and uh, decided to do the exact opposite at scale while firing the witnesses. Now, and I want you to sit with this one. It is not getting better, it's getting worse. The survey run the same study last year so we can watch the trend line. And this trend line is going the wrong way down a, uh, one way street. The share of executives who say AI is tearing my company apart went from 42% last year to 54% this year. The share saying it's created power struggles and disruption went from 42 to 56. And satisfaction with their own AI tools didn't just stall, it dropped. On every single dimension. They measured the big one, the number of people who rate their tools excellent on security and Data governance fell and 17 points in 12 months from 71% down to 54. Think about that. They've had a whole extra year of practice. A year of conferences, a year of webinars, a year of guys like me talking about how to do it. And they got worse at it. This is the only field of human endeavor where experience appears to be a disadvantage. It's like watching someone take golf lessons for a year and come back unable to hold the club. So how's the C suite holding up emotionally through all this? Funny you should ask. 73% of CEOs say their company's a strategy is causing them stress or anxiety. 38% say the stress is high or crippling. Crippling, that's the word. 61% of executives fear they could personally lose their job if they fail to lead their company through this AI transition. So they're firing other people because of AI While privately terrified that AI Is going to get them fired. It's the circle of life. But the, uh, lion is also crying. And here's my favorite sentence in the entire report, the one I'd put on a billboard. 58% of these executives admit that many of their fellow executives lack the fundamental knowledge to make strategic decisions about AI Read that again. The people in the room have looked around the room, and the majority verdict is the other people in this room have no idea what they're doing. Which would be a hilarious thing to discover if it weren't the same room that just approved the layoffs. And then we arrive at the cherry on top. 75% of these executives expect AI uh agents to be part of their company's C suite, the actual leadership team, within the next five years. They want to give the robot a seat at the big table. In the same report, 35% of them admit they are not confident they could pull the plug on a rogue A.I. ah, agent if it started causing damage. So let me make sure I have the plan straight. We're promoting AI to leadership. We're handing it real authority. And one in three of us isn't sure we could turn it off if it went bad. That's not a digital transformation. That's the first 10 minutes of every AI apocalypse movie. All right, take a breath. That was the executive suite. Now let's go downstairs to the people who actually do the work. Because if you're a manager listening to this, and, uh, you are, that's who listens to this show. The next part is about you, and it's not going to be comfortable. Okay, managers and directors, this chapter is for you. Sit up straight. The report asked employees a simple question. Is your manager an AI champion? Someone who actually encourages the team to embrace this stuff? 35% said yes. 35. So roughly two out of three of your people do not see you as a champion of the single most disruptive technology of their careers. The most common answer at 58% was that the manager is open to AI but provides minimal direction or encouragement. Which is corporate. For he forwarded us a TED talk and went back to his calendar. And that There's a brave 7% who say their manager flat out doesn't like or understand AI Somewhere out there, a manager is listening to this in his car, nodding along, going, yeah, those guys are the worst. With absolutely no idea. Uh, his own team put him in the 7%. But that's the warm up. Here's the gut punch. 75% of employees say they would trust AI more than their own manager for at least one work task. Among Gen Z, it's 80% and it's not for trivial stuff. 41% would rather have AI than their manager analyze their performance data. 22% would rather get feedback on their work from the machine than from you. And 55% of employees, 64% on the young ones, believe they personally know more about using AI for their job than their manager does. So just to summarize the relationship, your team thinks they understand the tools better than you. They'd rather the algorithm did your performance reviews. And a solid chunk of them would prefer career advice from a chatbot that few episodes ago enthusiastically approved bringing a parrot into our office. Now, you could get defensive about that, or you could notice that this is the single biggest open goal in modern management because the bar is on the floor. 35%. If you become even a vaguely competent AI, ah, champion for your team, you are instantly in the top third. You don't have to be a genius, you just have to show up and not to be the 7%. Let's keep going, because it gets spicier. The sabotage. 29% of employees admit, uh, they are actively sabotaging their own company's AI strategy. Among Gen Z, it's 44%, nearly half. And I want to be clear here, kudos to Gen Z. Sylvia Krolikowska always says that Gen Z has the best bullshit radar. And since we have just learned that 70% of AI executives find that their AI strategy is more for show than for actual internal guidance, which is just corpus speak for bullshit, maybe the sabotage is the appropriate reaction. And I need you to hear how they're doing it, because the report lists the methods and it reads like a union, uh, playbook for the machine age. They're using unapproved tools. They're refusing to use the AI outputs, they're ignoring the guidelines. Some are, uh, intentionally generating low quality outputs to make the AI look bad. And my personal favorite, they are tampering with performance metrics so that the AI appears to be underperforming. This is not laziness. This is a coordinated misinformation campaign run by your own staff against a software product. The disquiet quitting that went to night school and learned prompt injection. And 75% of the C suite say employee sabotage is a serious threat to the company's future. So they know it's happening. They just can't prove which of the smiling faces in the Monday standup is the one feeding Garbage to the model. And why are they doing it? Why are they sabotaging? The report asked number one reason. At 30%, I don't want the AI to take over my job. Then 28% AI has too many security issues. 26% my company's AI strategy is poorly executed. Another 26 AI diminished my value or creativity. Look at that list. Only one of those is really about fear. The rest are product reviews. Your employees aren't Luddites clutching their staplers. A lot of them are quality control. And the feedback is this rollout is bad and you should feel bad. And finally, the thing I think is the real story of this whole report. The two tiered workplace. 92% of the C suite say they are actively cultivating a new class of AI elite employees. The words AI elite. And 60% say they plan to lay off employees who can't or won't use AI. So a new aristocracy is forming inside your company in real time. And it pays the reports. AI super users are about three times more likely than the laggards to have gotten both a, uh, promotion and a raise in the past year. They're saving themselves nearly nine hours a week. And this is the part that should terrify every middle manager who came up the traditional way. They skew young. 43% of Gen Z are, uh, super users versus 25% of the boomers. So the org chat is quietly being redrawn. Not by tenure, not by who's been loyal for 15 years, by who is a best friend with a chatbot. The kid who joined 18 months ago and treats Claude like a colleague is on the escalator. The veteran who prefers to do it himself is on the list. That's the comfort zone, ladies and gentlemen. And it is on fire. And the people holding the marshmallows are, uh, 26 years old. All right, I've been beating you up for 15 minutes. Let me throw you a rope because there is good news here and it's actually useful. Here's the thing the doom merchants leave out. When AI works, it really works. In the same report, 86% of employees and 97% of executives say they have benefited from AI in at least one concrete way. Employees are saving around six hours a week. The super users we just talked about nearly nine executives around 12. That's not nothing. That's a full extra workday every single week for a big chunk of the workforce. The value is real. The spaceship can fly. People are just pointing it at, uh, the mailbox. So what separates the company is getting 12 hours back from the 48% calling it a massive disappointment. Conveniently, the report tells us in its little how to fix it section near the end and I read that section and I laughed out loud because it is almost word for word the stuff we have been saying on this show for the last 30 episodes. Their fix number one tie AI ah to measurable business outcomes. Define what success looks like before you build, then actually track it. That's every one of our process discovery episodes. That's the whole ROI of sanity Matrix. Business value on one axis, technical feasibility on the other. Don't automate vibes. Automate something you can put a number on and show your cfo. Their fix number two Empower your business users to innovate and stop forcing everything through an IT bottleneck. That's the center of excellence, what we called the adulting phase. Govern enough that it's not the Wild west, but not so much that everyone quits and goes back to the speakeasy. It's a balancing act and the data we just covered shows you exactly what happens when you get it wrong in either direction. The fix number three Invest in growth, not just cost cutting. In other words, stop using the warp drive to fire people and start using it to do things you literally could not do before. The companies treating this purely as a headcount reduction tool are the ones doing layoffs with no revenue strategy. Funny how that connects. And their fix number four, and this is the big one, governance for AI agents with and I want to frame this and hang it on the wall. A human who can actually pull the plug. Remember, 35% of executives weren't confident they could stop a rogue agent. The fix for that isn't a longer ethics committee meeting. It's the principle of a samurai hammers on every single time we talk about agents human in the loop. The AI does the grueling work, the AI drafts the answer, the AI preps the booking and the human being clicks approve. You want the agent to prepare the package. You don't want it to have its fingers on the button. Unless you are genuinely relaxed about the language model interpreting a rounding error as a reason to dissolve the board. If you don't put a human and a guardrail between Genai's enthusiasm and your business, you don't get transformation. You get a disaster. Now the report also has a fifth point which, and I'll be honest with you, because that's the rule here. No bullshit. Their point is work with a supportive technology partner. And then page 35 reveals that the supportive Technology partner they had in mind, astonishingly, is them. So, uh, take that one with the appropriate pinch of salt. But here's the truth I'll give you for free, even though it pays, admittedly, my mortgage. The MIT data we covered a couple episodes back found companies that bring in an external partner, hit rough. Double the success rate of the ones trying to build all alone. And the reason isn't magic. It's that an outsider doesn't care whether Bob in accounting likes robots. An outsider will look at your favorite beloved decade old process and say the thing nobody internally is allowed to say. This shouldn't be automated. It should be deleted. Internal teams get stuck in the politics, we bring the katana. That's the whole job. So that's the recipe. Tie it to outcomes. Govern without strangling. Keep a human on the kill switch. Fix the process before you automate it. None of it is glamorous. None of it will get you a keynote slot. It just happens to be the difference between 12 hours a week saved per employee and a massive disappointment. So what did we learn today? Other than the fact that you should never give a corner office to something you're not confident you can switch off? We learned that the most honest document about the State of Enterprise AI is ironically, a sales brochure. 34 pages of carnage and one demo button. And both parts are true at the same time. That's the thing to hold into. The carnage is real. The disappointment, the sabotage. The crying CEOs, the robot they want to promote but can't switch off. But the upside is also real. The 12 hours a week saved, the 1300 CV screened in 48 hours instead of two weeks. The super users running circles around everyone. The difference between those two outcomes was never the technology. It was never about having the best model or the most licenses. It was the boring stuff. Strategy before layoffs, process before automation. A human with their finger on a kill switch. And here's my 1. Ask the single thing I want you to take away. Read the reports. All of them. McKinsey, MIT, Reiter, whoever publishes the next glossy one, keep the data. It's generally good. But when you hit the page where the building is on fire and they're holding the only extinguisher with a price tag on it, just smile and remember that the fire and the extinguisher came from the same box. Now, if you've spent this whole episode in a slowly rising panic because you've just realized your company's entire AI, uh, governance strategy is Slack channel called cool AI stuff And a lot of optimism. Don't panic. That's literally what we do. Before you fire anyone, before you buy anything, before you give a robot a corner office, you find out what's actually worth fixing. Go check out our past episodes. We've mapped the whole thing out. The process, discovery, the playbook, the ladder you climb one rung at a time without breaking your corporate neck. Go have a look. I promise it's more useful than whatever thought leadership webinar you're currently ignoring on your second monitor. And that's a, uh, wrap. 34 pages of carnage. One demo button, and we kept the receipts. Domo arigato for listening. We know your time is valuable, certainly more valuable than the 75% of corporate AI strategies that by their own admission, exist purely for show. So thank you for investing it here. Big thanks to the analysts at RYTR and Workplace intelligence for surveying 2400 people so I didn't have to. And to our producer, Amna Tsubal, the only human in the loop in this building I trust to pull the plug on me. Recorded as ever in the haunted but cozy halls of Wadswit Studio. If this episode helped you, tell the fire from the extinguisher. Uh, hit subscribe and leave a five star review. If you if your AI governance strategy is still a Slack channel called Cool AI Stuff, please go download the AI Automation playbook from the description. Until next time, be the champion or be the next year's cautionary statistic. Matane.