Few companies have been able to fundamentally change their operating and business models around AI. The primary obstacle to progress is rarely model quality or data availability, but rather the “last mile” of transformation where technical capability must meet organizational design. There are seven frictions that contribute to this problem: proliferation of pilots, the productivity gap, process debt, the identity problem of tribal knowledge, agentic governance, architectural complexity, and the efficiency trap. To overcome these, companies need to focus on clean-sheet process redesign, strategically capturing knowledge, and managing their new digital workforce.
