The Premise

In the current scramble for “Digital Transformation”, small and medium enterprises (SMEs) are integrating Artificial Intelligence at a pace that may be outstripping their limited governance. At Negotia Group, we are beginning to see a divide in how these tools can impact business value.

Is AI a Strategic Asset that raises a business multiple, or is it generating presently unseen and likely unanticipated outcomes?

Re-positioning Kevin’s Law of Unanticipated Outcomes

In this business and in my career to date, I have developed fairly robust opinions that primarily encourage the drive for constant change; however, and importantly, I have often spoken about “Kevin’s Law of Unanticipated Outcomes”

The Law states:

“There is always going to be an outcome from decisions you make. That outcome may not be what you expected, but that does not mean your decision was wrong.”


Kevin’s Law of Unanticipated Outcomes reframes how we interpret business events.

  • It asserts that:
  • Every decision generates information.
  • Unanticipated results are not failures; they are data.
  • Intelligent recalibration turns discomfort into advantage.

So, the more a business seeks to automate its core “Institutional Knowledge” without a framework of defensible governance and actual embedded intelligence, the higher the probability of a secondary outcome that diminishes the value growth.

Risk V Return

Proponents argue that AI provides Integrated Strategic Control. By leveraging activity-based advantages through superior resource coordination, a business can achieve efficiency in everyday activities; Business gurus like Porter describe these as essential for a high-value organisation.

Does the efficiency gain of AI-driven workflows create a defensible barrier to entry, or does it simply lower the floor for all competitors, erasing the “Innovation-Based Advantage”

Further, are your business’s innovative advantages in the hands of individuals, rather than the organisation?

For the Solicitors we serve, a valuation must be a Shield, a defensible expert opinion. If a business uses AI to handle client data or legal queries without an “Isolating Mechanism” to protect IP, the business may be unknowingly leaking its valuable strategic asset into the public domain either by default or with every person who leaves its employ.

If a buyer discovers that your “Proprietary Processes” are actually the result of an open-source AI algorithm, does your valuation multiple collapse because the asset is no longer “Difficult to imitate?”

The Conflict of Human Capital

We know that a business purpose leads to clarity. If we automate the purposeful interactions between staff and the outside world, such as customers, do we lose Asset-Based Differentiation found in unique supply relationships or accumulated market knowledge? Or does the automation liberate the owner’s vision, as is suggested in AI training?

A Call for Discussion

Before we at Negotia Group take a definitive position on how AI-reliance should be weighted under International Valuation Standards (IVS), we must look at the reality on the ground.

To the Solicitor: How do you view the professional indemnity risk of an SME that relies on under-governed AI?

To the SME Owner: Are you using AI as a magnifying glass to focus your purpose, or is the technology itself creating a blur of unanticipated outcomes?

I invite your insights in the comments below. Let us weigh the Sword against the Shield.