The AI Compass: Navigating Change by Focusing on What Doesn't
Exploring the timeless principles that can help a business through uncertain times.
Eric LeMarque was lost.
In the winter of 2004, the former Olympic hockey player found himself stranded in the Sierra Nevada mountains, facing a life-or-death struggle during a fierce snowstorm. What began as a confident snowboarding venture at Mammoth Mountain Ski Resort quickly turned into a harrowing battle against sub-zero temperatures, prowling coyotes, and his own diminishing strength.
As days passed and hope waned, LeMarque's survival hinged on a simple survival principle: "Water flows downhill and people live near streams." This observation, which ultimately guided him to rescue after seven grueling days, serves as an unexpected parallel to the challenges businesses face in navigating today's AI transition.
Wicked Learning Environments
LeMarque's ordeal exemplifies what researchers term a "wicked learning environment." These are situations where feedback is often delayed, inaccurate, or both, making it challenging to learn from experience. In the mountains, LeMarque grappled with multiple threats simultaneously: cold, hunger, predators, and disorientation. His decisions had unclear, often delayed consequences. Should he conserve energy or keep moving? Seek higher ground for visibility or descend for warmth?
Today's companies find themselves in a similarly complex environment as they navigate the AI revolution. They confront a cacophony of vendor hype, competitor moves, and investor expectations. Some warn that AI could render entire business models obsolete overnight. Others tout AI as the panacea for all corporate challenges. Meanwhile, the technology itself continues to evolve, showing immense promise but lacking the reliability needed for immediate, large-scale implementation.
Just as LeMarque faced life-threatening decisions with limited information, we must make choices about AI strategy without a clear roadmap. What is the prudent way to make bets so we navigate this transition? And how will we know where to place these bets? The parallels are striking: both scenarios involve high uncertainty, potential for significant loss, and the need to make decisions with imperfect information.
Use a Compass, Not a Map
In such environments, maps often prove unreliable or misleading. A map, whether a literal trail guide or a meticulously crafted product roadmap, represents a snapshot of the past and not a reliable guide to current conditions. Instead, both lost snowboarders and business leaders need a compass – a tool that provides direction without prescribing a specific path. For LeMarque, his compass was the principle of water flowing downhill. This simple fact gave him a consistent direction to follow, even when he couldn't see far ahead or comprehend the full complexity of his surroundings. LeMarque's heuristic would have worked for him in different places and time periods. If he had been lost in Europe 300 years earlier, this principle would have still guided him.
Focus On What Doesn't Change
Jeff Bezos, the founder of Amazon, offers one such compass. He famously emphasized the importance of focusing on what won't change in the next decade, rather than what will. In a 2012 interview, Bezos said, "I very frequently get the question: 'What's going to change in the next 10 years?' And that is a very interesting question; it's a very common one. I almost never get the question: 'What's not going to change in the next 10 years?' And I submit to you that that second question is actually the more important of the two."
Bezos illustrated this principle with a powerful example. He pointed out, "It's impossible to imagine a future 10 years from now where a customer comes up and says, 'Jeff I love Amazon; I just wish the prices were a little higher,' [or] 'I love Amazon; I just wish you'd deliver a little more slowly.'" This insight guided Amazon's long-term strategy, leading to significant investments in areas that Bezos knew would remain valuable to customers over time. "When you have something that you know is true, even over the long term, you can afford to put a lot of energy into it," he explained.
This approach has yielded remarkable results for Amazon. Their focus on faster delivery, epitomized by Amazon Prime, has erected a formidable barrier against competitors. By consistently enhancing their logistics network and delivery speeds, Amazon has set a new standard for customer expectations - one that few can match. This competitive advantage, built on the unchanging customer desire for swift and convenient service, has helped Amazon maintain its e-commerce dominance even as technology has rapidly evolved.
Bezos' question is an useful compass for every company navigating the AI or the next technology transition: What won't change for your customers?
Beneath the buzzwords and AI hype, what fundamental job does your customer hire you to do, and will that remain constant? If you can clearly articulate this unchanging need, you can then strategically leverage AI to fulfill it faster, better, or cheaper. This focus on enduring customer value, rather than fleeting technological trends, is what will ultimately determine your success. If you can't articulate that enduring value, no amount of AI-washing will help you in the long run.
As Benjamin Graham, the father of value investing, wisely noted, "In the short run, the market is a voting machine but in the long run, it is a weighing machine." While AI features might win votes in the short term, your ability to deliver lasting value will determine how you weigh in over time. Just as LeMarque's survival depended on the timeless principle of water flowing downhill, your business's longevity may hinge on identifying and serving these unchanging customer needs.
How will you weigh in?