Author: Dean Latchana

A Beijing’s AI Strategic Gambit to undermine the West

An over-dependence on current AI tools risks eroding the deep reasoning and experience in the Western workforce and those in education. As I’ll explain, this is a phenomenon Beijing could exploit as a strategic gambit against the West.

This foreseeable Chinese maneuver threatens to trigger the lowering of Western educational standards and cause an industrial brain drain. Perversely it would be a move unintentionally enabled by Western decisions.

Specifically, short-sighted US trade sanctions are benefiting Beijing. The AI embargo is catalysing a more efficient homegrown Chinese AI industry. This drives commodification, similar to the dumping of Chinese EVs and solar panels, allowing their cheaper alternatives to undercut Western products.

These cheap Chinese alternatives will likely lead to a huge Western adoption. Such moves may lead to the dumbing down of education, the de-skilling of the workforce and an unchecked reliance on systems trained on Beijing’s values and biases. The de-skilling and cognitive atrophy in the West is not the end of Beijing’s strategic gambit.

Like Beijing’s policies to limit social media and gaming for their own youth, they are increasingly choosing to gatekeep and limit AI in its own education system. This contrasts with the Western’s less guarded enthusiasm for their children’s use of technology, like we’ve seen with EdTech initiatives for screen-based learning.

So that is the strategic gambit. It is a Chinese manoeuvre that would result in a civilisational gap in educational attainment, which will have fundamental consequences for the workforce of the future, such as the loss of human judgement.

If left unchecked, it would have immeasurable consequences of Western economies, social cohesion and national prestige.  This is not Beijing hardpower or even softpower at play. Rather it is Beijing once again playing the long-game and using the West’s own short-sightedness against them.

Say No to GenAI solution-first thinking

MIT’s recent The GenAI Divide: State of AI in Business 2025 report states that “The 95% failure rate for enterprise AI solutions represents the clearest manifestation of the GenAI Divide”. It says this is caused not by the quality of the tools, but rather the “learning gap” for both the tool and organisation, and flaws in enterprise integration.

In an attempt to gain efficiencies and innovate, I’ve seen organisations excited to roll out GenAI tools. As the MIT report indicates, they should first fundamentally understanding the systems and people such initiatives are purportedly trying to support.

I believe they ought to do this by first asking leaders to align on the most critical customer & colleagues challenge to overcome, and the business outcomes that are most pressing. Those leaders should then learn how systems, processes and incentives may need to change. Such changes should be explored and measured by trialing different approaches, some of which may utilise technologies such as GenAI.

Such a strategy aligns to the principle of People, Process, Tooling, in That Order. This is one of the Better Value Sooner Safer Happier principles for business agility.

One reason to start with People is that any technological system will not have the tacit knowledge that exists within and between individuals (thank you John Abram for bringing this to my attention). Tacit knowledge is the practical “know-how” that’s difficult to articulate and rarely written-down. It’s often expressed in an unanticipated manner, and only at the time of application.

For example, consider an experienced salesperson teaching a junior employee. During a sales meeting, the latter will learn through observation, imitation, studying body language, and through anecdotal storytelling. These are too ineffable to be derived through studying employee handbooks, process documentation or through GenAI systems.

So, without adopting this outcome-first and customer & colleague centric approach, I fear many GenAI-led initiatives will be fundamentally flawed. They’ll add to the sorry litany of failed technology-focused transformations. The MIT report bares this out.

So, say no to GenAI solution-first thinking. Instead align on the problem to be solved and give colleagues the right freedoms to improve how they serve their customers, which may utilise technologies such as GenAI.

Don’t create pain by rolling out GenAI tooling based on poorly tested assumptions and expect colleagues to use it. Many will suffer in silence, and use the tool begrudgingly. Ironically it’ll likely add to inefficiencies, not reduce them.

Finally, consider employing visual tools such as Agendashift’s Changeban to place a strong emphasis on knowledge discovery and organisational learning. Collectively learn and measure, rather than assuming then integrating!

Contact me if you’d like to learn more.

Time to stop talking about Transformation and Agile?

Economic and business uncertainty means many organisations are retrenching and protecting their operations and market offerings. Cost-cutting, head-count freezes and workforce reductions are likely levers organisations are focusing upon. This indelibly marks the climate within organisations, the concerns of leaders and anxieties of their staff.

There’s a lessening appetite for transformational work and once trending approaches such as Agile are no longer top of mind.

So, as change agents working with colleagues and clients, we need to be very careful using terms such as Transformation and Agile. Directly focusing on such activities and approaches are likely to have little currency and draw little attention.

Instead, when consulting and supporting colleagues and clients, try to pick up on their language and empathise with their position. In confidence, try to help them articulate their concerns.

Use techniques such as Agendashift’s 15-minute FOTO which helps them shift from obstacles to outcomes.

I’m not saying dismiss the values and principles of agility. I’m suggesting having these at the back of your mind, and play them into your client’s or colleague’s situation without hitting them over the head with Agile and Transformation. They’re likely already bruised by ill-fitting adoption of such approaches and initiatives.

Work with them to run safe-to-learn change experiments. Such experiments are likely to focus on protecting value with less – less funding and sadly potentially less colleagues.

So, unless they use them, stop starting conversations with terms such as Transformation and Agile. Instead, use their language, recognise their change anxiety, and co-discover approaches which enable their organisations to respond to a rapidly changing world.

Reflections on The Crux

What do most organisations miss when doing strategic work? In my experience it’s not recognising and addressing the most significant challenge.

I recently read The Crux, by Richard Rumelt, which states strategy work involves focusing on the crux of the problem. The crux is the most important part of a set of challenges that can be addressed and solved by coherent actions.

Strategy should start with the challenge itself, rather than goals, financial targets, a roadmap of technical solutions, org design or some lofty vision.

Let’s consider Netflix. Of all its challenges, its most significant (the crux) is likely to be it facing increased competition and needing to expand globally.

Therefore it’s reasonable to presume its guiding policies would include 1) Invest in producing original content 2) Expand services into new markets 3) Use data to understand viewer preferences

Consequently, its coherent actions are likely to include 1) Creating and releasing original content 2) Target specific countries with tailored content 3) Using data to inform content production and marketing

This example shows how understanding the crux aligns its people on tackling the most significant challenge. It creates shared intent and aligned autonomy. Any supposed strategic activities that do not address the crux, or falls outside of this mix of policies and actions should be questioned.

The Crux makes a distinction between management and strategic activities. For example, it says Balanced Scorecards are useful for managing the current business, not for strategic change. They do not help redefine a business; they are a useful management tool for driving results in the existing business (i.e. the status quo).

In conclusion, when it comes to strategy, I find too many firms do not align on recognising and addressing the most significant challenge, and so lack shared intent and coordination. Consequently they will be wasteful, frustrated and less competitive. The Crux is a superb read which articulates and addresses this all too common challenge.

Practitioner’s insights

Here are three practical steps to consider when advising businesses doing genuine strategy work:

  • Identify the crux: Focus on finding the most critical and addressable part of a challenge. This involves judging which issues are most important, assessing the difficulty of addressing them, and concentrating resources. The ‘crux’ is the point where focused action has the best chance of overcoming the most significant obstacles.
  • Adopt a challenge-based approach: Strategy should be a continuous process of addressing critical challenges, rather than pursuing long-term goals or a fixed vision. Start by diagnosing the challenge, understanding its structure, and the forces at work.
  • Differentiate strategy and management: Strategy work is about defining goals and objectives by understanding the difficulties of overcoming a challenge, whereas management focuses on driving results within the existing business. Strategy is not about simply setting performance goals or using management tools. Avoid confusing the two, as good strategy work is not the same as management work.

Safety and Information Flow

After reading Sidney Dekker’s book The Field Guide to Understanding ‘Human Error’, here are some of my emerging reflections and connections. As a consequence of me forming my thinking, I’ll be developing this series over the next few weeks.

A consistent theme throughout the series is the concept of information flow and the safety culture within organisations. Information flow not only impacts physically safety in many industries; it is also an indicator of organisational effectiveness regardless of their industry. As Ron Westrum states, “By examining the culture of information flow, we can get an idea of how well people in the organization are cooperating, and also, how effective their work is likely to be in providing a safe operation.”

Book summary

Based on my notes from the book, here is a summary (aided by Google Gemini)

The “Field Guide” distinguishes between the “Old View” and the “New View” of human error. In the Old View, human errors are the primary cause of problems, and the focus is on controlling people’s behavior through attitudes, posters, and sanctions.

In the New View, human errors are seen as a symptom or consequence of deeper organizational issues, and the focus is on understanding why people behaved in a certain way and improving the conditions in which they work.

The Field Guide provides examples of practices that indicate an organization adheres to the Old View, such as investigations and disciplinary actions being handled by the same department or group, and behavior modification programs being implemented to address human error. These practices tend to suppress the symptoms of human error rather than addressing the root causes.

Information Flow

In this article of the ‘human error’ series, I relate Ron Westrum’s concept of information flow to ‘human error’.

In Ron Westrum’s paper on The Study of information flow, he writes

The important features of good information flow are relevance, timeliness, and clarity. Generative environments are more likely to provide information with these characteristics, since they encourage a “level playing field” and respect for the needs of the information recipient. By contrast, pathological environments, caused by a leader’s desire to see him/herself succeed, often create a “political” environment for information that interferes with good flow.

Westrum, The study of information flow, Safety Science 67 (2014) 58–63

As Westrum describes in his paper, generative environments are those that focus on mission, where everything is subordinated to performance aided by a free flow of information. Pathological environments are characterised by a fear and threat, where individuals hoard information for political reasons.

Between those environments, he identified bureaucratic organisations which tend to retain information within departments for protection.

These cultural styles determine how organisations are likely to respond to ‘human errors’, such as mishaps and mistakes, and to unwelcome surprises such as project-halting issues. In his paper, Westrum sets out ways in which organisations may respond to anomalous information:

  1. the organization might “shoot the messenger.”
  2. even if the “messenger” was not executed, his or her information might be isolated.
  3. even if the message got out, it could still be “put in context” through a “public relations” strategy.
  4. maybe more serious action could be forestalled if one only fixed the immediately presenting event.
  5. the organization might react through a “global fix” which would also look for other examples of the same thing.
  6. the organization might engage in profound inquiry, to fix not only the presenting event, but also its underlying causes.

High performance organisation achieve success with global fixes and inquiry where the ‘bearer of bad news’ is welcomed and supported by their leaders and peers.

Practitioner’s insights

There are means to reasonably approximate where along Westrum continuum an organisation may be. An organisation’s position along the continuum will likely reveal why intractable problems may be nigh on impossible to address.

In my own work, I’ve helped a financial services organisation monitor their position by conducting regular surveys. For the department in focus, individuals at all-levels were asked to rate anonymously each of the following kinds of statements:

  • Cross-functional collaboration is encouraged and rewarded
  • Failures are treated primarily as opportunities to improve the system
  • Information is actively sought
  • Messengers are not punished when they deliver news of failures or other bad news
  • New ideas are welcomed
  • Responsibilities are shared

This particular set of statements are from the DORA Research.

To understand the state of information flow within an organisation, practitioners should consider employing the same approach.

Connections with other concepts

Over the next few weeks I’ll be adding to this series of posts which makes further connections between aspects of The Field Guide and the following concepts: