The Consumer Electronics and Technology Show took place in Las Vegas from January 6 to January 9. The trade show has generated a lot of talk about transformation. Technology breakthroughs are transforming businesses, social institutions, public policy and politics itself.

This is just the latest in a trend where “transformation” has come to mean doing the one single thing that changes everything. Right now, that one thing is applying generative AI. Generative AI is a powerful technology that offers tremendous benefits, somewhat complicated by some serious side effects.

Learn from the past

It is hard to predict what technologies will be added to our toolkit tomorrow, but it is highly likely that new, powerful ones will appear. Thus, true transformation is not responding to one single thing, even if that one thing is generative AI. Rather, organizations, need to implement an ongoing innovation process. Taking advantage of new technology is becoming like breathing.

To breathe, organizations have to recognize, that at the early stages of the introduction of new technology, it is not always easy to tell if it will be successful, what it is truly good at, et cetera. Thus, organizations risk wasting resources on innovations that may prove fruitless. But, at the same time, organizations that wait too long risk becoming irrelevant. Thus, they need a way to move forward that minimizes both risks. That way is to create and use an “innovation funnel.”

We have now gone through several generations of transformation, each generation characterized by a new technology approach. Each approach appears too important not to focus on. Focusing tends to block out everything else.

For each approach, consultants can explain why you need it. Vendors can provide products for it. System integrators can help you implement it. There are conferences, industry groups and training programs about it. What starts as one big technology change that could produce fundamental changes, became a series of profound technology changes.

Some will say that generative AI is a much bigger technology jump than those that came before. Others will argue that each one of the jumps that preceded generative AI was a much bigger jump than what came before. Still others argue that the existing form of generative AI is just the beginning, that new jumps are coming that will be bigger and even that generative AI will gain orders of magnitude greater capabilities.If history is any guide, there will be a next bigger jump — and it is likely not to conform to any of today’s predictions.

Next-generation transformation

Does this accelerating rate of technical change mean that we need to throw out the concept of transformation? No! But we do need a “next-generation transformation process” (NGTP) that recognizes the chain of ongoing dramatic technologies still to come and the need not to abandon opportunities from earlier technologies.

The best way to develop this NGTP is to take the ladder of abstraction up to the next level. That is, define the transformation process not as responding to a single new technology. But rather, on instituting a process. A process to take advantage of both the chain of ongoing dramatic technologies coming as well as from earlier technologies. Doing that suggests that the NGTP focuses on responding to these innovation opportunities in a way that maximizes benefits while minimizing bad side effects.

Some may think that the best way to do this is to pick a single response to each technology as they come along. The problem is that innovation involves risk. There may be technical problems with a particular technology. It may be too early. The technology may turn out not to have the impacts expected. There may be unexpected consequences including negative side effects.

Also, by their very nature, these technology breakthroughs create skill gaps — a lack of people who understand the new technology. The appropriate response may require knowledge and skills an organization does not have.

In general, the best way to address these kinds of risks is to diversify — don’t put all your eggs in one basket. And that is definitely true with the NGTP. This involves creating an innovation funnel to ensure that ideas are identified, tested, selected and communicated to top leadership.

The first step in creating an innovation funnel is that senior leadership has to make it clear that innovation is being sought and will be supported. If this is done correctly, a lot of good ideas will surface. Some will come from people inside and some will come from external sources.

Internal people will need assurance that they will not suffer negative consequences for bringing forward an innovation proposal, even if that proposal doesn’t pan out. External sources need to be met as potential partners and treated accordingly. In both cases, effort must be made to prevent the appearance or actuality of “not invented here” syndrome. This requires an organization that communicates well. The whole organization has to be in sync.

Innovations may come in direct application of the technology or in responding to indirect impacts. Thus, innovation projects may focus on application of the technology specifically or on policy, regulatory, legal or other responses.

Successful leaders will arrange the resulting flow of innovation proposals in a funnel as illustrated. With the right setup, this will be a flow because internal and external people will keep thinking while new technology breakthroughs will keep happening.

Innovation funnel illustration.

The flow will be full of good ideas. Unfortunately, many of those good ideas will not pan out. What is needed is a way to organize the proposals into a portfolio and, over time, sort out the winners — constantly bringing in good ideas and assessing them in an iterative fashion.

For technology implementation projects, this may mean picking the best for early proof of concept work, assessing them and picking the most promising ones for further prototyping. Then, assessing the prototypes and picking the best prototypes for field trials. Then, assessing the field trials and picking the best field trials for full-scale deployment.

To make the funnel work, there must be appropriate budgets for each level in the funnel and leaders at each level who are rewarded based on the quality of the flow — rather than the success or failure of a particular proposal.

Only by implementing constant innovative responses to the stream of technology breakthroughs in this way can organizations harness their benefits, rather than simply chasing after the one “next big thing” in every era. The presence of such an NGTP will be a key indicator of a healthy organization with enlightened leadership.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.