Your AI Strategy Is a People Strategy
The founders who come through this well won't be the ones with the cleverest service line.
The AI and Your Agency conference in Austin hasn’t started yet. I’m headed there later this week. But if you want to know what this year’s conference is actually about, you don’t need to be in the room. You just need to scroll through the news and LinkedIn.
It isn’t just that everyone is posting about AI. That’s been true for a while. It’s the tone. There’s a shared sense, across doomers and optimists alike, that we’re careening toward an inflection point. That whatever the ground rules have been for the last few years, they’re about to change, and no one is sure exactly how or when or how much.
I’ve been going to this conference since its inception three years ago. Two years ago, the dominant note was opportunity. How do we leverage this? How do we get out ahead? Early adopters were confident. They had a plan.
This year, the early adopters are the ones recalibrating hardest. The people who were supposed to be the calm voices in the room, the ones who started early, who built the workflows, who actually use this stuff every day — they’re the ones saying some version of: this is moving faster than I thought, and I’m not sure the thing I bet on six months ago is still the right bet.
When the people who were ahead of the curve start sounding winded, that’s the signal.
Every industry, all at once
The 2026 Promethean Research, Digital Agency Industry Report, which came out earlier this month, puts numbers to what most of us are feeling. A third of agencies have already fully implemented AI across their operations. Seventy percent changed their service mix in 2025. Growth is running at roughly half the long-run average. Margins are compressing. The report’s own framing is that this is the first technology wave that simultaneously creates new demand and puts pressure on existing labor, and it’s forcing a major rethink of the value agencies deliver, how they price, and how they staff. In my own contribution to that report, I argued that what makes an agency meaningfully different in 2026 is the combination of genuine niche expertise and an AI-enabled team. I still believe that. But I want to talk about what it actually costs to get there.
Because here’s the part that makes this moment feel different from every previous wave. It isn’t that every corner of our industry is being pinched at the same time. We’ve lived through that before. The 2008 recession did it, the pandemic did it. What’s different now is that every industry seems to be getting pinched at the same time.
The dev shops are hearing “we’re going to try vibe-coding this ourselves first.” The design shops are hearing “AI is good enough for a lot of it.” Content shops were the first to feel it because language was the first capability the large models truly owned, though I think the content folks may end up with a quiet advantage once clients get sick enough of AI slop to remember that real voice is worth paying for. But it isn’t just us. Jobs that were considered high-demand, stable, future-proof two years ago are suddenly on the list of things that might get automated out of existence. Legal research. Financial analysis. Customer service. Parts of medicine. Parts of software engineering itself. The people writing the tools are watching their own work get rewritten by the tools. And it isn’t at all clear yet which jobs are genuinely AI-proof and which ones just haven’t been touched yet.
That’s the thing underneath the tone in the feed. It isn’t “AI is changing how we work.” It’s “AI is coming for jobs, and we don’t know where it stops.” That’s a different kind of uncertainty, and it deserves to be treated like one.
The part that isn’t a business problem
When the client can do part of what you used to do, the honest answer to “what’s our value now” is that it needs to move upstream. You stop being the people who produce the output and start being the people who decide what the output should be. Strategy. Judgment. The context that only comes from years of doing the work.
But becoming a strategic firm rather than a delivery firm is not a service-line adjustment. It is a different business. Different clients, different sales processes, different pricing, different delivery models, and quite possibly a different team.
Because the people on your team right now, the ones who got you here, were hired to do the work. Not to consult on the work. Some of them will want to make that leap and will be great at it. Some of them will want to and won’t quite get there. And some of them, and this is the part that’s heartbreaking, don’t want to become strategists at all. They like doing the job they already have. They’re good at it. They built a life around it. And the role you need them to grow into, the thing you’re now imagining, isn’t a role they want.
The hardest part of this pivot isn’t the business model. Business model change is hard and stressful and time consuming, but it’s the kind of thing founders know how to grind through. The hardest part is that, on the other side of the decision to change your business, there is a set of decisions about the human beings you care about. People who did nothing wrong. People whose work is quietly being eaten by something none of us saw coming this fast.
The comfortable story we tell ourselves
The version of this I hear most often, from founders and coaches and conference speakers alike, is that this isn’t our first rodeo. Agencies were born in the 90s out of the internet. We pivoted through social. We pivoted through the 2008 recession. We pivoted through the pandemic. We’ve always adapted, and we’ll adapt to this one too.
That story is comforting, and it may even be largely true. But I think it’s the wrong analogy, and the wrongness of it is what’s making so many founders feel off-balance without being able to name why.
Every previous wave changed what agencies sold. It didn’t change the fundamental shape of the work. You still needed humans doing the doing.
The closer analogy, I think, is the auto plants in the 1990s. Robots came in. The industry didn’t disappear. Cars still got built, and in many ways better than before. But it employed far fewer people, and the people it kept needed very different skills from the ones it let go. The shape of the work changed, not just the tools.
You won’t hear this comparison made often from a conference stage, because it isn’t a hopeful message. But I think pretending the auto-plant analogy doesn’t apply is part of why this moment feels so disorienting. We’re comparing it to the wrong thing, so we keep expecting the pivot to feel familiar, and it doesn’t.
The work this moment is actually asking for
Here’s where I want to offer something that isn’t false comfort, because I don’t think false comfort serves anyone at a moment like this.
Some agencies will come out of this more successful than before. I’m confident of that. The ones who will are the ones whose founders are willing to do the visionary work.
Not the AI strategist. Not the tool evaluator. The visionary. The person who decides where this business is going, what it’s going to be on the other side, and who it serves. The person who can then stand in front of a team and share that picture with enough clarity and enough candor, both upside and downside, that the people on that team can make a real decision about whether they want to come with you.
The overly cynical take says, “you’re going to have to clean house.” I don’t think that’s true. You may have to make some hard calls. You probably will. But the size of that loss is partly within your control and depends on how well you do the visionary work.
Founders who set the vision clearly, who invest in training the people who want to come along, who are candid about both the benefits if this works and the risks if it doesn’t, who treat their team like adults who can handle a real conversation about a real situation: those founders tend to bring far more of their people with them than they’d expected to. The ones who skip that work, who hope the team will figure it out on their own, who treat the pivot as a quiet operational change rather than a shared mission, are the ones who end up making the painful decisions alone six months later and wondering how it got so bad.
The circumstance is the same for everyone in this industry right now. The biggest variable is the person at the top of the org chart.
What I want you to take from this
If you’re an agency founder reading this and the inventory of your business right now is making your stomach hurt, I want you to know a few things.
You’re not crazy. The shift is real. The pace is real. The grief underneath the business decisions you’re trying not to make yet is also real. The founders I talk to who feel the weight of this the most are usually the ones who care the most about their people. That isn’t a defect in your leadership. Bad leaders don’t feel this. The fact that you do is part of why your team is worth leading.
And the job in front of you is the one you were made to do. You haven’t had to do quite this version of it before, but you know how to set a vision and bring your team along. So it’s back to basics. Define where you’re going. Tell your team the truth about the road. Invest in the ones who want to walk it with you. Grieve the parts of this that are worth grieving, instead of dressing them up as strategic initiatives.
The most successful agencies in the next decade will be led by founders who were honest about what it was going to cost. Start with yourself.
I'm Katie Bedford. I spent a decade helping agencies run better. Now I help agency leaders think better — about their business, their role, and what it all actually means. If something in this piece hit a nerve, I'd love to hear about it.