AI Foghorns and the New Rules of Innovation

The marketplace is full of AI noise, but what does it actually mean for how organizations innovate and learn? Dave and Peter revisit the classic pioneers-settlers-town planners model and discover something unexpected: AI has reversed the flow.

Where organizations once looked up the chain for scaling lessons, now large enterprises are watching small explorers to understand disruption, while entrepreneurs stitch together emerging technologies to solve real problems today. The old playbook doesn't quite work anymore.

We explore what this means for different types of organizations, why pretending to be a pioneer when you're not is a waste of time, and how to actually learn from what's happening in the marketplace instead of just making noise about it.

Key Takeaways:

1. The three-cohort model has flipped. In the AI era, large organizations are looking at what smaller explorers and entrepreneurs are doing, not the other way around. If you're not monitoring the marketplace to understand how others are solving problems with these technologies, start now.
2. Different organizations need different things from the AI landscape. Town planners should watch entrepreneurs for practical accelerators and explorers for early warnings about disruption. Entrepreneurs are stitching together emerging tech with real business problems to create immediate value.
3. Most established organizations aren't pioneering, and that's okay. If you have an HR department and multiple locations, you're not in the explorer space. Innovation labs aren't the same as true exploration. Understand which cohort you're actually in and learn accordingly.

Transcript

Peter: 0:04 Welcome to Definitely Maybe Agile, the podcast where Peter Maddison and Dave Sharrock discuss the complexities of adopting new ways of working at scale. Hello, Dave. How are you today?

Dave: 0:14 Peter, I'm really looking forward to a little bit of a deep dive.

Peter: 0:17 Fantastic. And what are we talking about?

Dave: 0:20 I don't know where it's what it's like with you, but what's been really interesting the last couple of days here in Vancouver, yesterday we had tons of fog really close to the waterline. Like where, you know, and so anybody above that didn't see fog. Anybody below that saw fog. So we've just been a really atmospheric couple of days. All we could hear was foghorns, lots of noises around the ships coming in and out of um the Vancouver kind of waters around here. And the reason I'm mentioning that is I feel that's kind of an interesting metaphor for a lot of organizations shouting out about AI. There's definitely noise coming from lots of different places, whether it's, you know, what is it all about, or where should we be going, or you need to be going here or else. There's these sort of warning foghorns going out continuously. And yet it is really unclear what on earth we're supposed to do. And I mentioned that because I was down walking along Stanley Park yesterday looking out, and there's fog everywhere. And the fog horns might tell you people are out there, boats are out there, but when you can't see them, it doesn't tell you anything about what's going to happen and where it's going to go. So maybe that's a little bit like the AI thing. There's a lot of companies talking about AI, this, that, and the other, and nobody really knows what the consequences of that. How do I take action to take advantage of?

Peter: 1:36 But my thought immediately goes to them, and a lot of them sound like foghorn.

Dave: 1:39 Yes. The foghorn of AI, um, kind of, you know, the vocabulary that goes with I I I I think it's an interesting analogy.

Peter: 1:50 And where there's there's certainly, and I've seen this, uh, that organizations are looking at their peers in the marketplace and seeing what they're doing. And hey, that guy down the street, he says he's got AI all over everything. We've got to get AI all over our stuff now, too. And it's there's very much that sort of keeping up with the Joneses type uh behavior going on.

Dave: 2:12 Well, actually the energizing, like we have to do something, we have to do something. And but the vocabulary is not detailed enough. So, what does it mean to do AI, B AI, more of it, less of it, whatever it is? And so there's a there's a sort of a by definition, we're tripping over ourselves with a lot of push pressure for action, but not clear what that action could be.

Peter: 2:36 It's and it's perhaps also they might be the foghorn might tell you that there's a ship here there, but maybe there isn't. Maybe it's you know just a very loud seagull.

Dave: 2:45 Well, yeah, or or it's moving in a different direction, or it's not, you know, it's just so I I feel um I and I think this is where you and I spend a lot of our time is taking ideas and and trends in the marketplace and breaking them down into the beginning of some sort of rationalization so that our organ the organizations, the clients that we work and kind of go, okay, I can I this I should be worried about, this we can ignore for the moment, this we need to maybe start exploring or look for partnership or take over.

Peter: 3:16 And and where when we were preparing for this, we were talking about uh there's a there's a model that's been used uh over the years to describe uh the sort of types of organizations in terms of pioneers, settlers, and town planners. And we were we were discussing how the introduction of AI perhaps changes some of the aspects of that model, or at least some of especially with some of the behaviors that we're seeing in the marketplace and how these organizations are maybe adapting their behavior as a consequence of uh AI technologies in the marketplace. And it leads you down some interesting avenues of exploration, perhaps. Yeah.

Dave: 3:52 And I kind of like that bringing an old concept together with, I mean, it's no longer new, but with with a very recent sort of uh shift in in the transformation space and digital, how they can overlap and where they work and where they change, as you say. Maybe before we dive into it, pioneers, settlers, town planners, model, you want to just describe the sort of traditional way that's thought of in transformation circles?

Peter: 4:15 So let's think of so pioneers are your young, hungry companies that are out there exploring, innovating, creating products. The products are going to sort of mostly work, um, but they're not necessarily fully fledged yet. They're they're exploring and innovating. And they tend to be your small startups, tend to often be where uh fit into that pioneer space. Settlers are the evolution of that. Settlers are where those uh pioneers have often grown up into hey, now I've got gone and taken that prototype and I've turned it into a product that the marketplace wants, that uh we can now distribute. And we found a product market fit that that's gonna be able to scale. And this is where your uh sort of growing companies often fit, where they're rapidly growing and they're rapidly sort of innovating, uh, but they're much more um intentional about their, they're not exploring as much. They've kind of taken their product and they're starting to figure out how to scale and distribute that. And then your town planners are your larger traditional organizations that have taken the uh those processes and they've baked them into stone. They've like they've built out um very solid uh distribution systems that are really, really good at optimizing for the efficiency of the delivery of those uh services. And so these town planners tend to be your larger organizations that have been around for a while who've figured out how to optimize for uh getting the most out of the delivery of their products.

Dave: 5:43 And that process from what you're describing is very much a sort of um pioneer to settler to town planner. So you're not necessarily disrupting the towns, it's more how do you move new ideas from a pioneer concept which gets absorbed into or used by the settler mindset, if we like, and then that gets sort of regulated slash guardrails put in place and it's sort of locked into a bigger system, which is that town or city and the town planning.

Peter: 6:11 One of the interesting pieces of that model uh is that it's often thought of as that uh settlers take their ideas for how what am I gonna do to scale this from the town planners? They've got large systems, and so the the settlers look at those large systems and figure out well, how is how is such and such doing this? How are they scaling it? So we're gonna take those ideas and we're gonna incorporate them into our processes and practices. And similarly, the uh the pioneers would take the ideas of, hey, look, that we we need to grow, we need to scale this, we need to turn this into an actual operational product, and we'll look at the settlers and we'll figure out how did the settlers do this? What are they what are they doing differently from us that we can now incorporate into our processes and practices?

Dave: 6:54 Or maybe even what are the settlers doing that doesn't make sense that we can invent some explorer and create that's gonna solve a particular problem that comes. Now, and I think our in our conversation as we're exploring this, if we just start with the pioneers, that that really feels like the word that comes into my mind rather than pioneers is explorers. These are these are the organizations, the small groups of kind of um, in some ways, crazy people who are going out and trying to find things and they don't know what they're going to find, but they just want to explore. And so they're beginning to they they don't have any of the rules of town planning, settler kind of rules. They're going out, really trying to re uh rethink or look for things which are just not normal, not not kind of accepted as a traditional way of doing it.

Peter: 7:40 Yeah, and and the interesting thing, I think explorers is a good way of describing it. And I think AI technologies enable that because it's the my my access to information has suddenly exploded. My ability to go and find out about information or how to test things or bring information together or to try something out has exploded much more than it was before. Well, I was very restricted before as a pioneer. It was it was a lot of effort and I had to borrow lots of money to to try things out. Now I can really explore. I can go in lots of different directions, try lots of different things um relatively cheaply to find out what is the what is the right direction that I should be going in. So I can explore much more broadly.

Dave: 8:20 Well, I'm just as as you're describing that, I'm thinking if if the settlers and the town planners have roads with carts and wheels and all the rest of it that go with it, but the explorers are looking at things like jet end flight, the two they don't need one to need the other. I mean, it doesn't make any sense. You've got to go explore and a completely diff place rockets and jet don't need roads, a road system wheels and all the things that go with that. They they might use them incidentally, but you can your paradigm shifts completely. And I think that's where when we look at these explorers, we're looking at uh, and again, we've both of us kind of through a lot of the work that we're doing, we get exposed to these tiny groups of people who are just rethinking how business is done. We come from that space of here's how a business works. We can look at it from sort of a value chain model or that view of a traditional way a business is working. They're not encumbered with any of that. They're looking at like what we can do with this technology, this emerging things that we have, and build something completely unique and then go find a pub.

Peter: 9:21 Yes, yeah. And that that that's a quite a different sort of strategy than we've had access to before, really. And uh so it's it's driven by that new capability in the market. Uh the one of the interesting things there is that these organizations that are more in that growth phase of that settlers phase are looking at those explorers and um saying, Oh, that looks interesting. Uh, I think I could use that.

unknown: 9:45 Yeah.

Peter: 9:46 So which is a reverse of the traditional pattern. Yeah. See. Um so there's a it's sort of going it's coming the other way. It's taking the saying, oh well, how could I take that and incorporate it? Or maybe I'll just buy them. And we're seeing it.

Dave: 10:01 Or I'm going to become one of their early customers and we're going to figure out where it's going to go. Because if you look at things like the video that's going on, there's a lot of areas that we don't know exactly where that's going to go, but there all will be a number of those sort of settler organizations where that technology is an ingredient to a broader problem that they're identifying and needing to solve. And they're now in that position where they've they're beginning to be able to see how that particular technology, coupled with something from somewhere else, and maybe something they brought with them, if we stitch this together, there's this very real business problem that can go and can be solved as a result. The analogy we were just talking about was things like Clio, where you've got legal and all of the work that goes into the legal research and the preparation for looking at legal documentation coupled with language, large language models and what that allows you to do, how it allows you to speed up that whole analysis. There feels to me like one of those seppler organizations where they're picking some technology, emerging technology that has and some of their own experience and problems and coming together with something which is better formulated than the existing traditional ways of working.

Peter: 11:05 Yeah, and I'm wondering where that goes. And if we were to think of the explorers then becoming more sort of structured in how they do things and how they they fit together. And they're not necessarily just coming and settling to operationalize that, that they're becoming more about, oh, how do I how do I grow and expand and diversify and look at uh different avenues and different directions I could possibly go in? Um so they the these organizations that are in that gross phase, they're they've now got opportunities to start to look in different directions and where they can potentially go. How does that relate to well the the the town planners I think are uh looking at all of the chaos going on around them? Um they're looking at their large structured um systems, which are designed to uh process large amounts, large volumes, looking at, hey, we've got these systems in place and they and they work, but I need to figure out how do I take advantage of all of this, how do I start to optimize those systems. But it's very hard at that scale that you've built over all those years to uh significantly replace the systems that are fundamentally making you money and fundamentally keeping you in business. So there's we're seeing again that reversal where they're potentially looking at the the settlers and the explorers. We need to come up with another name for the settlers, I think. Maybe hunters or growers or farmers or something where we they're they're taking a look at them and saying, okay, how do we, these people have taken those ideas from all of those explorers and they started to turn them into something that might be worthwhile. How could we then incorporate that to start to see how that modifies some of our systems and how we're going to do things and what might change in ours?

Dave: 12:43 Is that not the entrepreneurs? Just I I think this is a great point that you're addressing there. And if if the pioneers are becoming the explorers, they're really going out and trying to find opportunities, things that we hadn't thought about. The entrepreneurs are the ones who are doing the maths of hold on, this technology is emerging, we've got an opportunity. This is how we've worked in the past. There's a gap here that we can arbitrage.

Peter: 13:04 Yeah, possibly the success, the successful ones at least.

Dave: 13:07 Yeah. What I've as you were describing, so I've just come back from spending close on a month in in Europe, mostly in the UK. And one of the really interesting things, driving around, I've spent a lot of time driving around the UK. This is related to that town planning piece. One of the areas where technology has really been put to practice in the UK is in traffic calming measures. Whether it's cameras, whether it's all of the data around how traffic does what it does in crowded countries like we see in the UK and Europe. And uh one thing that really struck me, and again, being based in North America for quite a while now, you get used to the idea that traffic cameras are rare, and if you do see them, you kind of you can figure it out. Whereas what I've found going back this time is really there's it's expanded quite considerably. That town planning mentality of we have an uh kind of an ecosystem in place, we know how that one's supposed to work. There's some technologies that are going to allow us to manage, regulate, control whatever it is that the town planners are looking to do. And all of a sudden, that's what seems to be coming out in that area. So that town planning of using those emerging technologies that what I'm thinking of is now as the entrepreneurs or the settlers are pulling together, but using it to do more of what they're already doing.

Peter: 14:26 Right. So so they're using it to um create more of the same things.

Dave: 14:31 Well, more structure, more, I mean, control, I realize is is a tainted word, but more as a town planner, you're interested in being able to facilitate um commerce and and living and workspaces and all of these different things. So they're taking those technologies and they're allowing them to do more of what it is that they're trying to get to, whether it's free flow of traffic in my example, you put it.

Peter: 14:54 Yeah, yeah. And well, that that brings you into an interesting set of conversations around uh put placing limits and guardrails on things enables you to go faster because we understand that 100% utilization grinds you to a halt. But anyway, absolutely, absolutely, yes.

Dave: 15:09 But let's let's not get uh let's not kind of get dragged off on that one. Let's maybe turn it around. So if we have this model of sort of explorers now feeding into or inspiring the entrepreneurs who in turn are feeding into and inspiring the town planners that we haven't come up with a second more aligned word for, phrase for. But what are the consequences as a business, as an organization? What can they learn from?

Peter: 15:34 So I think the I think one of the big pieces is that as an organization, you should be doing, you should be looking around at what are others doing, how are they using these technologies? Uh, what are people in your space solving with these technologies and thinking about what does that mean for me? Like how can I, if I look at my fundamental business process, how might they change as a consequence of this? Um, there's so there's that, there's that piece of it for sure. It means it means monitoring the marketplace. I think that's probably from the for the purposes of understanding these cohorts, is I think that's probably the most important thing that you could take from that. Also learning, especially looking at how those explorers are doing the things those explorers are doing, and thinking about, well, my business processes that operate at this scale under these regulations operate this way. Um, how how are they doing what they're doing? Um, are there things there that I can incorporate? Um is it that is there stuff that I can change?

Dave: 16:31 Let me try and paraphrase what I'm hearing because I think there's some really I I feel like we're focusing really on the the entrepreneur settler space for the minute, because what I feel like there is number one is we're watching the explorers to find out what they discover. Yeah, how might we use some of that technical exploration, the results of that to put it together, stitch it together with an opportunity that we can see from a town planner's perspective that we can put together. But there's another element which I find quite interesting that you're describing, is watching what's happening in that explorer space with a view to understanding how is that going to disrupt what we're up to.

Peter: 17:08 Yeah.

Dave: 17:08 What how are they gonna break the rules, break the frameworks that we're used to working in? And I feel like that's not just in the uh uh entrepreneur-settler space, but it's very definitely in the town planner space because they're probably gonna be more impacted by that, not less impacted. When the rules break, that town planning has to reform around different rules.

Peter: 17:30 Yes, exactly. Um otherwise you may find yourself in a Kodak moment. Uh the there's a famous story there, yes. Yeah, uh it's it's understanding and being prepared for it, because there there may be potential that it doesn't seem like it will fit into something that you're doing, finding the right way to understand uh if I that's a that's another clear aspect of this. You really truly need to understand the value chains within your own organization to understand how these technologies might be applied, where might they be applied. And if you're not seeing something uh in the marketplace you expect to, then perhaps that gives you an advantage.

Dave: 18:09 But I'm thinking, as you're describing that, I'm thinking the town planner space is looking to the explorers and the and the settlers for things that they can use.

Peter: 18:18 Yes.

Dave: 18:18 Because because there's no point looking at the um, sorry, they're looking at the the uh entrepreneurs and the settlers, not the explorers. There's no point looking at the explorers. That's not going to translate into something that the town planner groups can. If you're a large organization, say you're working in insurance, you've been doing no insurance for decades, you're you're not looking at how the insurance market might suddenly be torn apart and reinvented as a consequence of what's happening in that explorer space. You're looking at what are the emerging technologies that are coming out of the entrepreneurial space to say how can we leverage those, how can we optimize, provide a better service, a cheaper service, run our organization more effectively.

Peter: 18:55 Yeah. And one of the pieces I'm definitely seeing there is where these things are getting applied in these organizations. There's there's another side on there's another piece on the other side of that is who are your customers and who's buying this from you. And do your customers actually want any of this?

Dave: 19:08 There's a whole there's a such an interesting conversation of just looking how does that space of customer that space change? Yeah. Because we've there's a lot of adjustments being I think we should save that for next time.

Peter: 19:18 Yes.

Dave: 19:19 How are we going to summarize a few of the I mean we've we've talked enough, I think, at this point. How do we pull structure together?

Peter: 19:25 Uh so I think um we've explored basically the three cohort model of uh organizations there, and we've talked about how it changes in the world of AI. Where in the the previous model where everyone was looking at the level above them for how can I borrow to scale from them, there's an it's reversed almost in the big companies looking at um how can I incorporate this into my environment by looking at what they're doing. Uh so that's a that's a key piece of this. Um, I think the second one is that if you're if you're not doing that, then start doing that is a key piece of this. It's uh it is critical to understand how people are doing this in the environment in the marketplace and where they're being effective and where they're not being effective. But and getting a good handle and understanding on this, um what else might you add to that? That gives us two. You get the third.

Dave: 20:14 I feel that um one of the kind of realizations I'm stepping away with, which I find very interesting, is the A, we've not talked about AR. We did at the beginning, but now we're moving away. And I think that one is it's already changing the length, taking that out. So, as a a town planning, larger organization that's worried about re-continuing to deliver a predictable service to their organised clients and so on, they're looking for accelerators, they're looking for technologies coming out of the entrepreneurial space that are going to allow them to be more effective at what they're doing. And they're looking to the explorer space for um warnings on the horizon about how their world might dramatically change as as the sort of foundations are shaken and challenged and sort of worked with. In the entrepreneurial space, I find this interesting piece of looking towards the the areas, room for improvement from the town planner piece with the emerging ideas, technologies trying out different things that are coming out of the explorers and feeling like those ingredients, how do they stitch them together to create something that has value right now that can be kind of sold upwards? So that one feels really tight there. And again, I think uh too many to just to sort of close that out is if I go back to the sort of pioneers, settlers, town planner concept, you often see organizations trying to be the pioneer or trying to say that they are pioneers and their innovation is high and things. And I think one of the key learnings is that pioneer space is probably for most of us in organizations that already have a head of HR and you know presence in multiple locations and a certain customer base, we are not pioneering. That isn't the exploration pioneering space. Whereas in a lot of the time we pretend we're innovating, there's that whole talk about you. create lab or a or an offshoot that that isn't what's happening now with the sort of pioneering explorers piece.

Peter: 22:05 Yeah, it's going much faster.

Dave: 22:07 That too, yes.

Peter: 22:08 Well awesome Dave. It was uh wonderful to uh have a chat as always. I hope there's uh some valuable nuggets that our audience can take away from this. I look forward to next time. Yeah, till next time. You've been listening to Definitely Maybe Agile, the podcast where your hosts Peter Maddison and Dave Sharrock focus on the art and science of digital, agile and DevOps at scale.