Gen AI: The Innovator's Dilemma

For the last 18 months or so I have been working with customers on Gen AI. One of the things I’ve been doing is running customer workshops with Ascent ’s CTO, Murray Foxcroft . He teaches people the fundamentals of how things work and I take them through a structured couple of hours using real life case studies and design thinking techniques to help them come up with ideas and then refine them into blueprints that they can take back to work.

Literally every few weeks Murray and I have to refresh the content, take stuff out and add new things in. For example, a year ago no one had heard of Agentic AI, now it’s front and centre or everything you read about. I’ve never known anything quite like it. It’s constantly changing.

One thing I’ve noticed is that this pace of technological change is making many leaders uncomfortable. At a recent workshop with the Exco of one firm, the CEO asked when I thought the right time to invest and get onboard with Gen AI was. He was keen to learn more about Gen AI and understand its application during the workshop but was worried that investing too much, too early, would mean wasted investment. (sic. whilst investing too late would mean missing the opportunity). This is a common position for many leaders in established firms. There is a fear that they will waste money if the hype is greater than the reality and, at worst, they will get fired if they get it wrong. So they do nothing, or not a lot, other than a few Proof of Concepts (PoCs).

This conversation reminded me of ‘The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail’, by Clayton Christiansen (1997). Yes, I’m that old that I remember it coming out. His basic premise is that larger companies find it difficult to innovate. They are set up to be efficient and work at scale, not rapidly change and innovate and actually actively avoid it. Leaders in these firms tend to innovate slowly by making big investments in scalable technologies, like a new data platform, CRM system or online customer journey. Long investment cycles, linear thinking and thorough planning with detailed business cases and Return on Investment (ROI) projections.

The trouble is that Gen AI is a rapidly changing technology that is upending traditional business models from top to bottom. Every industry and every part of an organisation is being affected all at once. This requires non-linear thinking, creativity and learning as you go, not steady, slow, considered investments. The answer to the CEO, without being flippant, is ‘that’s the wrong question, the right question is how should I start?’ Here's my take on what the winners are doing and what he and his team should be doing:

Think big. Start small.

Although no one has fully grasped the entirety of what is going to happen in the next few years (they’re fibbing if they tell you they have), many people understand the direction of travel: workflow automation and AI assistants. Workflow automation, for example, means that entire core business processes won’t need human involvement. Firms are already implementing AI agents to manage customer complaints, for example. AI agents that can understand what people are complaining about, reason what the solution is and take action to resolve it.

AI assistants, on the other hand, are emerging in every aspect of life, from assistants that help doctors manage their patients to personal shoppers that find you the best deals and buy stuff for you. You need to spend some time understanding the direction of travel, the scale of the change and really consider what that means to your organisation. You need to think big and strategically.

However, you can’t afford to wait, you don’t know the details of what will happen and you’re not going to until you experience it, so you’ve got to start?and figure it out implementing small changes and learning as you go. Start small. Be quick, do lots and don’t bet the farm on one idea. You’ll be surprised where you end up and the results you achieve.

Be outcome driven, not technology led.

One of the things that runs through my thirty-year career is seeing this mistake being repeated time and time again. People think that the outcome they are delivering is implementing a technology. It isn’t. It’s delivering an outcome. People undertake IT projects to deliver cost savings, revenue growth, improved customer experience (arguably revenue growth) or to manage risks. Yet, IT departments across the world have governance models focused on delivery dates, timelines, change control, delivery risk management, cost control, risk mitigation. Hardly any are focused on ‘where are we in terms of delivering the outcome we set out for?’

Define the outcome you want to achieve – the why, if you like Simon Sinek – and work backwards. For example: ‘Take out cost in the service centre whilst improving customer satisfaction scores.’ What tools can you use to make that happen?

Create multi-disciplinary teams.

It turns out that diverse teams with different experiences and knowledge come up with the best solutions. Who’d have thought it! But still most organisations leave tech enabled change to the IT department. That was already a suboptimal way to develop and implement change, but with Gen AI it’s even more redundant. IT people, even Digital or UX IT people, won’t come up with a fantastic new employee or customer experience or revolutionise core business models. It needs everyone to be part of the change, from compliance to procurement, back office to front office. The entire organisation will be impacted and needs to help invent the future.

Encourage a creative mindset.

This is a difficult thing to do. As I mentioned above, many organisations are set up to focus on efficiency and scale, not creativity and innovation. Therefore, the culture, ways of working and people reflect that. Changing it is super hard. The only way to change it is to live it at the Exco, bring in some new people with that mindset (and give them authority to do stuff), and encourage and reward new behaviours.

One firm that does this well is Walmart. Their Exco have accepted the direction of travel and have set out to democratise the adoption of Gen AI across the entire organisation. Donna Morris, EVP at Walmart says ‘This goes above and beyond the basic benefits of Gen AI, like productivity gains. We believe the key to unlocking transformation lies in the creativity and innovation of our associates. Ideally, this technology will free them from monotonous, repetitive tasks, allowing more time and focus for improving the customer and member experience.’

From instore employees and service centre staff to procurement and finance, more than 75,000 Walmart employees are being given Gen AI tools to start to innovate and create. They’re not leaving it to a Gen AI Innovation Lab staffed by some of Elon’s DOGE young disruptors, they’re embracing and encouraging the power of the people who know best.

Start building skills, experience and reusable tools.

If you have read this far, you’re hopefully thinking that the reason Gen AI is more than the hype is because it is a radically disruptive technology. Every sector, every part of an organisation and every person is, and will be, impacted. We’re at the start of a macro cycle of transformation and, like any technological enabled time of change, that requires reskilling and retooling. Entire workforces need reskilling, from top to bottom and not just in the tools and tech, but in critical thinking, creativity, change management and ultimately, what it means to be human in The Age of AI.

In summary, my short answer to the CEO was this ‘You can’t afford to wait. You must act now. Be clear on the bigger picture, the direction of travel, for every part of your business but start implementing small changes now, learn as you go. You need to hold those responsible for the change accountable to delivering outcomes, not new tech, actually, don’t worry about getting the technology right, it will change anyway. Don’t leave it to IT, democratise the change across your organisation and start reskilling people, give them new tools and give them permission to play and be creative.’ Easy, right! Best Guinness in London? The Devonshire, Soho.

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