By Donald Farmer, Principal, Treehive Strategy


  • The standard approach—funding a single AI project to justify itself—is prone to failure. First-time AI project failure rates are 70–95%. A single failure can collapse the initiative.
  • Fewer than 10% of companies successfully scale AI. Many never map the broader picture, funding only one project and retreating after failure.
  • Alternative approach: Map the total AI opportunity across the organization before approving projects. Lead with operational pain points, not AI capabilities.
  • Threshold filter: Only pursue problems with a minimum value (e.g., $10,000/month). Deferring smaller issues preserves focus while not discarding them.
  • Example: A firm spends six person-days/month on content review at $2,000/day → $12,000/month in lost billable work → qualifies for the roadmap.
  • Roadmaps make failure of individual projects less risky; the organization simply moves to the next opportunity.
  • Prioritize fast-to-ship initiatives, sequence larger opportunities through small, self-contained steps, and let each stage fund the next.
  • Roadmaps are programs of learning, building conviction, capability, and credibility over time. Executives should ask not whether a project will work, but how much AI could genuinely be worth to the organization.

Tacit Knowledge and the SaaSpocalypse (From Chris Walker)

  • Triggered by Anthropic’s Claude Legal release coinciding with $285B loss in SaaS market capitalization.
  • Despite automation, demand for forward-deployed engineers (embedded in client organizations) surged 800% in 2025.
  • Tacit knowledge: From Michael Polanyi – “we can know more than we can tell.” Expertise often cannot be fully articulated.
  • Tacit knowledge cannot be digitized; AI cannot learn what cannot be expressed in data.
  • Even if AI handles routine tasks, human work increasingly focuses on tacit-knowledge-intensive problems.
  • Predictions: By 2028, either AI will handle complex workflows without humans, or companies with deep embedding practices will thrive.
  • The SaaS market is being reshaped: survival depends on embedding deeply enough to access tacit knowledge, not just producing code.

How IBM Granite Became a Leader in Responsible AI

  • IBM Granite family of language models scored 95% on Stanford’s Foundation Model Transparency Index, 23 points above the next-best model.
  • Transparency and ethics were designed from the start.
    • Indemnified models against copyright claims.
    • Open-sourced weights under Apache 2.0 license.
  • Data pipeline tracked 10 petabytes of training data, full lineage, and provenance; restricted to authoritative US/EU sources.
  • Automation tools:
    • Data Prep Kit – deduplication, filtering, tokenization, scalable infrastructure.
    • DiGiT – reduces fine-tuning from 3 months to 3 weeks, generates targeted training data for specialized tasks.
  • 80 explicit safety policies govern sensitive topics, each accompanied by teaching examples.
  • Human contributors supplement synthetic data for diversity, especially in safety and multi-turn conversational tasks.
  • Independent ISO 42001 certification and external validation underline process discipline as the source of Granite’s transparency.

Reflections

  • AI projects should focus on cumulative learning and value across the organization.
  • Tacit knowledge remains a critical differentiator; AI complements human expertise rather than replacing it.
  • Responsible AI requires embedding ethics, transparency, and governance into design from day one, not retroactively.
  • IBM’s Granite demonstrates that disciplined process, rigorous data management, and human oversight can deliver measurable leadership in ethical AI.
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