Welcome to the Innovative Leadership Newsletter, brought to you by the Innovative Leadership Institute, where we bring you thought leaders and innovative ideas on leadership topics each week.
This week’s article is written by Maureen Metcalf, CEO of the Innovative Leadership Institute. It is a companion piece to her interview with Suchi Srinivasan, Boston Consulting Group Managing Director and Partner on Innovating Leadership: Co-Creating Our Future titled Humans in the Loop: AI’s New Business Models, which premiered on November 28, 2023.
Short clip from the interview:
Link to the entire interview:
In a rapidly evolving digital landscape, keeping up with technological advancements is no longer a luxury but a necessity for contemporary business leaders. These innovations, especially in the field of artificial intelligence, are drastically redefining the way businesses operate. They steer businesses towards an efficient, sustainable, and profitable future. However, while AI has the potential to reshape business models, it also comes with its unique set of challenges.
1. Addressing Ethical Challenges in AI Adoption
The evolution of AI has brought with it challenges that organizations must face, chief among them being ethical considerations. The protection of consumer data, the need for unbiased algorithms, and the imperative for responsible use of this technology are issues that cannot be downplayed or overlooked. The solution lies in adhering strictly to ethical guidelines, implementing stringent security measures, and fostering transparency within organizations. Introducing rigorous stability checks and setting robust standards is also key as we navigate the landscape of an ever-evolving AI vendor ecosystem. By doing so, we are laying the foundation for an AI future that is not only innovative but also accountable.
AI, as a tool, is powerful enough to disrupt established systems and processes, and its infusion into business models necessitates the formulation of a new code of ethics. At this intersection of innovation and responsibility, enterprises have the opportunity to affect positive change at an unprecedented scale. By addressing the ethical challenges that come with AI adoption, companies can ensure that they are not only delivering greater value to customers but also safeguarding their interests. The real potential of AI lies not just in its ability to streamline operations and offer new services but in revolutionizing the very fabric of business conduct by fostering a culture of accountability and trustworthiness.
2. Harnessing AI for Business Model Innovation
The implementation of AI has drastically reshaped the business landscape, offering unprecedented opportunities for innovation and entirely new possibilities for value creation. AI is not merely a tool for automation or increasing efficiency; its most significant potential lies in its capacity to offer unique insights from large unstructured data sets. These insights can empower companies to develop new products or services, fundamentally disrupting traditional business models in the process. Instead of selling raw data, companies are now able to deliver ready-to-consume insights, heralding a shift in the value chain and opening doors to entirely new commercial and billing models. Enterprises have been gathering data for years, hoping to obtain a return on investment. AI offers a significantly faster path to ROI by leveraging this data. Instead of just selling data, businesses can now deliver ready-to-consume insights and reports tailored to the specific needs of their clients.
This opportunity represents a paradigm shift in how we approach value creation in the business world. It places the emphasis on a more client-centric model, where businesses move from selling raw materials or data to providing deep, actionable insights that clients can readily consume and implement. In this sense, AI facilitates a more nuanced understanding of consumer needs, allowing businesses to create more tailored, high-value offers. Moreover, it allows businesses to optimize their operations, making them more efficient and environmentally friendly. The potential is enormous, and we’re only just beginning to scratch the surface. By harnessing the full potential of AI, businesses can not just improve their offerings but disrupt their own business models, paving the way for future growth and success.
3. Mitigating Biases in AI Models for Accuracy
While AI brings automation and efficiency, managing bias in AI models is extremely important. Our reliance on these models for crucial insights and decision-making creates an imperative need to ensure they’re not swayed or affected by inherent historical or human biases. They should represent a fair and balanced interpretation of the world. Suchi Srinivasan suggests that AI models with a capacity ranging between 10 billion to 50 billion parameters are more adaptable to nuances and contexts of these fields. They offer a more focused mitigation of bias and can incorporate explainability better, producing trustworthy insights. As we rely more and more upon these models in guiding critical business decisions and strategies, it is paramount to continuously focus on refining them, actively seek out ways to mitigate biases and strive for accuracy. Remember, AI isn’t a substitute for human intelligence but a tool to augment it. So, the responsibility of ensuring it accurately represents our world lies with us as well.
ABOUT THE GUEST:
Suchi (Suchita) Srinivasan has worked at Boston Consulting Group since October of 2010. She is a core member of BCG’s Health Care practice and has significant experience in biopharma—specifically focused on market access, pricing, commercial strategy, and innovative growth. She is the lead for global value, access, and pricing in biopharmaceuticals.
Suchi helps clients with new product planning by supporting investment decisions and ensuring careful consideration of the relevant market and development drivers.
She supports due diligence efforts by quickly understanding new markets, unmet needs, and how to win. In her recent casework at BCG, Suchi also developed end-to-end disease area strategies to identify key areas for investment, led the strategy development for an imminent competitive threat, supported the US salesforce effectiveness effort to identify HCP value drivers, developed the brand positioning strategy for a launch drug entering a competitive class, and developed creative pricing, reimbursement, and access strategies for a drug entering a highly competitive class of drugs by building the narrative around value derived.
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