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GenAI Transformation Glitches



Many times a technical innovation will generate an opportunity for, or require, a business model innovation.

These vulnerabilities can be prevented or overcome in a combination of ways. First and most important is to be cautious about GenAI information sources. Some otherwise trustworthy media sources cannot be relied upon when it comes to GenAI. Using ways to filter out the noise is important. One of the best ways is to ask questions. Approach every source of GenAI information critically. Encourage reading of technical information, including papers from technical journals. YouTube videos can be helpful. But, there is a lot of noise on YouTube. Be cautious. Information services and consultants will offer to provide “everything you need.”

Finally, as an organization, invest in keeping key technical people current in their technical expertise, particularly with reference to GenAI. This goes for both technical and management roles.

Business Model Interaction

Many times a technical innovation will generate an opportunity for, or require, a business model innovation. This can result in resistance. Some will argue that the new business opportunity will cannibalize existing lines of business. Sometimes the new business model will have the effect of moving budget/power from one part of the company to another, triggering internal political opposition. In other cases, the business model will require changing skill sets in sales, marketing, or finance, again producing resistance. These kinds of vulnerabilities can appear at each of the levels in the innovation funnel.

These vulnerabilities can be prevented or overcome in two ways. Inside the existing organization, senior management can mandate that such business model resistance will not be allowed to influence decisions in the innovation funnel. Another alternative is to create a separate organization that houses the innovation funnel. To overcome this vulnerability, such an organization would contain a combination of business, technology, product, and marketing people.

Discontinuity Between Advanced Technology and Operations

In organizations that have large and powerful operations groups, similar vulnerabilities can exist. They involve all the factors at work around business models. But there can be one further factor. In organizations where operations groups are continuously stressed, there can be fundamental discontinuities between the groups responsible for the innovation funnel and operations. A satirical way that is used to describe this vulnerability is, “Don’t bother me with your ideas about machine guns. I am too busy making swords.”

This is a frequent problem in Telcos. They typically have advanced technology groups responsible for innovation and large operations groups responsible for keeping the network running. A common telco response to this problem is to focus the advanced technology group on international standards groups. Then, rely on those standard groups to drive innovation that the operations group can’t successfully resist. This produces two unfortunate results. First, the innovation process ends up under the control of a small number of powerful vendors whose incentives are to keep selling existing high margin products and services. Second, there is no significant differentiation between Telcos providing service in the same area. This plays a big role in the ossification seen in today’s Telco’s. Similar problems exist in other industries.

One approach that has been tried to prevent or overcome these vulnerabilities is to move individuals back and forth between operations and advanced technology. Unfortunately, experience has shown that those individuals quickly become captured by the new group’s culture. What has worked better is creating specific teams combining dedicated technology and operations people. Doing this on a project by project basis creates a very high hurdle in the approval process, making it difficult to move on from the early levels of the funnel. A better approach is to create a general group that combines technology and operations for the whole funnel. It is also possible to combine these people with the business, technology, product, and marketing people.

Not Invented Here

In organizations where there is a development component as well as technology and operations, there can often be resistance from internal development groups, similar to business model and operations vulnerabilities. This resistance can be based on pride, fear of budget loss, power loss, or other political jockeying. The resistance can be particularly strong when innovations involve inputs from outside the company.



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