For two weeks after ChatGPT launched, Google’s leadership treated it as a curiosity rather than a crisis. They’d invented the transformer architecture. They had their own chatbots. By every analytical framework, ChatGPT looked like a novelty.
They were evaluating the disruption by the old paradigm’s metrics.
The threat wasn’t that ChatGPT would out-Google Google. The threat was that ChatGPT would make “Googling” itself feel obsolete. Not a better search engine—a different paradigm entirely.
This is the classic incumbent blind spot: the technology seems familiar, the accuracy isn’t great, the business model is unclear. Everything looks manageable—until it isn’t.
Within three weeks of dismissing ChatGPT, Pichai declared Code Red. What changed wasn’t ChatGPT’s capabilities. It was the recognition of what ChatGPTrepresented.
Code Red works because it’s triggered not by damage already sustained, but by damage anticipated. The company declaring Code Red is typically still the market leader. Revenue is still growing. By conventional metrics, things look fine. But leadership has recognized what the metrics don’t yet show.
For the complete analysis of recognition failure patterns and how to identify paradigm shifts before they hit your metrics, read The Code Red Playbook on The Business Engineer.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
