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Leadership

When considering the Digital Core of your own business, it’s important to look at the increasing number of skills, capabilities and disciplines that are required to be closely interconnected and critically, the numbers of people required to have this understanding.  Technology, Data, Cyber and now AI may look to the uninitiated to be similar skills, are in fact in many ways very different in terms of mindsets, likely career paths, interests, and personalities.  The implications of getting it “wrong” now in the Digital Core are significant, potentially fatal.  Getting it “right” will require consistent levels of energy and expertise across a 24x7x365 horizon, to keep up with the required innovation and development of new capabilities and the ever-increasing efforts to secure and maintain.  The Leadership understanding of these highly technical environments and skills is at a premium as are the increasing depths of skill required in each component of the Digital Core.  The challenge is only getting bigger, and the pace of change is only getting faster.  The C-Suite and the wider leadership teams must get closer to and understand a little more about the Digital Core of the business.  The introduction of generative AI into the world has made the Digital Core an enterprise-wide asset (as it has actually always been) to be understood and leveraged by all.  The ‘mysteries’ of technology can no longer be just the remit of the Chief Information, Chief Technology or Chief Digital Officer.

Ethics

This is probably the single biggest emerging issue that has arisen with the explosion of Generative AI as highlighted by the trailblazing ChatGPT application from OpenAI. The ethical considerations are multi-dimensional and cover everything from the use of AI in principle (and the subsequent removal of jobs), through to bias (in the training materials), privacy, breach of copyright and trademarks and through to its wider potential implications for humanity as AI gets more sophisticated and “intelligent”.  Ethics and AI will be a topic that will engage many governments, businesses, and civic minded organisations over the next decade.  Every business will need to consider its own position, update their relevant policies and be ready with a communicable position on this since it is likely to appear in audit, procurement, regulatory and public interest forums.

Burnout

Note to Leadership; given the mounting expectations and pressures on the teams of people developing and supporting the Digital Core, organisations should ensure appropriate oversight into the workloads and stresses being introduced and keep an eye out for burnout.

In Summary

We are in and likely to remain in a VUCA world for the indefinite future. Our individual, professional and collective organisational response to this position, if, when and how we become hyperagile; how we understand the elements of the Digital Core, through which we live, work and play, will determine how successful we are in the safe and progressive navigation of this next phase of disruptive innovation.

If you would like to discuss more about the content of this blog and the issues being introduced, how to become hyperagile, or how to evolve a Digital Core and its implications for your executive team and business please do get in in touch.  If. you simply want to contribute your thoughts and experiences to a wider piece of strategic transformational research and development, please get in touch here…

[1] Hyperagility is defined for the purposes of this update, as the ability for how an individual and collectively as an organisation (and executive team) (ie. A collection of individuals) can operate successfully in a VUCA world.  It is the combination of a strategic view, a growth mindset, continuous curiosity, learning behaviours, collaborative nature, digital understanding, and adaptive, integrative execution.

In Part 1 of the Digital Core, we discussed the first four factors affecting the Digital Core, namely considerations for legal and regulation, for customers and expectation management and the availability of skills.  In this Part 2, we discuss the interconnectedness and criticality to business over the next decade of the Digital Core and the next four factors affecting it covering Bad Actors, the always-on nature of digital, and implications for supply chain and legacy technologies and process.

Connected Everything

Every aspect of our lives is either now connected or have a path to being connected in a digital way.  It is increasingly difficult to be “off-grid” to live as a citizen and perhaps implausible if not impossible to be “off-grid” as a business in today’s digital world.  The interconnected nature of this increasingly heterogeneously connected ecosystem of course enables huge potential for convenience and efficiency.  It also scales and amplifies some of the challenges and risks, of being so extensively and seamlessly connected as we discuss in the following update.

Bad Actors

Unfortunately, there is a significant and growing threat to our digital, online lives and ways of working posed from a range of ‘bad actors’ seeking to do harm, mis-inform, extort value, and deny access to our digital personas, businesses, and societies alike.  The threats range from “lone wolf” individuals, through organised crime, to nation states.  As such, beyond just awareness to the threats, we must ensure that we are deploying as much effort and resources into protecting, detecting, responding and in the event of an issue, recovering from the impact of these bad actors.  These core capabilities and mindsets are even more important in an AI era, where the new tools and technologies can equally be deployed by the bad actors for harm, as much by well-intentioned organisations and individuals deploying for good.

The always-on, 24×7 world.

Much of society is already reliant on a globally available digital technology infrastructure whether it be mobile phone networks, internet access, cloud compute and the like; this is not a new issue. The more reliant people, businesses, societies, and governments become on digital services, on-demand, and the more intertwined they become to our everyday lives, the more critical the 24×7 (x365) aspects of the environment needs to be.  There are many people in many organisations whose lives and work are intrinsically tied up into the deployment, securing, maintaining, and supporting of infrastructures that underpin the “always on” culture, many of us have come to expect.  The rapid rise of data needs and the even more rapid rise of AI has only added to the weight of expectations, pressures, and workloads of the same reasonably small number of skilled professionals and leaders who understand, develop and mitigate for all of the opportunities and risks enabled through the now critical, increasingly complex Digital Core.

Supply Chain

Few businesses are islands and most rely on a connected set of partners and suppliers that make up the fulfilment of product or service.  As such, increasingly AI has added extra importance to this, not only does each business need to understand, protect and grow its own Digital Core, it needs to understand to a level, the quality of (and perhaps now the contribution of AI to) their partner and supplier’s Digital Cores.  A failure or misfire of any element upon which a business is reliant upon, will quickly become an operational, commercial, and potentially reputational issue.  Mapping out these supply chains, their security and resilience and now their reliance upon AI will become a task of upmost important for every business.

Legacy

This is not a new consideration.  Many businesses, even today, maintain (or not) legacy systems and processes that can slow down or impede progression to high performance of the Digital Core.  There are many reasons why legacy persists in an organisation; common reasons will be availability of budget, prioritisation (never quite reaching the top) and resistance to change (from people comfortable with the existing way of doing things).  Over time, this legacy can grow into a complex, expensive and high-risk set of issues for a business to manage and remove opportunities to participate in the digital world.  Legacy will divert management and professional time, budget, and resources away from innovation, exploration and serving customers and will be an increasing drag on business performance.

If you would like to discuss more about the content of this blog and the issues being introduced, how to become hyperagile, or how to evolve a Digital Core and its implications for your executive team and business please do get in in touch.  If. you simply want to contribute your thoughts and experiences to a wider piece of strategic transformational research and development, please get in touch here……

We’ve talked previously about the Digital Core, its interconnectedness and criticality to business over the next decade.  This blog posts talks more about the first four factors at play around the Digital Core in the era of generative AI.

Legal & Regulation

AI and specifically Generative AI is creating ramifications in the legal and regulatory space from copyright challenges (from the content used within AI training regimes) to accountabilities for answers to questions, citation of “facts” or even recommendations provided, from the results generated from algorithms. These developments are challenging the current bounds of legal and regulatory scope and obligations.  We predict we will see a small number of high-profile litigations to test and potentially create case law around one or a number of these emerging issues.  Law Firms and corporate general counsels are likely to be kept busy with the rapidly emerging legal landscape being created by AI; from copyright infringements to implications of “advice” or “recommendations” being taken from AI outputs; from misinformation, discrimination, and privacy onto planned and potential regulatory changes.  Some of the rule books are being fundamentally challenged if not ripped up.  Legal counsels are about to be getting even busier.

Expectations (Stakeholder)

Even when we get through the hype phase of (generative) AI, there will still be significant expectations from customers, shareholders and business leaders expecting to see some form of revolution or killer-app from the introduction of AI to their business.  For some people, AI has taken on some magical qualities and expectations rapidly evolving accordingly.  Setting and managing these expectations early within the business will be key to prevent disappointment, burnout of the tech teams and/or expensive and potentially reputationally damaging mistakes being made.

Customers

An important community of stakeholders for the expectation management process will be customers.  They will expect AI to be increasingly present in products and services and will want to know where and how it is being used.  Regulators will be increasingly interested in AI’s deployment and influence of products and services affecting consumers and enterprises alike. If a business is managing customer data, if, how and when this data might be being used within an algorithm and creating value (or unknown risk).  As such, customers will need to be closely coached along on the evolutionary journey of any businesses Digital Core utilising AI.

Skills

The pool of people with deep functional AI skills is relatively small today; many professionals will be rushing to attend a course and put it on their CV but genuine deep understanding of AI, machine learning, neural networks and associated technologies require strong maths, good understanding of coding and data handling, all of which is in relatively short supply.  Likewise, leaders, especially those not closely associated with technology in their career will increasingly be exposed for their level of understanding in the Digital Core and how to manage people with the skills within this core.  Even in the pre-AI epoque, these skills especially through and post pandemic, have been hard to find and trading at a premium; the addition of AI to this space only amplifies the challenge. If you would like to discuss more about the content of this blog and the issues being introduced, how to become hyperagile, or how to evolve a Digital Core an its implications for your executive team and business please do get in in touch.  If. you simply want to contribute your thoughts and experiences to a wider piece of strategic transformational research and development, please get in touch here……

Most modern business will have a Digital Core even if it is not described as such.  The Digital Core is the ecosystem of people, processes, technology, and data that enable the business to operate in a connected, digital world.  This digital ecosystem must seamlessly and securely collaborate, respond to change and be continually adaptive.  The Digital Core would typically have to address three primary dimensions of technology, data and cyber including all the human aspects around these disciplines.  The explosion of (generative) AI has forced a fourth pillar into the mix.  AI cannot be ignored.  The hype phase will fall away and what will be left is significant opportunity and risk that will need to be at least assessed, solutions piloted and either implemented or dismissed but to not deeply consider the implications of AI will be a potentially fatal mistake.

Some of the major influences around the Digital Core that require proper consideration are shown in Figure 1 and outlined in the rest of this blogpost.

The recent overt and rapid (almost forced) introduction of AI into the Digital Core for businesses will create a significant suite of challenges across every business to understand, interpret and incorporate or mitigate it within its operations, products and policies. 

The addition of AI at the centre of the Digital Core is the rapidly changing an increasingly complex interplay between technology (the trends to Cloud, SaaS, App, API ecosystems etc) data (and analytics), cyber (security) and artificial intelligence (AI).  2023 marked the next technological transition, when it will be necessary to understand these four core elements of digital business, their interplay with each other and the opportunities and risks they now collectively represent.  2024 therefore, will be an important year for leaders and organisations alike, to understand, learn and potentially reconfigure technically to develop and support them and strategically evolve to lead the deployment and evolution of them. Leaders who are not spending time to get appropriately close to these four pillars will miss opportunities and potentially miss or underplay risks that threaten to undermine stability and growth.  We’ll discuss the key influences, risks, and opportunities around the changing Digital Core over a series of future blog posts.  Connect and follow the posts to make sure you don’t miss an update.

If you would like to discuss more about the content of this blog and the issues being introduced, how to become hyperagile, or how to evolve a Digital Core an its implications for your executive team and business please do get in in touch.  If. you simply want to contribute your thoughts and experiences to a wider piece of strategic transformational research and development, please get in touch here……