Boards that drive the holistic and transformative adoption of AI can help their organizations own the consumer relationships of the future.
AI is disrupting a wide range of industries and new entrants to markets often realize competitive benefits in comparison to incumbents by their use of AI. At the same time, uncertainty in understanding and adopting AI at scale have placed many traditional consumer products and retail (CPR) organizations at risk of becoming irrelevant, as the way consumers engage with brands fundamentally shifts to embrace new technologies, like AI.
A look into the future consumer
Consumer engagement is undergoing a sea of change. Consumers who value time more than money are looking at AI to identify brands that reflect their ideals and way of life. Social trends – such as consumers wanting to become “better versions” of themselves or contributing to the betterment of society – present significant opportunities for AI to play a role in meeting these needs. As attitudes toward consumption change, AI can offer brands meaningful ways to promote sustainability or social good and connect with consumers on a deeper level. Conversely, consumers could use AI to steer clear of brands that are not reflective of their values. Boards can influence the role of AI technology in addressing this shift in consumer behaviour.
AI: building consumer relationships and business opportunities
AI is a powerful tool that can create new value propositions, starting with how it impacts the consumer journey. Product offerings curated by AI are in great demand by customers. The benefit for consumers include products recommended and designed according to their individual needs and preferences. Brands able to deliver on this expectation will elevate customer retention and loyalty.
Forward thinking boards realize that waiting until the technology is more mature for the organization to adopt AI in a holistic and transformative way will be outpaced by the competition. At the same time, boards that support their organizations – regardless of their digital maturity to date – to view AI with this lens of opportunity will ultimately be best able to differentiate their organizations in the eyes of their customers.
More transparency and trust in AI
AI can present itself as a strange, foreign concept. Can we trust AI to do what it is designed to do? How should organizations address such concerns? As trust is a critical element for every consumer experience, organizations need to build trust in AI right from the start.
Education and the understanding of AI’s current limitations will go a long way to imparting trust in the technology. More real-time monitoring of AI applications to check if they are performing within safe boundaries is necessary too. The risk profile (including ethics, social responsibility, accountability and reliability) of the AI application and its use case will help determine ways to tap its potential. To address the risks associated with discrimination and bias, technology teams will have to work around insufficient data and faulty algorithms. To lessen any perceived lack of humanity, design teams must acknowledge human psychology and behaviour.
Boards must acknowledge that AI is – in many ways – like human intelligence, whereby mistakes are often part of the learning process. Incorporating this expectation and consequent learnings into strategy and processes that will ultimately improve the AI journey will, in turn, lead to heightened trust.
What’s next for boards?
The potential of AI is enormous, with so much more to come. Only boards that are willing to demonstrate curiosity and interest in the topic can meaningfully engage management on its benefit to the organization in the longer term. Boards need to understand what AI can bring to the table, and help their organizations transform those capabilities to innovate and grow.
Questions for the board to consider:
- Does the board explore and understand how the organization is using AI to create competitive advantage and drive new value?
- Which processes in your organization, when addressed by AI, could have the greatest impact on customer experience?
- What is the board doing to challenge biases that may appear in the data the organization has collected?
- Has the board challenged management to consider how it might publicly respond to ethical dilemmas and how it can achieve transparency, accountability and ethics with AI use?