strategy – latchana.co.uk

Do less Proof-of-Concepts

The challenge with proof-of-concepts

To understand how AI could be beneficial, many organisations are undertaking a programme of AI proof-of-concepts (PoCs). They’re seeking to demonstrate how such genuinely phenomenal tools could benefit them. I fear this approach is mistaken.

On their own a portfolio of PoCs does not validate whether they’d sufficiently address a prioritised set of business needs. Neither do PoCs validate whether the capability can be integrated and scaled in the field, without duplication or being cost prohibitive.

At best such PoCs are little more than technical demonstrations of a capability. At worst they create distraction, sunk costs and delay.

Introduce discipline

I believe we first need to put technology out of our mind. Instead we need to focus on the problems of customers, colleagues and the organisation. Identify the need before potentially overspending on an AI solution that may go nowhere.

Once there’s common alignment and prioritisation of the problem to be solved, we then need to canvas for possible solutions. Such solutions may not be technological; a solution could be related to purpose, people or process. I often ask whether a problem can be solved without touching one line of code.

Whatever the potential solution, discipline is needed to ensure its given the oxygen (e.g. funding) only if it shows demonstratable promise to sustainably solve the prioritised problem. This represents proof-of-value.

Truthfully, something like only 1 in 10 will graduate from proof-of-concept to become proof-of-value. This is the nature of discovering the needle in the haystack of organisational complexity.

What kind of value?

When assessing a solution, there are a number of frameworks for value. Here’s a couple.

Consider David Kelley’s design thinking framework Desirability, Feasibility, Viability. It checks whether users actually want or need it (desirable), whether we can actually build it (feasible), and whether our business should do it (viable).

Another example is Technology Readiness Levels, which help determine which solutions are little more than concepts, and which actually show value in the field and are not financially exorbitant.

Conclusion

Many organisations are keen to see value from AI and automation. However, they often take a backward approach of expending talent, capital and time to see what proof-of-concepts stick to the wall. This will likely lead to PoC fatigue, frustration and deepen operational messiness.

Rather than take this solution-first approach, organisations should take a targeted outcome-focused approach. This starts with agreement on the problem to be addressed. Then organisations should institute a discipline of evaluating which solutions are proven to show sustainable value.

Underpin the outcome-focused approach with techniques like hypothesis-driven development and Changeban.

So it’s not so much AI adoption. It’s more outcome-first adoption, which may be achieved with some AI solution.

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.

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.

Patterns for Strategic Execution

I’m often asked by leaders to support their organisation to execute their strategies. So over the years, I’ve come to recognise common anti-patterns which hamper organisations from delivering upon their strategies.

In my last article, I shared those anti-patterns to strategic execution. In this article, I’ll share the patterns which support the mindset, ways of working and conditions for effective strategic execution.

But first, let’s remind ourselves of what is a strategy and how it relates to organisational transformation?

Strategy and Organisational Transformation

“A strategy is something which gives consistency over time and contains the essence of how you’re going to be different”
Gary Hamel

An organisation is likely to be employing multiple strategies. Each strategy is a vehicle for organisational transformation and value creation. They can fall into these categories:

Business – In a rapidly changing world, what’s right for the business and the colleagues? Yesterday’s success may not be tomorrow’s.
Competitive market – How should the company differentiate itself? What privileged insights or capabilities does it want to bring to bear?
Customers/stakeholders – What new or existing wants, needs and desires does the company want to address? Which ones should it stop serving?

Uncertainty means an organisation should test & learn which strategies will fit the organisation’s vision. A vision describes what the organisation wants to become; it’s an aspirational and motivational indeterminate future goal.

To move with velocity to drive profitable growth and become an even better McDonald’s serving more customers delicious food each day around the world.
McDonald’s Vision Statement

Now, onto the common patterns which I’ve come to recognise as conducive to strategic execution…

Patterns for Strategic Execution

Shared Vision

Co-develop a unifying vision statement which is both aspirational and motivational for leaders, innovators and the wider business. This serves as a North Star which all strategies coherently work towards, judged by a common set of success criteria.

Strategies as hypotheses

Create a safe-to-learn environment. Then rapidly test which strategies fit the organisation’s vision. Use MVPs to test a strategy’s worthiness where the minimum is done to maximise learning. If you haven’t nailed it, don’t scale it.

Protect Innovators

Appoint a leader who creates time and support for innovators to test, learn and recover from failure without being impeded by the status quo. Leaders must free-up their own time to remove organisational impediments and understand when to encourage teams to push on.

Metered Finance

Like venture capital investment, metered finance is the incremental release of funding judged on the evidence of successful outcomes. Such governance helps innovators know when to persevere, pivot or pull-the-plug on their strategies.

High ambiguity

Handpick individuals to form highly supported innovation teams. Such individuals are able to deal with constant change and novelty. They can cope well with failure, experimentation and can rapidly test their gut feelings.

Social Capital

Once they’ve found early success, innovators will need the support of operators. Operators have the access to capital and scale. Support individuals who have, as Mary Uhl-Bien describes, the Social Capital to bring those two worlds together.

Anti-patterns to Strategic Execution

In this article, I introduce the main anti-patterns I’ve come across. In the next article, I’ll share the patterns which create the mindset, ways of working and conditions for more effective strategic execution.

But first what is a strategy and how does it relate to organisational transformation?

Strategy and Organisational Transformation

“A strategy is something which gives consistency over time and contains the essence of how you’re going to be different”
Gary Hamel

An organisation is likely to be employing multiple strategies. Each strategy is a vehicle for organisational transformation and value creation. They can fall into these categories:

Business – In a rapidly changing world, what’s right for the business and the colleagues? Yesterday’s success may not be tomorrow’s.
Competitive market – How should the company differentiate itself? What privileged insights or capabilities does it want to bring to bear?
Customers/stakeholders – What new or existing wants, needs and desires does the company want to address? Which ones should it stop serving?

To move with velocity to drive profitable growth and become an even better McDonald’s serving more customers delicious food each day around the world.
McDonald’s Vision Statement

Now, onto the common anti-patterns which I’ve come to recognise as preventing strategic execution…

Anti-patterns to Strategic Execution

Seeking complete agreement upfront

Leaders delay strategic execution by seeking consensus that’s further delayed by overplanning. There’s little appetite to test convictions rapidly by starting small and deciding whether to continue based on validated learning.

No appetite and capability

Over investment and comfort in the status quo results in no genuine appetite for disruption, learning and discovery. This can lead an organisation into what Dave Snowden terms Competency Induced Failure.

Innovation teams not protected

Innovation teams are constrained by previous commitments, ill-fitting governance and sceptics that are vested in maintaining the status quo. Know that the status quo will hinder innovation through apprehension, bureaucracy and claims about tradition.

Conflicting incentives & mindset

Operators are habituated to maintenance and continuous improve what already exists. Operators are incentivised to deliver outcomes built upon a backbone of existing success. Such a mindset and incentives are the antitheses of those of the innovator’s.

Disjointed strategies

Often as the result of misaligned leaders following a merger or consolidation, separate leaders champion separate and ill-fitting strategies. These disjointed strategies don’t roll-up to a common set of success measures and are not faithful to a shared vision.

Uninvolved leaders

Leaders are unable to free-up time so they manage strategic execution at arms-length. They do not have the capacity to truly support and co-discover the emerging journey of the innovation team. Neither do they have the focus to remove organisational impediments.

Patterns to Strategic Execution

In the next article, I’ll share the patterns which create the mindset, ways of working and conditions for effective strategic execution.