By: Mark Cummings, Ph.D.

Recently, there has been a big focus on AI automation. Some are saying that if senior management doesn’t have an effective plan for AI automation, they are not doing their job. The company is in trouble. Etc.  Unfortunately, figuring out what and how to start using AI to automate existing functions, although important, can be missing the forest for the trees.

AI is so fundamentally shifting the earth under the feet of today’s organizations that it is now necessary to redo the basic understanding of the business. What a successful business was pre-GenAI is likely not what it will be after the advent of GenAI - if the organization is going to still be successful.

Danger

AI is fundamentally changing the business environment more than the microprocessor, Internet, and Web. Yet, we can learn from those past transitions. 

An example is Western Union (WU). In 1976, WU had a US domestic Telex network that was of the same scale as the AT&T telephone network. Telex was a dial-up service that connected large mechanical/electrical typewriter-like machines that used punched paper tape. These systems had been in use for over 60 years. They used an early derivative of the Morse code called the Baudot code. When the modern ASCII code appeared, and the first 30bps modems came into the market, WU responded by trying to do what it had done previously, only better. In this case, a “High Speed Telex Service”. As the PC and the internet came online, the WU network disappeared, and the fragments of what was left were pulled into a corner-store money transfer system. Senior management didn’t feel the earth shifting under their feet until it was too late.

An industry-wide example is the disappearance of the intermediaries who worked with raw material suppliers in third-world countries. Before the web and cell phones appeared, third-world raw material suppliers didn’t know world market prices and didn’t have a way of reaching their end customers. Similarly, the end customers didn’t have a way of reaching the raw material suppliers. Intermediaries were able to leverage low (uninformed) prices from the third-world and contacts with the end users to provide value and make a good profit. When the web and cell phones appeared, third-world raw material suppliers could reach first-world end users directly, and the intermediaries faded.

How bad and how fast can it be today? IBM had a 25% fall in share price immediately following its Q2 2026 quarterly report preview that appeared to show a misunderstanding of the post-GenAI nature of its business.  The CEO essentially said that the company didn’t understand how AI was changing the way that the company’s customers were thinking and acting.

This demonstrates the danger. Focusing only on how to use AI to automate what an organization is doing today can produce similar results.

The Post-AI Environment

AI dispersion is not consistent across time, distance, culture, etc. At the same time, it is happening quickly. The danger is that if you target one area by automating the old way of doing things with the old objectives, it may appear to be working. That is, it appears to be working until suddenly it isn’t. Thus, it is prudent to plan for that point when the old way doesn’t work.

AI’s effects are systemic. They impact the whole environment: customers, suppliers, employees, management, the executive team, regulators, etc. Some have argued that only knowledge workers will be affected. But the AI-driven robots that are just beginning to appear seem to belie that.

AI is challenging the way consumers (individuals, businesses, governments, etc.) value products and services. If an organization’s value proposition becomes uncertain in the minds of its customers, serious trouble can be ahead.

Proper Response

The first step is determining what an organization’s value proposition is post-GenAI.

It is unlikely to be exactly what it was before AI. It may also morph and change as AI technology continues to evolve. Given this, how should an organization respond?