Apr 24, 2025 | AI, Marketing, Strategy
‘Lean thinking’ is a mindset and toolbox to drive optimisation. Little more, beyond the use of common sense and humanity.
Prominent amongst the tools, and the one I probably use the most is ‘5 why’.
AI has given us an entirely new use case that leverages the insights that a 5 why process when done thoughtfully can deliver.
Prompt development.
There are now hundreds of prompt templates and mnemonics emerging from the woodwork, many claiming to be ‘the one’.
All I have seen use a variation of the Lean ‘5 why’ tool.
Most AI users look at the first output of a prompt into any of the LLM tools, and it is sub-par. Generic recitations of what the trained information base reflects as best practice. The beauty of these data driven assistants is that you can push back as much as you like without them taking it personally.
You can point out areas of failure, misinformation, gobbledy-gook, or imagined fairy tales. You can ask for specifics, deeper analysis, sources, or give it examples. The output then improves with each iteration.
You can also ask it what you might have forgotten to ask, or has been missed for some reason, and ask for suggestions. This interrogation of the tool can reveal things you would not have thought of under normal circumstances.
Go through that process 5 times, and in all likelihood, you will not only have something entirely different to the first response, but it will also be infinitely better, and tailored to the need. You will have cleared away the unnecessary, banal, insignificant, and generic, leaving a response that equates to a first principle response to your evolved prompting.
Continuous improvement by AI driven lean thinking.
What a boon!
Apr 11, 2025 | AI, Governance, Management
Anyone who has engaged with any bureaucracy at multiple levels will tell you that what is said at the top often does not get down to the operational levels.
It seems not to matter whether the bureaucracy is private or public, multiple levels result in an increasingly dense set of rules and regulations that should be followed and are often a default excuse for not thinking.
However, it does seem also that public bureaucracies are less able to accommodate any sort of flexibility in the absence of instructions from on high, and even then, it is difficult.
AI has invaded and won significant ground in private domains and will be rapidly deployed as businesses seek the potential productivity gains as a source of competitive advantage.
What of government?
There is no competition in the public bureaucracies, their political masters come and go, policies change, as do some senior people, but largely, they remain intact. How will they adapt to the new world of AI?
In a word, very slowly indeed.
Regulations, behavioural rules, and protocols set at the top level, are filtered down through organisations. At each level, they are imposed with the addition of seemingly necessary additions in order to stop those who seek to find ways around the rules, and in the eyes of the bureaucrats subvert the intent of the rule.
This imposition of rules compounds to the point at the operational end that navigating the imposed landscape becomes incomprehensible to normal people.
I spent time recently navigating the minefield surrounding the simple transition of my mother from her own home to an aged care facility.
The process required two apparently warring bureaucracies to simply recognise the assets Mum had, combined with the aged pension through Centrelink, and the War widows’ allowances due to Dads military service in New Guinea. My sister who did most of the work required, is an intelligent educated woman, but was driven almost to despair. The nonsensical overlapping and duplicated requirements of both departments, where it seems a comma in a different place in similar lodgements to each department necessitated we start from scratch with both after the applications were deferred or judged void.
The operational individuals were largely helpful but completely restricted by rules to which no variation was allowed. Yet, the policies stated from the top are designed to make the lives of aged Australians, particularly those who have given much to the country as have war widows as comfortable as possible.
What happens in between these levels.
Regulation begets regulation upon regulation as the rules are cascaded down through the organisations. As each level sets about ensuring they are not accountable for any misdirection of funds, and therefore difficult questions, the mess becomes ‘Gordian’.
All this does is catch and frustrate those trying to do the right thing, while the ‘smarties will always find a way through,
Into this maelstrom walks AI.
In theory AI should ease the logjam, making most of the necessary form-filling and translation of details from one point to another automatic and easy.
In practice, the flexibility and agility that AI platforms are capable of will be adopted very slowly by public bureaucracies. They require changes in culture, operating processes, and inter-departmental collaboration in more than just words and press releases.
Those changes seem unlikely despite the urgent need.
Apr 7, 2025 | AI, Governance
As we come to rely more and more on the output of machines, we tend to forget that they are intrinsically binary operations.
The output is either black or white.
One little mistake or variation in the output that can be driven by something as simple as the placement of a punctuation mark in your prompt, can deliver very different outcomes.
When you string a series of tasks together even simple ones that rely on the output of the previous output, any error that is not picked up will be compounded.
Therefore, my contention is the greatest problem with AI is not technical but our belief in the output and that any error anywhere in the system compounds.
The danger of compounding errors is obvious. One simple O-ring worth a couple of dollars that was not malleable enough to accommodate the cold weather on that January morning in 1986 led to the end of the Challenger space shuttle. The unusually low temperature that morning was not anticipated, and so not included in the variables that determined the specifications of every piece in that multi-billion dollar vehicle.
Boom.
The only antidote to this misleading, erroneous and potentially nasty outcome is human scrutiny. We may have been released from the repetitive and mundane parts of all our jobs, but that release comes with a price: we simply must be highly sceptical of the outputs, and subject them to vigorous scrutiny starting with first principles.
Mar 24, 2025 | AI, Governance, Leadership
It appears to me that there is a wave of intellectual agoraphobia driven by the sudden emergence of AI platforms and tools gripping many of those I interact with commercially.
My recently departed mother, in the last year or two of her life found it hard to leave the immediate environs of her home. She increasingly felt intimidated by change, and the tension of just interacting with the unfamiliar.
To me it looked like mild agoraphobia, but my siblings thought it was just a retreat from change because she felt unable to deal with it easily.
Agoraphobia is not just a fear of wide-open spaces or going outside the house. At its core, agoraphobia is about the fear of being trapped in situations where escape might be challenging, help unavailable, with no place to hide beyond the familiar. It’s a state of mental paralysis, driven by the anxiety of the unknown.
How does this psychological insight impact on an enterprise?
Plenty of businesses suffer from what could be called ‘commercial agoraphobia’. A stubborn unwillingness to venture into new territories, innovate, and embrace change. At board level it is passed off as a Conservative Risk profile’ in shareholders best interests.
In fact, directors and management are reluctant to leave the familiar comforts of old processes and established wisdom.
Even worse, some institutions and enterprises deliberately build barriers to prevent any sort of change filtering in, usually in the name of probity, governance, and consistency. To my mind that preference becomes intellectual agoraphobia.
This condition traps otherwise intelligent and capable leaders into rigid, immovable thinking, dismissing the forces exerting pressure on the business as passing. Even as change surrounds them, these people stick to the comfortable routines of the past.
This brand of agoraphobia thrives in echo chambers, fed by confirmation bias and groupthink. It is the subtle saboteur of growth, quietly whispering that risk is too high, change too uncertain, and innovation too risky.
However, staying inside this comfort zone guarantees eventual irrelevance.
The leadership of Nokia pre smartphone suffered from this affliction. Similarly, Kodak leadership failed, initially seeing the potential of digital photography, then killing it. Xerox missed the slew of innovations coming from their PARC labs. There is a long list of intellectual agoraphobics in our commercial history. IBM, Blockbuster (who had a leader but fired him as they did not like the message) Olivetti, Borders, and many others, a few of whom saw the light in time, such as Bill Gates’s late recognition that the internet would change everything and successfully pivot.
Intellectual agoraphobia leading to strategic stagnation.
The only antidote? Real leadership.
Leadership is not just about authority or charisma. It’s about the courage to challenge assumptions, dismantle outdated practices, and push beyond intellectual comfort zones. Leaders must confront intellectual agoraphobia head-on, fostering a culture where questions are encouraged, risks intelligently managed, and curiosity and adaptability prized above complacency.
It is like learning to swim as a kid. You must overcome that uncertainty and fear of the unknown to achieve an uncertain outcome.
Small businesses are as likely as large ones to suffer, more so as they often lack the depth of resources that gives large businesses a buffer. The benefit they have is agility, a great advantage in a homogenising world changing as rapidly as the one we currently inhabit.
Artificial intelligence is driving a tsunami of change across our commercial landscape.
Hiding from those changes by ignoring them, or dismissing them as a passing fad, will not be an option for long.
The only antidote is to get out there and play, learn, adopt, get some mud in your eye, and recognise that intellectual agoraphobia leads to commercial irrelevance.
Are you succumbing to Intellectual Agoraphobia?
Mar 13, 2025 | AI
A couple of weeks ago I was asked to do a presentation on the current state of AI in the world of SME’s.
I stumbled across ChatGPT a week after its original release in November 2022, and was blown away by the potential. I have become an utter convert to the utility of AI, particularly for SME’s if they can organise themselves to make the necessary investment.
The scary thing is that I seem to know more about AI than 95% of the owners of SME’s, but by my own assessment, know so little that imposter syndrome is running rampant. Add to that the pace of change, every day, is enormous.
AI is here to stay, and represents the greatest opportunity, as well as the greatest threat to the profitability of SME businesses I have seen in my commercial life.
Following is an extended version of what I set out to say in the short time allocated. I also spoke from a few dot point notes, so it is probable that much of the below stayed unsaid.
AI is rapidly becoming as widespread and essential as the smartphone. Can you imagine not having your phone, and still being able to competitively service customers? Yet, you might see AI as just another tech buzzword, promising miracles but delivering disappointment. If that is your experience, you are in good company; small businesses often waste precious resources chasing shiny tech tools. However, AI is different. Here is how and why it evolved from a curiosity to an essential tool, and how you can adopt it smartly without breaking the bank or losing sleep.
Evolution of AI: From Hype to Helper
Artificial Intelligence is not brand new. It has quietly evolved from basic customer service chatbots to powerful, accessible tools capable of streamlining your daily operations. Think of AI like digital photography replacing film cameras. Kodak thought it impossible, but now everyone carries a powerful camera in their pocket, and Kodak is a shadow of its former self.
Why bother with AI?
AI won’t replace you, but someone using AI might. It is not about replacing your expertise; it’s about enhancing it. Think of AI as your diligent, tireless, whip smart but naïve intern, handling routine, repetitive tasks so you can focus on strategic, creative, and client-facing activities.
For example, imagine running a small retail business. AI can instantly analyse sales data, pinpoint trends, and forecast customer behaviour faster and more accurately than manual methods. Or if you are a consultant overwhelmed with admin work, AI tools can handle scheduling, invoicing, much of your marketing and routine communications, freeing you to concentrate on strategic growth and client relationships. It can also act as your mentor, advisor, and ‘red team’ devils advocate helping you make optimum choices more often.
Costs & Risks of AI: facing reality
You might assume AI is expensive. Not necessarily. Many AI solutions today are affordable or even free, offering powerful capabilities without heavy upfront investments. Tools like Perplexity for research, Google’s NotebookLM for knowledge management, and 11 Labs for professional-grade voice content offer free or cost-effective plans ideal for experimentation. When you consider the costs of subscriptions against the cost of people filling those roles, and as importantly, the opportunity costs that AI enables you to squeeze out, it is as cheap as chips.
However, caution is needed. AI, like a powerful sports car, is incredibly attractive, and extremely useful when used in the right way, with careful driving and clear boundaries. The three areas I worry about most are:
- Over-reliance and hallucinations: AI can confidently produce completely wrong outputs if unchecked, like that GPS driving you into a lake. However, as the tools become more sophisticated, the chance for hallucination becomes reduced, as hallucinations are largely the function of loose, ambiguous, and context free instructions.
- Loss of critical thinking: Blind trust in AI can erode your independent evaluation skills, just as calculators reduced the need for kids to learn the times tables, and computer programs eliminated the understanding built of complex mathematical tasks when using a slide-rule to do the calculations. (for anyone under 60, look up Slide-rule on Wikipedia)
- Security threats: Risks of intellectual property theft, fraud, and data breaches are real if proper precautions are not taken. The ‘pirates’ out there are at least as good as the best ‘goodies’ at leveraging the new tools to get into your pockets, and both are light years ahead of regulators. It really is the wild west, so you need to be hyper vigilant.
Mitigating AI risks
Stay vigilant and proactive. Treat AI like your powerful sports car, exciting and capable but requiring careful driving and clear guidelines. Protect your intellectual property, adopt robust cybersecurity practices, and always critically assess AI-driven recommendations.
Getting Started: Practical Steps for SMEs
Do not bet the farm before testing the market. Start small with a clearly defined business problem:
- Identify one task: Choose a simple, repetitive task consuming valuable time.
- Experiment: Use free or low-cost tools. Learn to develop effective prompts (the instructions you give AI) to get useful results.
- Process mapping and gradual deployment: Clearly outline your processes, identify where AI can assist, and slowly integrate it into your workflows using tools like Custom GPT’s in Chat GPT, or the equivalent on other platforms. The more you use them, the more you will see opportunities to take that extra step, and it becomes an exercise in continual learning and improvement. The more you break down processes into individual sequential actions, the easier it will become to automate them. As an aside, it also significantly enhances the value of your business in exit if a potential buyer sees a highly organised set of SOP’s on file, easily accessible, and readily improved and deployed.
- Focus. There are so many tools now, and more emerging every day, that nobody can reasonably be competent at one or two at the most. So, pick one that suits your businesses use case, and focus on being competent at that one, knowing that if it is overtaken functionally by another, your choice will soon catch up, and probably improve on rivals. The boundaries of what is possible are being pushed at an astonishing rate.
Helpful tools and resources
Here’s a curated selection of easy-to-use tools:
- ChatGPT. Custom GPT, projects, Canvas tools become a personal assistant.
- Perplexity: AI-powered research and insights.
- Google NotebookLM: Organise and analyse your information seamlessly. Free.
- 11 Labs: Create affordable, professional-quality audio content quickly.
- Suno.ai: Music and lyric generator.
- Luma2: Text to video, paid service, but affordable, and impressively powerful.
- Leonardo.ai: Image generator; easy and effective.
Real-world examples
Businesses like yours successfully use AI. Podcasts like Dan Sanchez’s “AI Driven Marketer” and Michael Stelzner’s “AI Explored” showcase relatable small business tools and case studies, highlighting measurable impacts from AI implementation. Influential voices like Rick Mulready, Andy Crestodina, and Rand Fishkin also contribute enormously to the ‘eco-system’ that will assist you to Figure out how to leverage AI tools for practical insights and actions.
AI’s future: Adapt or fall behind
AI will not replace small business owners, but businesses that leverage AI effectively will outpace those who ignore it. Ignoring AI today is like bringing a knife to a gunfight. AI is quickly becoming essential for competitiveness and efficiency.
Think of AI as your newest hire. Talented, scary smart, but inexperienced and naive. With proper training, patience, and clear guidance, this new “hire” can transform your business, freeing you to do strategic work only you can do.
Why not take a small step today? Choose one aspect of your business, pick an easy-to-use AI tool, and experience firsthand how AI can become your next competitive advantage.
Header cartoon: courtesy of Tom Gauld.
Mar 10, 2025 | AI, Leadership
Ever wonder why smart groups often make poor decisions?
Businesses and institutions often slip into ‘Groupthink? From casual groups to formal teams, even when aware of their tendency toward confirmation bias, they naturally favour opinions aligning with prevailing views.
At its worst, Groupthink means ignoring opportunities to consider differing opinions and data and dismissing them when they are presented. This usually leads to choices that with the benefit of hindsight are clearly stupid. Think of it as everyone boarding the wrong train because no one dared to question the destination.
Alignment, that often used management cliche however, is essential for optimal performance. Everyone on the team should clearly understand the direction they’re heading and why that direction matters. To extend the metaphor, everyone on the train knows where it is going, what their role is, what they need to do on the journey to arrive at the declared destination.
True alignment happens when all opinions, information, and data have been carefully considered, weighed, and distilled into a clear consensus. The best choice is obvious, and everyone either fully supports it or at least understands it as the optimal route forward. The strategic challenge is ensuring the destination to which all are aligned, is the optimal choice given the strategic, competitive, and regulatory context.
Are ‘Groupthink’ and ‘Alignment’ synonyms? Or just two sides of the same coin?
Groupthink: Bad. Alignment: Good.
Both can suffer from confirmation bias, even when teams consciously try to avoid it. Alignment can become especially dangerous if unchecked confirmation bias sneaks in.
Many strategies exist to ensure the best choices emerge from challenging decisions. Employing a Devil’s Advocate is one approach to removing any pre-existing bias. It includes techniques like ‘red teaming’, or involving independent external experts for objective interrogation.
Chat GPT 4.5 recently landed in my account with its ‘Deep Research’ capability.
This marks a genuine leap forward for AI.
Earlier models like Chat 3.5 already enabled the asking reflective questions like, “What have I missed?” or “What should I be asking?” Although useful, these prompts typically delivered limited responses.
Chat 4.5 with Deep Research elevates the Devil’s Advocate approach to an entirely new level. It deeply interrogates the topic, reasoning through provided prompts and resources to deliver nuanced, sophisticated, and profoundly useful insights.
This capability changes the game for management teams, provided their commitment to a particular viewpoint doesn’t block genuine consideration of alternatives.
l remember Bill Shorten’s absurd 2012 ‘blind support’ gaffe when asked for a response to PM Julia Gillard’s removal of Peter Slipper as Speaker. He said, “I haven’t seen what she said, but I support whatever it is that she said.” While Shorten understandably wanted to avoid contradicting the PM, his words perfectly illustrate how blindly following a position without any questioning is just dumb. He was however, perfectly aligned with the PM, useful when climbing slippery leadership poles.
