The Factors Contributing to Misalignment

Software firms often prioritize their technology over the actual goals of their clients, remaining comfortably distanced from the challenges of client-side implementation.

Procurement specialists create complex evaluation frameworks that neglect real outcomes in favor of abstract scoring.

Consultants produce generic implementation guides that are assessed based on methodologies rather than tangible effects.

Internal IT departments tend to focus on software through their preferred activities and team sizes.

Financial analysts often prioritize standard, easily measurable KPIs.

Management engages in activities like mergers, share buybacks, and various initiatives that, while commendable, distract from core objectives—especially in the short term.

The common theme here is self-referential processes that emphasize internal regulations over genuine progress toward the organization's primary mission.

Should we be surprised? Given the choice, many individuals will gravitate toward tasks that are easier and more likely to be recognized as successful, aligning with their interests. Without a compelling reason to change, it would be unexpected if they acted differently.

This issue extends beyond the private sector.

In his New York Times column titled “The Problem with Everything-Bagel Liberalism,” Ezra Klein discusses how the need for every major project to meet multiple objectives often results in accomplishing nothing.

“You might think that when faced with a significant public issue, the government would leverage its power to eliminate obstacles. However, it often does the opposite, adding numerous commendable goals that create further hurdles, costs, and delays… leading to an overall failure to achieve anything.”

Klein suggests that if we truly care about results, we must focus on achieving them rather than merely engaging in the theater of effort.

“If you believe that failure is a real possibility—perhaps even the most likely outcome—then this necessitates a focus that is intense. There’s a risk that politics becomes more about aesthetics than actionable programs.”

We must ask ourselves: why isn’t there a stronger push for this intense focus? Why aren’t those responsible for ensuring real progress demanding that time and resources be primarily allocated to fulfilling the organization’s core mission?

In other words, why is there a lack of outrage regarding the widespread unaccountability and misalignment, and the failure to deliver results?

One potential explanation is overconfidence. Many believe that the next big data-lake or ERP project will finally provide operators with all the necessary information, enabling them to proactively manage supply chains, tackle manufacturing quality issues before they affect customers, complete complex projects on time, and optimize hospital schedules for quicker patient discharges.

For this optimistic scenario to hold, individuals across various organizations—both public and private—would need to collectively deem their core operational challenges trivial and the likelihood of resolution certain enough to justify adding more success criteria.

If such a belief occurred occasionally, it might be reasonable to think that overconfidence could lead to negligence. However, given how pervasive this situation is and how rare the exceptions are, the real reason is likely different—and more troubling.

To truly “own” an outcome and commit to accountability, individuals need to have at least some belief that success is possible, no matter how unlikely. Unfortunately, many have become disillusioned by their experiences with enterprise technology over the past decades, losing faith in its ability to deliver meaningful results. Consequently, they adjust their expectations, seek alternative metrics, and declare victory.

The Acceptance of Failure

How did we reach a point where systemic failure is normalized, where things not functioning correctly is simply how the world operates?

Let’s examine the operational realities of nearly every organization (with some exceptions for tech-focused firms). For over two decades, Palantir has been on the front lines, consistently surprised to find that regardless of a customer’s uniqueness or tech strategy, similar existential challenges persist everywhere:

1. Siloed transactional systems optimized for individual process steps rather than holistic delivery.
2. A lack of shared ontologies (each system defining its elements differently).
3. Difficulty obtaining a comprehensive operational view due to disconnected systems.
4. Core transactional systems are rarely replaced, leading to a separation between actions and analytics, even for organizations that successfully create an enterprise-wide analytical layer.

There are technical solutions available, and Palantir has been addressing these challenges incrementally, leading to our evolution as a platform company. However, these remain complex issues for organizations, and the resulting (non)-outcomes are telling.

Real-world examples abound that highlight the consequences of outdated and misaligned IT systems. For instance, British Airways faced a massive IT failure in 2017, resulting in canceled flights and delays for thousands during a busy holiday weekend. The cause? A power surge followed by a failed systems reboot—something any modern airline should be prepared for. However, their convoluted and outdated IT setup hampered their ability to quickly diagnose and address the issue, leading to substantial financial losses and reputational damage.

Such incidents are not confined to the private sector. “Over budget, over time, and under benefit” has sadly become the norm for public construction projects. Whether at the Holland Tunnel in New York, the BART system in San Francisco, the Channel Tunnel between the UK and France, or Berlin’s Brandenburg airport, the pattern remains: years of delays and billions in cost overruns. The same holds true for digital projects, with HealthCare.gov serving as a notorious example of many similar failures.

These cases illustrate a broader trend toward the normalization of failure, where the systemic shortcomings of enterprise technology are not only anticipated but accepted as standard.

The Disconnected Mechanism and the Blurred Vision: How Enterprise Tech Causes More Harm Than Good

Organizations have digitized and automated processes by removing human involvement wherever feasible to enhance efficiency.

The initial focus was on transactional systems (e.g., claims processing for insurance companies). These systems were reconstructed to separate the end-to-end delivery of enterprise outcomes into categories: those amenable to automation and those that weren’t.

Automated processes could be scaled significantly more than before, allowing organizations to build their operations around them. This pattern was replicated for every transactional system, with each designed to optimize a specific process step.

However, these efficiency improvements concealed emerging vulnerabilities.

By minimizing human involvement, systems lacked the design necessary for a nuanced, timely understanding of operations at each stage, let alone a comprehensive end-to-end view.

Essentially, systems managing core transactions were removed from the organization’s OODA loop (Observe, Orient, Decide, Act) and were built to optimize their specific processes without considering the broader operational landscape. Each was designed in isolation, with its own language and logic.

As organizations became more adept at processing transactions, they also became increasingly susceptible to system failures. The resulting fragmented systems environment severely impeded cohesive action, while the disconnection between transactional and analytical processes diminished operational visibility.

By expanding their complex structures in isolation, organizations failed to recognize that they had severed their transmission belt in multiple areas, causing their vision to steadily blur.

From an external perspective, everything may seem stable. However, the reality is that these organizations are fragile, struggling under the weight of their complexity.

When crises occur—or opportunities arise—leadership at all levels often finds themselves grappling with a broken steering wheel and limited visibility.

The extent of lost individual opportunities is hard to discern externally, although mediocre aggregate growth figures hint at the issue. Nonetheless, crises like the COVID-19 pandemic starkly revealed how much enterprise technology is lacking, forcing many to revert to paper and Excel.

The Systemic Challenge

One major reason this situation is so difficult to rectify is its systemic nature. This is how IT has been implemented across organizations for decades, and few have witnessed an alternative approach.

If no one knows better, there is little pressure to change. Over time, the reality of being unable to accomplish tasks or understand the fundamental truths about an organization's operations simply becomes normalized.

Before the COVID-19 pandemic, businesses enjoyed a relatively stable operating environment, which helped mask some dysfunction. When a company carefully curates a public persona of relentless digital transformation on the cutting edge of technology, no one wants to admit that their organization—or their team, or even themselves—might struggle with what most would consider “the basics.”

Where is Silicon Valley?

In the early 2000s, nearly every visionary in Silicon Valley—aside from Peter Thiel—was convinced of two things: 1) B2B software was a terrible idea due to its cumbersome sales process, and 2) selling software to government clients was even worse, given their troublesome nature and lack of budget.

As a result, these B2B software firms failed to materialize, and the brightest engineers found opportunities elsewhere, primarily in consumer internet companies.

Palantir went against this trend, not only in pursuing B2B software and government contracts but also in tackling critical use cases for which no other companies in the Valley were developing technology. Most dauntingly, the organizations requiring this technology were not functionally or psychologically prepared to implement it.

Nevertheless, we persevered, continually engaging at the operational frontlines. It is within this space that we found a focused intensity that has shaped everything Palantir represents. Our engineers rigorously tested everything they created against the operators’ core mission. Regardless of how innovative the technology was, if it didn’t enhance users' ability to meet their objectives, it was discarded. Naturally, it is impossible to gauge whether your software is beneficial to users while sitting in Palo Alto. Thus, our engineers often spent their days—and many nights—in windowless government buildings or even less welcoming locations. This gave rise to the concept of the “forward-deployed engineer.”

We recruited the best software engineers globally, removed them from the comforts of Palo Alto, and placed them in remote environments to support highly skilled but non-technical operators. Outsiders predicted this would fail. Alex Karp frequently remarked that only something as alluring as James Bond could persuade top engineers to engage in what seemed like the mundane task of data integration. Beneath that jest lies the essence of Palantir’s culture and success: we sought the important problems rather than the glamorous ones and connected with those who found them compelling. In doing so, we outpaced better-funded companies in the competition for top talent.

This mission remains vital. Our society relies on effective institutions, and these institutions largely depend on functional software. Unfortunately, the software provided to operators is subpar, far beneath what we take for granted in the consumer realm. Yet, those in Silicon Valley most capable of addressing this issue have largely ignored it.

The Next Transition: A Shift in Mindset Following Capital Investment

The landscape in Silicon Valley eventually shifted, and B2B SaaS not only became an attractive investment category but dominated the flow of Venture Capital.

However, this shift in capital was accompanied by a “tech-first” mindset rather than a “mission-first” one. The tech-first approach proved too tempting, and this dynamic became mutually reinforcing, preventing the resulting software from making a significant impact. Given that the “Masters of Capital” enforce this paradigm, it’s easy to see why such systemic misalignment persists.

It is clear that “more of the same” will not yield different results. If we solely focus on technology without addressing the actual problems at hand, those issues will remain unsolved.

Ironically, our high expectations of technology have led to its lackluster performance. We have turned it into a cargo cult, hoping that each new technology will rescue us from the shortcomings of its predecessor.

Both organizations and individuals need to shift away from the illusion that technology alone will resolve our issues. For the time being, humans bear the responsibility for solutions, and we require the tools and a concentrated focus to do so.

Generative AI holds the promise of unlocking significant efficiencies in the enterprise and empowering employees. Yet, without a fundamental change in approach, it will have a comparable impact to previous overhyped technologies like data science, IoT, and machine learning—next to nothing.

We must address these challenges and not waste the potential of yet another technology. The stakes are too high.

Zero growth is an urgent issue, but the growing malaise in our societies, where nothing seems to function, is even more concerning. Many believe that getting basic systems to operate correctly is simple, or at least feasible. If these systems deteriorate progressively, the obvious inference is that leadership is either incompetent, corrupt, or both—leading to further erosion of the unity of purpose and confidence necessary to advance society.

The reality is far more mundane. A misplaced trust in technology has allowed us to eliminate accountability for outcomes at every step. By expecting too much from technology, we have had to settle for it delivering very little.

The road ahead necessitates a collective and radical realignment with purpose. It is time to dismantle the cargo cult mentality and embrace accountability for tangible results.

Author

Meline von Brentano, Head of Digital Transformation Strategy, Palantir