Wilson P. Tan l December 1, 2023 l Business World
In a recent event, EY gathered insights from over 100 board directors and business leaders regarding the challenges of rising inflation, geopolitical crises, rapid digital transformation, and the impact of generative artificial intelligence (AI), the metaverse, and other disruptive platforms. The event emphasized the importance of directors gaining hands-on experience with rapidly evolving technologies, meeting the expectations of investors and stakeholders, embracing innovation dur-ing times of uncertainty, and focusing on purpose and principles when innovating.
To effectively oversee emerging technology, boards should note four key points of action: fostering curiosity, employing a hands-on approach, carefully embracing innovation, and building inclusive ecosystems.
FOSTER CURIOSITY
Board leaders now face the challenge of navigating emerging technology platforms that were virtually nonexistent before the pandemic, such as AI, the metaverse, and advanced language models. These technologies hold a unique po-tential for each company’s mission and purpose. It is no longer enough for boards to simply cast their votes in favor of or against these technologies; they must engage in a process known as “visioning.” This involves discussing and for-mulating actionable strategies to immediately embrace these technologies, fueled by curiosity to determine potential opportunities, thereby realigning business and operating models towards growth and productivity.
EMPLOY A HANDS-ON APPROACH
The new generation, particularly Gen Z, are fully immersed in the digital realm and are both current and future consumers and employees. These young individuals have a strong desire to own their data, have influence over AI, and cu-rate their own metaverse experiences. For instance, just like previous generations of teenagers who would gather at shopping malls for socializing, it is predicted that soon teens will engage in similar activities within the metaverse.
The concept of professionals interacting as avatars in virtual realities is also gaining traction, such as for corporate training purposes. Simply acknowledging the existence of these technologies is no longer sufficient. Boards must adopt the same hands-on mentality as Gen Z, stepping out of their comfort zones to personally explore and experiment with these technologies, all while maintaining a mindset of continuous learning. Boards that eagerly embrace AI on a wide scale and envision the potential to transform their businesses, even considering its applications within their own boardrooms, will undoubtedly reap the benefits. On the other hand, those that fail to do so will fall behind, and this future is not far away.
CAREFULLY EMBRACE INNOVATION
The current business landscape drastically shifted due to the onset of the COVID-19 pandemic, leading to a cascade of transformative events, including supply chain crises, the conflict in Ukraine, and inflation. These phenomena have had a profound impact on how companies conduct business on a global scale as labor and energy costs also continue to rise steadily. While cost-cutting measures and job reductions can provide temporary relief, they can only take companies so far. It is imperative for boards to incorporate AI, intelligent automation, and alternative energy sources into their scenario planning and capital reallocation strategies.
While innovation is undoubtedly vital, boards must strive to strike a balance between enthusiasm and caution. Flashy new technologies may captivate attention, but they alone do not form a robust business plan, especially in times of economic uncertainty. Disruptive platforms must be supported by well-founded business cases. By asking the right questions, boards can gain a deeper understanding of their customers and talents as human beings rather than solely as consumers or employees. As early as now, companies should also already start evaluating their readiness for AI, and how leveraging on its powerful algorithms can help enhance their products and services, and im-prove lives.
BUILD INCLUSIVE ECOSYSTEMS
The shortage of tech skills necessary to drive innovation has become apparent. However, with less restrictive immigration policies and the rise of remote work, there is an opportunity to tap into a broader pool of high-tech profes-sionals. Recognizing the value of human diversity as a fundamental principle ultimately leads to better business outcomes, and while empathy and soft skills are significant, cultivating a culture of innovation necessitates construc-tive conflict to push forward new ideas.
Furthermore, responsible innovation entails vigilance towards the unintended consequences that may arise from the rapid advancement of digital technology. The era of “move fast and break things” has come to an end. Alt-hough innovation often outpaces regulation, boards must acknowledge and oversee the associated risks posed by AI. Just because something is technologically feasible does not mean it is ethically right. AI will be an integral part of our future, and leaders must strike a balance between harnessing its potential benefits and safeguarding against cyber threats, biases, and other adverse impacts on workers and consumers.
INNOVATE WITH PURPOSE AND CONSIDER THE RISKS
It is important for boards to gain hands-on experience with new technologies, adopting a curious and continuous learning mindset but while simultaneously practicing caution to ensure their decisions are backed by informed busi-ness plans. Leading boards welcome innovation but do so with purpose and with the careful understanding of unintended consequences.
*** This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co. and FINEX.