The Two Faces of AI

 

I’m torn…My vocation entails teaching leaders how to solve complex problems both to protect the core business, and to ignite new Growth. My avocation is music - I’m a member of an international band comprising two grizzled veterans & brilliant young players from Europe’s best music schools. In both my vocation & avocation, AI is a blessing and a curse.

Which one will prevail?

AI and My Vocation

AI helps us protect the core business by enabling our management system and helping make problems visible. AI collects data, analyzes value streams, and helps predict hot spots. At the same time, I’m painfully aware that AI agents are shrinking entry level jobs. AI agents are good at core admin tasks & the basic research & analysis new team members used to do. Nowadays, getting that crucial first job is much harder.

Our new Growth work is focused largely on the consumer goods & financial services industries. AI agents enable our sprints. We can run many more experiments & harvest learning quicker.  AI agents also help us analyze & repurpose the existing assets. Years worth of social media content, for example, can be quickly analyzed & reused for new sprints.  We ‘fail fast, fail forward’ with breathless ease.  New assets can be developed & tested while we sleep.

As an engineer, I’m admire & celebrate the splendid engineering & continuous problem solving around neural networks the past twenty years.  Bravo!

I’m also aware that my fellow engineers & I lack the moral & philosophical chops to grapple with the biggest moral challenge of our age: How to deploy the AI genie so as to enhance our lives and reduce suffering while sustaining our core values?

AI and My Avocation

As a musician, I’m acutely aware of AI’s devasting effects on the creator economy. Musicians, writers, journalists, graphic designers, filmmakers and other creators have largely been obsolesced.  Tech companies ‘scrub’ everything they can find and thereby train their ML monsters.  Then they resell us AI slop at twenty bucks a month. Some say we are witnessing the greatest theft of IP in history,

I try to be a good mentor for our young players. One of my core messages is: “AI has destroyed the willingness to pay for creators’ work. We have to accept that hard fact & adapt.  How do we adapt? By becoming ambidextrous.  Develop a second capability that will put food on the table. Be a carpenter, electrician, engineer, teacher, lawyer etc. I do not want you to end up homeless.”

Our band does not use AI to create music – that is unthinkable. We play our instruments with our own hands, we will never use autotune or anything like it. But AI does reduce hassle in the studio. For example, AI can handle the tedious task of eliminating overly loud breathing between vocal phrases.  (I’m a loud breather…).

AI agents help us curate & repurpose our social media assets, as we do in my day job. I engaged a young engineer to develop an AI agent that selects potentially viral content, creates thumbnails & templates for the channels we’re targeting (e.g. YouTube, Instagram, TikTok). AI analyzes a given musical piece’s performance according to our key metrics (Streams, Click-through rate, average watch duration etc.).  Needless to say, I also use him in my day job.

In summary, AI is both a blessing and a curse - in my vocation and avocation.  No wonder I’m torn.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org

Respect for People in an AI World?

 

Is ‘Respect for People’ possible in the age of AI? A generation ago, the Toyota Production System (TPS) doubled down on this idea and changed the world. Their revolutionary idea was to release the ‘genius of the organization’ through ‘Total Involvement’.  Nowadays, more than a few Tech leaders envision billion-dollar companies with ‘very few people – ideally just one.’ Is ‘Respect for People’ a dead idea?

Middle Management is Over…(?!)

At recent conference a well-known Tech leader opined that, ‘Middle management is over.’ His plan to ‘create value’ amounts to 1) continually replace people with AI agents, and 2) maintain a skeleton crew to ‘manage the work’. 

Avarice & nihilism aside, this hare-brained plan ignores uncomfortable facts, the most obvious being: If we fire everybody, who is going to buy our stuff? Other problems include:

·       Work is messy. You have to deal with internal & external customers, supply chain partners, regulators, banks & insurers, and eccentric, quirky people up & down your value streams and customer journeys. How will you sustain these relationships without people?

·       People are good at building essential relationships – AI agents are not. People mentor younger team members. They know the company’s work better than anyone. As Toyota observed, if you release smart, well-trained people on big problems, they’ll release a tsunami of value.

·       AI agents are expensive and can mess up big-time. The question is not ‘Can an AI agent do this for us?’ The question is: ‘Can an AI agent do it better & cheaper than a human, and with less hassle & risk?

The World is More Than Databases & Loops

‘Software Brain’ seeks to flatten the world and all human experience into a series of databases and loops. Big AI agents can then, presumably, issue instructions and ‘manage the work’.  Here’s the underlying mindset: If the word does not align with the database – change the world. 

In fact, all these things that look like a computer are nothing like a computer. The Law, for example (an early, seemingly easy target for AI agents), is much more than databases and loops. It’s messy, ambiguous and full of grey areas. You can argue different sides and come to different conclusions. The same is true of Medicine, Engineering, Accounting, and Actuarial Science, not to mention the Arts including the visual arts, music, creative writing, theatre and film-making.

So, this thing [Life] that looks like a computer is not at all like computer. Not everything is a loop. Not everything humans experience can be captured in a database. Trying to flatten people & life in this way is the polar opposite of ‘Respect for People’.

People do not consider code-writing to be a blessing. The idea of linking all their databases & automating their lives with Claude Co-work frightens & disgusts them. People hate AI because it flattens them. It's not a marketing problem or a bug - it's a center feature of Software Brain.

TPS remains a sharp rebuke to those who dream of a ‘billion-dollar company of one person’. Is eliminating middle management & destroying entire industries something to brag about?  Big Tech leaders are now routinely booed off the stage. Is it any wonder?

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org

The Trouble with OKRs – part 2

 

Does the OKR approach to strategy deployment reflect the 'top-down' mentality of Big Tech? Does OKR reflect the debilitating phenomenon called ‘Software Brain’, and its core premise - Life is just a series of loops & databases…?

Strategy is a Messy Human Thing

As with many fallacies, ‘Software Brain’ contains a significant element of truth. Life is indeed a ‘series of loops & databases’. Study & understand these loops & databased and you acquire a superpower, which used wisely can greatly reduce human suffering.  But life is much more than this.

But if you try to flatten life in this way you may end up becoming hated, no? Life also comprises messy, unpredictable, thorny, comical things like human beings, their memories, emotions, ideas & intuitions; their dreams, aspirations, religious beliefs and shared conscious & unconscious minds; the cycles & rhythms of nature including human nature, animals & the forces of physics, chemistry, biology, the pure ideas of philosophy and mathematics.

Aristotle described the two Worlds of Necessity and Contingency. Software brain seeks to flatten the world to match algorithms, loops and databases, which is a paltry & incomplete reflection of one of Aristotle’s worlds. Does OKR do the same?

The Essence of Strategy Deployment & Execution

Strategy deployment entails engaging the genius of the organization.  The Leader’s most important job is developing a questioning culture, one in which healthy push-back is encouraged.  “Here’s our Aspiration & Winning Logic.  What do you think? Help us understand what we’re missing; give us fresh perspectives and your ideas on how to get better.”

To be sure, I’ve encountered OKR companies with questioning cultures wherein healthy dissent in encouraged, but they’re a minority.  More common is the superficial, unimaginative Aspiration & Winning Logic, mechanically pushed down with little reflection, testing or validation. People tune out – (‘Here’s one more dumb thing I have to do…’). Do they sense that their humanity is being flattened into loops and databases?

The W-V model attributed to the great Shoji Shiba is a fine example of a healthy Strategy Deployment system. Hypotheses continually bounce back and forth between management levels.  “Here’s what we think? Are we on the right track? If so, please translate our shared thinking into tactics for your team, department or site.”

Most importantly, this back & forth between and among management levels continues into & throughout the strategy execution cycle.

Key Attributes of World Class Strategy Systems

When I’m asked by a Board or Senior Team to ‘assess our strategy & management system’, a key step is to walk the value stream backwards, starting with the customer, and moving upstream one step at a time till you get to raw material suppliers. A parallel step entails walking the customer journey backstream, starting with the top of the proverbial funnel.

In my value stream walks, I ask questions like:

·       Are problems visible (even to an outsider like me)?

·       What do people talk about in their huddles (from senior leaders to the front-line)?

·       What’s the organization’s attitude to problems? Are problems hidden, a sign of failure? Or are they, to quote W. Edwards Deming, ‘the process speaking to us’?

·       Do teams have a standard approach to problem solving?

·       How good is the data? Is it complete, end to end, and of high quality?

·       Does the team develop ‘Your Own Data’ (YODA) as required? Or do they passively wait for corporate data?

These are all messy questions that engage both hemispheres of the brain and both of Aristotle’s worlds. Does your OKR process foster a healthy, pushback culture that can sustain & engage? Or does it flatten corporate life?

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org

 

First We Make the Tool – Then the Tool Makes Us

 

I paraphrases McLuhan paraphrasing Churchill. Both knew something about shaping human consciousness. Half a century ago we began an extraordinary experiment by making the personal computer widely available. With Agentic AI, we’re entering a new phase. What would McLuhan & Churchill say?

The Strange Case of Norway

In 2016, Norway gave every child in the country their own iPad or similar digital device. Today Norway is restricting and/or banning digital devices from primary schools. Their rationale: declining literacy & cognitive ability, distraction & reduced focus, and declining social & mental health.

Are we not running a version of Norway’s experiment in private & public organizations around the world? There are two hypothesis in play here:

1.     IF we provide our people with AI tools, THEN we’ll create value – smarter innovation, better processes, higher productivity & quality, happier team members & customers.

2.     IF we do not do this, THEN we’ll fall hopelessly behind.

What Could Possibly Go Wrong?

First we make the tool, then the tool makes us. How does AI make us? On the plus side, AI saves time & effort. In earlier blogs I’ve described how AI agents can free us from the tyranny of the ‘How,’ so we can concentrate on the ‘What.’  I’ve described how AI agents enable our innovation sprints, freeing us up to focus on the ideal product, service, and customer experience.

Will AI & AI agents degrade our ability to think & to create?

Will we see a repeat of Norway’s experience in our public & private organizations? AI is a boon to lazy, dishonest, and unimaginative. Why write, draw, compose, imagine something when you can steal it? We’re seeing AI’s devastating effect on creator economies. Will art & creative endeavour become extinct? It’s no longer an unimaginable question.

There are notorious Tech execs, for example, who boast about ‘gamifying’ music creation. Why play an instrument when you can scrape all the music ever created, pour it in into the gaping maw of your AI, and charge a monthly fee for access? ‘Making music is too hard,’ a Tech Socrates opined recently. ‘You have to learn an instrument & scales, and you have to practice. Our app makes it really easy.’ A similar process is unfolding for essays & other long-form writing, journalism, graphic arts, novels and short stories, and film.

Use It or Lose It

AI & AI agents can make us stupid. How to sustain our edge? Do it yourself – with the help of your AI assistant. Building on earlier articles, we must recognize that AI agents are akin to the big blue Genie in Disney’s Aladdin. They're capable of handling the ‘How’ but hopeless at the What & Why, which is where humans excel. In my view the centaur metaphor – human + machine – remains optimal.

Humans should therefore focus on the What & Why, which includes building alignment around a shared vision, and on deploying the plan to the front line. Humans must build the management system that enables fluid responses to emerging issues, and the front-line capability needed to continually solve problems.

We should engage our big blue Genies in the How, where they excel. And we must continually exercise our cognitive muscles by solving strategic management problems as they arise. The OpEx/Lean and Innovation fundamentals described in my blog, and books remain valid and essential. We just have an eccentric but highly capable new team member to help us.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org

Strategy & Agentic AI – This Changes Everything

 

We’re wrapping up one strategy cycle and beginning another. The leader team is capable, smart & funny, and pushed each another in a healthy way. (I’m their teacher.) This is the first year we’ve seriously applied Agentic AI. What are we learning?

Strategy = What, Why, How

What are we trying to achieve? Why do we want to do this? How do we intend to do it? Strategy entails answering these questions with stories and making discrete choices. “We are going to play here, and not there. We are going to this – and not that. We need this kind of management system and those capabilities to pull it off.”

How has always been our biggest constraint, no? Do we have the data, manpower, and analytical horsepower? Can we grasp & master the complexity in the market, and in our supply chain? Can we anticipate & coordinate changes in demand & supply, while levelling up the performance of our people, machinery, and value streams?

Escaping the Tyranny of the How

How does all this change in an AI world? AI agents make the How much easier. Case in point: igniting new Growth is a core theme in the strategy sessions I described above. Key tactics entail selling existing offerings in new customer segments, and new offerings in existing markets. We have a ton of historical data and related content on the customer, what do they value, and why do they buy, including a rich catalogue of social media content.

If only we could repurpose this treasure trove and thereby run quick experiments to validate our Growth hypotheses. But how are we going to do this? Such work requires judgement & experience. We can’t hire more people and there is a ton of other work to do. Our Growth-related teams are facing burn out & morale may become an issue.

The senior team expressed all these concerns & clearly felt the tyranny of the How. But the How was no longer our constraint. In fact, we able to engage young AI-savvy team members who easily built an elegant AI agent that does the heavy lifting. The AI agent scanned our voluminous inventory, clipped relevant content, and developed necessary templates, and posting schedules congruent with the projects at hand. Taste, finesse and judgement were needed of course to curate & mold the content into a coherent experiment plan. Now we have to execute the needed sprints with intelligence, reflect on results & pivot as required.

Shifting Constraints - From the How to the What

In other words, the strategic focus is shifting from the How – to the What. The constraint is now our imagination, experience, taste, and business savvy. It’s as if we’ve found a magic lantern, rubbed it, and are confronted with a big blue Genie – who will take care of the How. ‘Your wish is my command.’

And so, the constraint is now: What do we really want to do? What’s our shining city on the hill? What does success look like? What’s our ideal condition?

What does all this mean for us? For a start, intuition, taste, and business savvy will become invaluable. AI agents are like very smart research assistants. They’re great at the How but not so good at the Why or the What. Savvy business leaders, by contrast, intuit their customers & market, supply chain & factories, partnerships and relationships with regulators, universities & other important players. They have good taste and know that ‘This will fly, but that will not – unless of course, we make these kinds of changes and present them in that way.’ This is what I mean by taste – knowing how to do, knowing what will fly and what will not.

Do we appreciate how big a shift this represents & the implications for leaders? On a personal level, my role as a teacher & mentor is evolving into curator of taste, shaper of what’s possible, and nurturer of the imagination.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org

The Magic Lamp – Making Strategy Fun Again (Part 4)

 

Strategy deployment & execution are entering uncharted waters.  A magical capability is emerging, a ‘big blue genie’ if you will, of awesome promise, and more than a little peril. How do we harness the Genie’s power while mitigating the risks? What does it mean for Leaders & the practice of management?

The Fundamental Questions of Strategy

Almost all strategies can be expressed in terms of the marvelous mnemonic What, Why, How:

·       What are we trying to achieve?

·       Why do we want to do this?

·       How will we do this?

Indeed, the leader’s Job One is defining our Aspiration (What), rationale (Why) and winning logic (a high-level expression of How). Up until very recently, our What has always been constrained by the How.  Do we have the workforce, technology, machinery, capacity, governance & management system, supply chain, time and energy? Do we have the financial resources to plug gaps in any of these?

My Japanese senseis always encouraged me to imagine the ‘Ideal Condition’.  What does perfection look like?  Imagine the perfect process, production line, value stream, factory, and new model launch. As my practice expanded into new Growth using exponential methods, I tried to imagine the perfect customer journey, innovation sprint, experiment cycle, MLP, MMP, MVP, senior leader playback & pitch, and the like.

But I’ve always felt the constraining How.  Just how are we going to do this, given all the blockers including our ever-present resource constraints? I know I’m not alone.  Keeping an eye on the How as you define the What & Why is an element of prudent leadership. For example, asking a team to do something that is physically impossible is a morale killer. (Do they have any idea what we have to deal with every day?)  But the How can be a dark cloud that intimidates a team & constrains our vision.

The Constraint is no Longer ‘How?’

Agentic AI is akin to a magic lantern. We now have access to big blue Genei with magical powers. The Genie is neither good nor bad, but simply carries out the ‘master’s’ wishes, quite literally, and therein lies the peril. Ask the Genie to ‘increase the value of our investment portfolio’ and he or she will come up with multiple strategies, some immoral or illegal. Most people would agree that we lack the safety systems to constrain the worst of these tendencies.  Hopefully, we’ll have enlightened regulation before too long to protect society from such risks.

In any event, the AI Genie makes the How less daunting. Case in point: our innovation sprints in the consumer goods industry entail significant social media content creation including Shorts, Explainer Videos, Landing Pages in a wide variety of channels. We use these to help answer core Growth questions - (Who is the customer? What do they value? What do they buy or not buy…?).

Repurpose our extensive inventory of assets would be great, but it’s a lot of work and many partners have lacked the resources – until now. In a recent gig we were able to quickly create AI agents that do this work quickly, easily & affordably. Net result: we can run many more experiments, harvest better insights quicker & nimbly adjust our offering so that we get closer & closer to our Blue Ocean. In other words, the How is no longer the constraint. The constraint is now…

Imagining the What

What is the Ideal condition?  My senseis’ question takes on a deeper significance. The ‘What’ is no longer our strategic constraint – our imagination is the constraint.  Can we envision perfection, can we let our imagination free unconstrained by the tyranny of the How?  The Leader’s Job One is now not merely ‘What should be happening?’ but ‘What is the Ideal?’ How long will it take senior leaders and the Board to fully absorb this? And how do we build this into our governance and management system? More to come

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org