My talk at the Walton College of Business for the students of Executive MBA on Apr 26, 2025

1. THEORY OF COGNITIVE CHASMS
“ F A I L U R E M O D E S O F G E N A I A D O P T I O N ”
Dr.TathagatVarma
Executive Fellow (‘25), Indian School of Business
“Cognitive Chasms:A GroundedTheory of GenAI Adoption”© 2025

2. DISCL AIME R
These are my personal views based on my doctoral research and
continuing work in this area.

3. Evolution of AI: Is third time a charm?
https://www.americanscientist.org/article/intelligence-may-not-be-computable

4. The field of AI:
continually evolving
and rapidly growing.
Also manufacturing
serious hype since
1956!
1956
“Every aspect of learning
or any other feature of
intelligence can in
principle be so precisely
described that a machine
can be made to simulate
it.”
– John McCarthy
1967
“Within a generation...the
problem of creating
'artificial intelligence' will
be substantially solved.”
– Marvin Minsky
2016
“People should stop
training radiologists...it is
just completely obvious
that within 5 years deep
learning will do better
than radiologists.”
– Geoffrey Hinton
2019
“Next year, for sure, we'll
have over one million
robotaxis on the road”
– Elon Musk

5. The healthy tradition continues…and so do the results!

6. Is it working?

7. And how’s the ROI?

8. But the show goes on…

9. Gartner Hype Cycle for GenerativeAI, 2024
https://www.gartner.com/en/newsroom/press-releases/2024-09-09-gartner-predicts-40-percent-of-generative-ai-solutions-will-be-multimodal-by-2027

10. So, what are the big questions?
Why:
Why does AI fail every
so often?
What:
What does adoption
mean?
How:
How do we measure
success?

11. Theory of Cognitive Chasms: A GroundedTheory of
GenAI Adoption”

12. Multistage Scaling Strategy (§7.1)
Stage 1:
Explore
Stage 2:
Experiment
Stage 3:
Improve
Stage 4:
Transform
Stage 5:
Innovate

13. Multistage Scaling and Consequents:
Stage 1:
Explore
Stage 2:
Experiment
Stage 3:
Improve
Stage 4:
Transform
Stage 5:
Innovate

14. Cognitive Chasms (§7.2)
GenAI Adoption Failure
Modes
Represent the potential
discontinuities in adoption
4 distinct chasms represent
exponential risks and rewards

15. Hype / Reality
(H/R) Chasm
• "Expectations
Gap"
• Right
technology
must work
Pilot / Production
(P/P) Chasm
• “Scaling Gap”
• Pilots must be
scalable
Technology /
Business (T/B)
Chasm
• “Value Gap”
• Business need
must exist
Business / Social
(B/S) Chasm
• “Safety Gap”
• Societal interests
sacrosanct
Cognitive Chasms (§7.2)

16. Multistage Scaling and Cognitive Chasms
Hype / Reality
(H/R) Chasm
Pilot / Production
(P/P) Chasm
Technology / Business
(T/B) Chasm
Business / Societal
(B/S) Chasm

17. The Learning Mindset : Key Principles (§7.3.1)
Technology is rapidly
evolving
Experimental and
experiential learning
provides the biggest
opportunities
Learning needs to be
both emergent and
pervasive

18. The Purpose Mindset: Key Principles (§7.3.1)
Delivering superior business
outcomes is the starting
point and the end goal with
no finish line
Efficiency improvements,
even though important, are
just the low-hanging fruits
The ability to innovate
continuously constitutes the
necessary end condition of
successful adoption

19. The Decision Mindset : Key Principles (§7.3.2)
Data forms the core of
decision-making
Embedding of GenAI
inside the core value
creation for the firm
Scaling of GenAI
capabilities pervasively
across the firm

20. The Human Mindset : Key Principles (§7.3.4)
GenAI systems are designed
to maximizing the Human
Experiences (HX)
Firms prioritize societal
safety over the profit motive
Humans always retain
executive control of GenAI
implementation

21. Human Mindset
Decision Mindset
Purpose Mindset
Cognitive Mindsets are sequential, accretive, and
cumulative
Learning Mindset

22. BridgingThe Chasm: Multistage Scaling, Cognitive
Chasms and Cognitive Mindsets
Human Mindset
Decision Mindset
Purpose Mindset
Learning Mindset

23. The problem is much deeper, and goes far beyond just GenAI.
Where are these technologies today?
Audio chat
(2019)
Web3
(2014)
NFT
(2014)
Crypto
(2009)
Blockchain
(2008)
Metaverse
(2003)
RPA
(1990s)
AR / VR
(1968)
Smart Glasses
(1960s)
3D Printing
(1981)
Self-Driving
Car
(1930s, 1980s)
Electric Cars
(1820s, 1890)

24. Conclusions (§9.4)
Business
Alignment is key
to realize full
potential of GenAI
Multistage Scaling
Strategy proposes
change as a process
Cognitive Chasms
describe failure
modes
Cognitive Mindset
can help reduce
adoption failures
Cognitive
Decision-Making
marks successful
adoption
Human Agency is
core to successful
GenAI adoption

25. My work…
My Doctoral Dissertation • Theory of Cognitive Chasms:A GroundedTheory of GenAI Adoption: My doctoral
dissertation at Indian School of Business (ISB):
https://eprints.exchange.isb.edu/id/eprint/2340/
• PhD Colloquium at Indian Institute of Management, Bangalore (IIMB), Dec 2024:
https://www.youtube.com/live/UBmkl7Vpr0Q?si=lqw2JJUVhUI8cWL7
• GenAIValue Spectrum – delivering the“true value” from GenAI initiatives: Keynote at
IEEE BangaloreTechnology Conference (BTC) 2024:
https://www.slideshare.net/slideshow/genai-value-spectrum-delivering-the-true-value-
from-genai-initiatives/273734671
• The role of Cognitive Mindset in GenAI Adoption: Invited talk at Project Management
Institute (PMI) Bangalore Chapter Footprints: https://www.slideshare.net/slideshow/the-
role-of-cognitive-mindset-in-genai-adoption-pdf/274055306
• Managing Fast-Evolving GenAI Adoptions: Invited Keynote at Siemens Agile Conference
2024: https://www.slideshare.net/slideshow/managing-fast-evolving-genai-technology-
adoptions/273470070