#AI@Work: Well AI, It’s Complicated?
Clayton Christensen classified technologies as sustaining or disruptive. Existing companies, it seems, have difficulty dealing with disruptive technologies. A great deal of this is based on company culture and management. Disruptive technologies do exactly that, they disturb, unsettle, upset the status quo. AI is a disruptive technology. Blaming only top management for failures is too simple. Loss of key personnel can also contribute. Often it is a combination of changes. New technologies and internal stagnation cause confusion. In other words, even if the company knows it needs to make changes, changes are impossible to implement. The organization’s culture, rigid structure and lack of agility don’t change overnight.
Retail has been feeling the effects of disruptive innovation for years. Innovation and market changes present challenges to department stores and “Big Box” retailers. Department stores that were part of our history and childhood, for anyone over 30, have disappeared. Very few department stores will survive. Kaufmann’s, which was founded in Pittsburgh in 1871, closed its doors in 2006. Gimbles, another predominant department store in Pittsburgh, PA… gone. In 1974 Hess’s, a regional store in the Northeast, had a similar fate. Hechinger is another fatality. Filene’s Department Stores, a Boston based chain acquired by Macy’s… also gone. Hess’s, Hecht’s, Hills, Abraham & Straus, Bonwit Teller, Bon-Ton, Ames, Mervyn’s, Caldor, Rich’s, Wanamaker’s, Foley’s and E. J. Korvette are all gone, and this is not an inclusive list. Even Macy’s is in dire straits and on the way out. How did this happen to an entire industry sector? What changed? Some experts blame it on geographics and the move to the suburbs; others would go straight to Amazon.
Big box retailers and retail chains have also been severely impacted. Blame it on convenience of shopping in your pajamas. Some tried to adapt to e-commerce and new technologies and didn’t make it. Kmart, JCPenny, Sears, and Toys “R” Us disappeared or are disappearing right before our eyes. Electronic retailers like Circuit City, Radio Shack and CompUSA vanished. Beloved bookstores including Borders Books, B. Dalton, and Walden… are all gone. And many, many more: Linens ‘n Things, H. H. Gregg, Gadzooks, the Discovery Channel Store, Sharper Image, Sports Authority, The Limited, Kids “R” Us… Gone. And the list goes on. The purpose of this reflection is not a walk down memory lane, but rather to emphasize how entire sectors like retail can be impacted by change. Many businesses also fall into this category. How can great industries leaders like Bethlehem Steel Corporation, Gulf Oil, Newsweek, MCI, Pan American Airlines, Continental Airlines and Kodak just disappear? The answer is complicated.
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