Radical Optionality/ Electrifying Everything/ Hype Grows Over “Autonomous” AI Agents/ Learning from Every SpaceX Explosion

Radical Optionality. One of the most overlooked consequences of the fundamental increase in complexity which seems to characterize the 21st?century is optionality. The recent incredible developments in generative AI have dramatically increased optionality and the importance of the capability of managing it.?

I?wrote about optionality in January , and I was extremely pleased to see that one of my favorite thinkers and former BCG colleague Martin Reeves, together with Mihnea Moldoveanu and Adam Job, wrote a?very insightful Harvard Business Review article ?on management’s struggles in an era of unprecedented complexity and uncertainty, where traditional strategic planning often falls short.?

In their insightful article, Martin and his co-authors introduce the concept of "radical optionality" a groundbreaking approach to business strategy that revisits the implicit assumptions of traditional strategy, puts radical optionality into practice, and addresses its organizational implications.

The article is definitely worth a read, and I encourage you to engage with it. Below is a high-level summary of the core ideas, in bullet form, to nail them down. There is of course more nuance to them in the article, and every bullet point is probably worth its own article/blog post…

Revisiting the Implicit Assumptions of Strategy:?Radical optionality challenges conventional strategic thinking by proposing new perspectives on five key dimensions:

• From thinking?then?doing to thinking?while?doing: Instead of separating planning from execution, radical optionality encourages continuous adaptation and learning throughout the strategy implementation process.
• From striving for fit to creating optionality: Rather than focusing on finding the perfect fit within a market, radical optionality emphasizes maintaining a diverse range of strategic options to respond effectively to unpredictable changes.
• From exploring versus exploiting to exploring while exploiting: Organizations should strike a balance between exploration (seeking new opportunities) and exploitation (capitalizing on existing assets) to maximize adaptability and resilience.
• From market segments to mass customization: Instead of targeting specific market segments, radical optionality promotes mass customization, allowing businesses to serve a wider range of customer needs and preferences.
• From enterprise to ecosystem:?Organizations should embrace a broader ecosystem perspective, recognizing the importance of collaboration, co-creation, and partnerships to achieve strategic goals.

Putting Radical Optionality into Practice: To put radical optionality into practice, organizations should:

• Embrace external complexity: Acknowledge the complexities of the business environment and incorporate this understanding into strategic decision-making.
• Simultaneously search and execute: Balance the pursuit of new opportunities with the execution of existing strategies, enabling continuous adaptation and growth.
• Facilitate, shape, and monetize the customer's exploration process: Engage customers in the exploration process, helping them discover and customize their experiences while creating value for the organization.

Organizational Implications:?Radical optionality has significant implications for organizational structure, culture, and performance measurement:

• Organizational fluidity: Foster a flexible organizational structure that supports rapid adaptation, cross-functional collaboration, and resource reallocation.
• Human-technology partnership: Leverage the complementary strengths of human and technological capabilities to enhance strategic decision-making and execution.
• Forward-looking performance metrics: Develop performance metrics that focus on future potential and adaptability, rather than solely relying on historical performance indicators.

In conclusion, the authors argue that, by rethinking the implicit assumptions of traditional strategy, embracing radical optionality, and addressing its organizational implications, businesses can navigate the complexity and uncertainty of today's world. This approach enables organizations to maintain a diverse portfolio of strategic options, fostering adaptability and resilience in the face of rapid change, ultimately securing a lasting competitive advantage.

While I am 100% aligned with the points and the recommendations made in the article, I would dare to say that shift toward radical optionality must go behind the realm of management, organizations, and strategy.?

Instead, I feel it is time that we collectively embrace complexity, both culturally and also at the societal level, as all the major problems we have ahead of us are complex problems (e.g. climate change) for which there is no “simple solution”, and only through the mastering of complexity and through radical optionality we can successfully address them. But this is a different post…

P.S. As I wrote in January, I think a point even more underestimated than optionality is the asymmetry between the speed and breadth at which optionality can be generated “in silico” and the resulting bottleneck of translating it into real-world applications and/or products. The ones capable of reducing this asymmetry gap will reap great rewards…

How Electrifying Everything Became a Key Climate Solution

“If you ask, ‘How on Earth are we going to power the modern economy cleanly,’ nothing else makes sense. All roads point to electrification.” -?Saul Griffith , Founder at?Rewiring America .

The Biden administration’s?“plan to slash emissions” ?to almost zero by 2050 requires massive electrification of every sector of the economy. A?new climate law ?aims to ease the transition. But converting a nation that runs on fossil fuels to cleaner power sources won’t be easy. To start, over 280M gas-powered cars and 200M home appliances like furnaces and water heaters running on natural gas must be replaced. Will Americans?actually?make the switch from fossil fuels to electricity - a transition one?NREL ?analyst ?likens to “going from analog to digital?”

News items:

The Clean Energy Milestone the World Is Set to Pass in 2023

In a “clean energy milestone,” greenhouse gas emissions from the power industry - the world’s biggest emitter - are expected to fall ?in 2023. According to energy think tank Ember, this “positive tipping point “ is the first time “where power sector emissions stop rising. Clean power can actually go to replacing fossil fuels, instead of just meeting rising demand.”

Hype Grows Over “Autonomous” AI Agents That Loop GPT-4 Outputs

A screenshot of?AgentGPT , based on?Auto-GPT , executing a task of attempting to buy a vintage pair of Air Jordan shoes

Two “homebrew” open-source GPT-4 scripts ”that attempt to carry out multistep tasks with as little human intervention as possible” are throwing fuel on the AGI?hype fire .?AutoGPT ?developer?Toran Bruce Richards ?claims his script “chains together LLM ‘thoughts’ to autonomously achieve whatever goal you set.

BabyAGI ?creator Yohei Nakajima was “inspired to create his script” by the?HustleGPT movement , which seeks to “use GPT-4 to build businesses automatically as a type of AI cofounder.” Nakajima is arguably part of a “small cottage industry [of]?hustle bros ," many of whom “peddle hyperbolic claims” of using ChatGPT to “autonomously develop and run businesses with the sole goal of increasing your net worth.”

Ironically, “the limited usefulness of tools like Auto-GPT… may serve as the most potent evidence yet of the current limitations of LLMs. But that doesn’t mean those limitations won’t eventually be overcome.”

News items:

Sam Altman: Size of LLMs Won’t Matter as Much Moving Forward

When it comes to LLMs, OpenAI’s Sam Altman says size doesn’t always matter. “I think we’re at the end of the era where it’s gonna be these giant models, and we’ll make them better in other ways.” According to Altman, “What [OpenAI] wants to deliver to the world is the most capable and useful and safe models. We are not here to jerk ourselves off about parameter count.”

Every SpaceX Starship explosion and what Elon Musk and his team learned from them?

This week's SpaceX Starship explosion after launch ?highlights the inherent risks and challenges associated with space exploration and rocket technology. Despite the company's significant advancements in reusable launch systems and extensive safety measures, unforeseen circumstances can still lead to catastrophic failures.

This is not the first time,?as this article shows , and probably also not the last one. As SpaceX and other industry players work towards a future of affordable, sustainable space travel, learning from such setbacks is crucial for ensuring the safety and success of future missions.

Standing in front of the largest rocket ever built - SpaceX’s Starship - Elon Musk?said last year ?that “eventually the Sun will expand and destroy all life. It is very important - essential in the long-term - that we become a multi-planet species.” Given that the Sun is expected to last another?5B years , Musk is thinking?very?long term, particularly when climate change presents a much more?imminent threat . Meanwhile, in the short term, Musk “hopes Starship will provide a critical step to becoming multiplanetary [and] someday transport the first people to Mars.”

Made of “gleaming stainless steel… and nearly 400 feet tall,” Starship “unconventionally” uses methane instead of hydrogen for fuel. Paulo Lozano, director of MIT's space propulsion laboratory, says, “I think the idea, down the road, is to use methane that is found on places like Mars.”

Before making humans multiplanetary, Starship will “transport satellites into orbit for…?Starlink ,” which SpaceX CEO Gwynne Shotwell ?predicts will spin off and IPO this year. “But first, [Starship] has to fly.”. Which might take a while, after this week launch…

News items:

A Team of US Scientists Is Turning Dead Birds Into Drones to Study Flight Techniques That May Help the Aviation Industry

Birds?are ?real … but the dead “taxidermic birds” researchers are “converting… into drones” aren’t. At least not in spirit.Mostafa Hassanalian , Professor at?NMT , says by “reverse engineering… how [flocks of ] birds manage energy [in formations and flight patterns], we can apply that to the future aviation industry to save more energy and save more fuel.”

How Generative AI Could Disrupt Creative Work

How will GenAI impact the “creator economy, currently valued at around?$14B per year ?” Apps like ChatGPT and Midjourney are “threatening to upend creativity… often held up as a uniquely human quality… [that] behavioral researchers [call] a?human masterpiece .”

HBR examines three possible outcomes:

●??????An explosion of AI-assisted innovation

●??????Machines monopolize creativity

●??????“Human-made” commands a premium

Ultimately, “businesses and society will be responsible [for deciding] how much of the creative work will… be done by AI and how much by humans. Finding the balance here [is] an important challenge when [moving] ahead with integrating generative AI in our daily work existence.”

News items:

Project Demonstrates Potential of New Transparency Standard for Synthetic Media

The world’s first authenticated deepfake video produced using transparent engineering by Truepic and Revel.ai

Truepic and?Revel.ai ?recently produced a deepfake video to show how Truepic’s watermarking solution could help “provide authenticity infrastructure for the Internet.” If adopted, the standards Truepic advocates “might permit the more responsible use of synthetic media by providing viewers with signals that demonstrate transparency.” This could become an essential tool for the Realverse I mentioned last week…

Unpicking the Rules Shaping Generative AI

“An ice age ago in AI hype terms, an?open letter ?signed by Elon Musk and Steve Wozniak, among over 20K others, called for a six-month “pause” on further advanced AI model development, citing “risks to society,” But contrary to the letter’s implications, AI governance isn’t quite the Wild West it’s made out to be.

China and Europe are “fastest to the punch” in AI governance initiatives, with the EU working on “risk-based regulation… and a?claim ?of safeguards for fundamental rights.” China is moving to “control and censor” AI usage, while “countries like the U.K. and India are running in the opposite direction, with no plan to apply fixed rules to AI at this stage.” TechCrunch surveys regulatory attempts worldwide aiming to keep the “AI genii in the bottle and concludes it’s a “patchwork” strategy at best. “And the prospect of a unified/universal approach looks fanciful, to put it politely.”

News items:

ChatGPT Is Going to Change Education, Not Destroy It

Upon release, many “panicked people” believed that ChatGPT laid waste to two cornerstones of higher education - “essay-writing and test-taking.” By making it “laughably easy to cheat on assignments,” ChatGPT was “a dream machine for cheaters.” Now, “the outlook is a lot less bleak.” A?recent survey ?of US K–12 teachers and students found that over 50% of teachers had used ChatGPT, and “early all those who had used it (88% of teachers and 79% of students) said it had a positive impact.”

“Cheating” using disruptive tech - think calculators, Google and Wikipedia - is nothing new. “ChatGPT has thrown [educators] into a radical new experiment… But this is not the end of education. It’s a new beginning.”