Disrupt or stay dial-up: Why systems thinking can help leaders embrace AI

Why staying stuck in legacy thinking could cost your business and how systems thinking can unlock AI’s real potential.

In brief:

• Leaders must shift from viewing AI as a bolt-on tool to understanding it as part of a broader, interconnected system.
• Emotional resistance to change is natural, but systems thinking provides a framework to navigate disruption constructively.
• Countries like New Zealand risk falling behind unless they reframe AI adoption as a strategic imperative, not a threat.

Right now, we’re in the AI equivalent of a hard-coded HTML website circa 1996. It’s novel, but it’s not yet delivering broad business value. And that is breeding denial.

I started my career as an engineer in the Royal New Zealand Navy, managing complex combat systems. In that world, mission clarity is everything: What are we trying to achieve? And how do we optimise a finite set of interconnected resources to get there?

That mindset never left me. That’s why I don’t see AI as a chatbot that can write a poem in three seconds or a tool to automate slide decks.

I see a system. Generative AI and large language models are just one part, working alongside machine learning, reinforcement learning, knowledge graphs and other tools in feedback loops that reshape how businesses operate, compete and create value.

But most business leaders don’t think like systems engineers. They’re bolting AI onto the edges of their organisations, hoping it doesn’t rattle the frame too much. They aren’t asking: What are we trying to achieve? How do we redesign the system to make it happen?

Hard-coded hesitation

According to the recent EY AI Sentiment Index, Aotearoa New Zealand and Australia lag behind most of the world in trust and enthusiasm for AI. 

Only 33% of New Zealanders are ‘excited for the future of AI’. In India, that number is 84%. In China, it’s 83%. The message is clear: the world is embracing fibre; we’re still on dial-up and telling everyone we like it just the way it is. 

There are cultural and demographic reasons for this hesitancy. And this denial of where our future is heading is not irrational. Leaders here have spent decades building businesses they believe in. They’re deeply invested, professionally and personally. The last thing they want is to overhaul the system they’ve built. 

But this emotional and strategic attachment leads to denial, and denial doesn’t stop disruption. 

We’ve seen this before. During the Industrial Revolution, mechanisation was dismissed as a fad, and the Luddite movement was a violent response to change. But disruption marches on. 

Adapt and advance

Companies that failed to adapt – Kodak, Blockbuster, Nokia are the examples everyone points to – got stuck in denial. Others saw the threat, experimented and ultimately thrived. 

This is where systems thinking comes in. 

AI is an expert system. And senior leaders already understand complex systems – because they built them. They know the dependencies, the risks, the hidden flaws. But this knowledge only matters if they stop clinging to legacy models. 

A systems lens helps leaders see how AI interacts with talent, data, regulations and customer trust.  

But AI, like the spinning jenny, the smartphone or streaming services, is agnostic to the human emotional journey. Systems thinking shows where AI fits. Human leadership shows how to help people move through the emotional arc — from denial to acceptance, and ultimately, to action.