Sarah Chen and Marcus Rodriguez weren’t trying to disrupt the insurance industry. As IT and operations directors at Pacific Trust Insurance, they were tasked with using AI to improve claims processing speed—a typical “15 percent better” initiative. But as they analyzed the patterns emerging from their AI models, they noticed something more fundamental: Their entire business was built on reacting to events—after they occurred.
“The patterns we’re seeing,” Sarah said to Marcus during a review session, “they’re not just about processing claims faster. They’re showing us possibilities for prediction we never thought possible.” Marcus nodded, “Every industry assumes certain risks are unavoidable. But what if that assumption itself is outdated?”
Their AI models, powered by autonomous agents working in parallel across vast datasets, were uncovering patterns no human could detect. These agents, simultaneously analyzing and learning from weather patterns, IoT sensors, customer behaviors and external events in real-time, weren’t just finding correlations—they were revealing entirely new possibilities for personalized risk assessment and prevention. Rather than just making existing processes more efficient, Sarah and Marcus began seeing how this intelligence could fundamentally reshape each customer’s unique relationship with their insurer.
What started as a process improvement project evolved into something much bigger: a reimagining of how their industry could operate in an AI-enabled world. When they presented their findings to Pacific Trust’s leadership, they weren’t just showing a better way to process claims—they were challenging fundamental assumptions about how their industry could work.
When Pattern Recognition Meets Culture
Crucially, Pacific Trust had cultivated a culture that gave employees the latitude to explore beyond their immediate tasks. This wasn’t about rule-breaking for its own sake, but about creating an environment where questioning the status quo was encouraged. Sarah and Marcus weren’t trying to be industry revolutionaries; they were simply empowered to follow the data where it led, even if that meant challenging long-held assumptions.
This story illustrates a powerful truth: The most dangerous companies in your industry aren’t necessarily those deliberately setting out to break rules. Often, they’re the ones creating cultures where employees at all levels feel empowered to question assumptions and explore new possibilities.
Beyond the AI Playbook
While most executives acknowledge AI’s disruptive potential, their response is often to follow the well-worn playbook: implement the same use cases their competitors are pursuing, follow the same roadmaps promoted by consulting firms, chase the same incremental improvements. Protecting market position and improving operational efficiency through AI are necessary elements of a complete strategy, but limits your aspirations to a bronze medal, at best. If that’s all you’re doing—if your AI initiatives stop at defense and optimization—you’re missing the bigger opportunity. The most dangerous assumption in business today is that tomorrow’s rules will resemble today’s.
Consider what Sarah and Marcus uncovered: It wasn’t just an opportunity for better insurance products—it was evidence that fundamental industry assumptions might be obsolete. Every industry has these assumptions. In banking, the belief that trust requires physical presence. In manufacturing, that quality control happens after production. In retail, that customer data belongs to the seller. These aren’t just rules—they’re cognitive handcuffs.
Breaking Rules vs. Playing Better
The truly breakthrough companies aren’t trying to play the game better. They’re questioning whether it’s even the right game. Look at how Stripe fundamentally challenged banking’s assumptions about merchant accounts by asking why establishing a merchant account needed to be complex at all. Or how Netflix questioned why entertainment required physical distribution networks. These companies succeeded because they had the courage to challenge basic assumptions about how their industries worked. Today’s AI capabilities make identifying and acting on such rule-breaking opportunities even more profound.
Your competitors aren’t just coming for your market share—they’re coming for your assumptions. Every industry rule you consider immutable is a target. Every “that’s how it works” is an opportunity for someone to prove you wrong. The question isn’t whether your industry’s fundamental assumptions will be challenged, but who will do the challenging.
The Leadership Imperative
This creates a new imperative for leaders. You must become skilled at assumption archaeology—systematically uncovering and questioning your industry’s hidden rules. What processes exist simply because “that’s how we’ve always done it”? What customer behaviors do you consider unchangeable? These aren’t just academic questions—they’re vulnerability assessments.
But identifying assumptions isn’t enough. You need to foster a culture where everyone, from frontline employees to senior executives, feels empowered to challenge assumptions. Where “why do we do it this way?” becomes a daily question, not a quarterly exercise. Where pushing back on accepted industry wisdom isn’t just permitted—it’s expected.
Sarah and Marcus weren’t executives—they were mid-level directors who saw operational patterns that challenged conventional wisdom. This is crucial. Rule-breaking insights often come from people close enough to see the patterns but fresh enough to question them. Your culture either encourages such rule-breaking or suppresses it. There’s no middle ground. When someone says, “What if we didn’t have to…” how does your organization respond? That response predicts your future.
The Deeper Challenge
But there’s a deeper challenge here. Most organizations are built to preserve rules, not break them. Their metrics reward efficiency over exploration. Their processes prioritize predictability over possibility. Their incentive structures encourage incremental improvement over fundamental questioning.
This isn’t just about having innovation labs or transformation initiatives. Those often become isolated pockets of experimentation that rarely challenge core business assumptions. Real rule-breaking potential lies in the daily interactions between your people and your customers, in the patterns that emerge from your data, in the frustrations and workarounds that your teams develop.
Consider how Pacific Trust’s transformation began. Sarah and Marcus weren’t in an innovation lab. They weren’t part of a digital transformation task force. They were operational leaders who were given the freedom to question what they saw. More importantly, they were in an organization that had developed the muscle to recognize and nurture rule-breaking insights, regardless of their source.
This is the real work of leadership in the AI era: not just implementing AI solutions, but creating environments where AI’s pattern-recognition capabilities combine with human courage to question fundamental assumptions. Where the question isn’t “How can we do this better?” but “Why are we doing this at all?”
The Path Forward
The path forward is clear, but challenging. Start by gathering your team to identify patterns that don’t fit your current business models. Look for correlations in your data that challenge industry assumptions. Pay special attention to the outliers—they often reveal where your assumptions are wrong. Choose one “unchangeable” industry rule and ask why it exists at all.
Your AI initiatives shouldn’t just optimize—they should reveal new possibilities. Your innovation process shouldn’t start with current constraints. Your culture should celebrate exploration more than efficiency. And most importantly, your leadership should focus on creating an environment where rule-breaking isn’t just allowed, but expected.
But the work starts now, with a simple question: Are you ready to break the rules that have defined your industry? Because in an AI-enabled world, the advantage goes to the rule-breakers. The companies winning the future aren’t waiting to see which rules will change—they’re actively breaking them.
So, how do you put this thinking into action? Develop a balanced portfolio of initiatives to maintain competitive parity, strengthen your value proposition, AND potentially disrupt conventional thinking within your industry. What does this look like? You’ll have to read our next article!
