Harnessing AI and Digital Innovation for Post-Pandemic Growth: 5 Key Insights for Today's CEO
The advantages of digital innovation have become even more indispensable to CEOs, especially in a post-pandemic world. What has not changed is the primary responsibilities of a CEO, which are to implement your company’s business model and facilitate its growth. These responsibilities coexist with numerous factors - vision, goals, employees, suppliers, competitors, government policies, technology, environmental conditions, and customers.
While you may have complete control over certain aspects of your business, others remain outside your grasp. Shifts in these uncontrollable elements can profoundly influence your company's trajectory. The repercussions of Covid-19, combined with the meteoric rise of emerging technologies like generative AI, pose challenges that could potentially make your current business model uncompetitive, or divert your business off its intended path. It's in these moments that embracing the essence of digital innovation becomes even more important, equipping CEOs with the tools to navigate the ramifications of such unpredictable forces.
The Uncontrollable Force of Covid-19
McKinsey & Company's 2022 research on the effects of the pandemic highlighted enduring impacts across various sectors, including education, airlines, and the labour market. The study estimated that unfinished learning related to Covid-19 could translate to an annual global economic loss of $1.6 trillion by 2040. The Office for National Statistics (ONS) further emphasised the pandemic's widespread influence, particularly on high-contact services such as transport, recreational services, and entertainment as shown in the chart below.
The ONS observed a notable transition in consumer behaviour, with a marked preference for online shopping over traditional in-store purchases. CEOs and business leaders who quickly adapted to this evolving demand by bolstering their digital operations witnessed growth. This contrast in outcomes suggests that resilience in the face of pandemic-induced challenges can be closely linked to digital innovation.
Mastering the (almost) uncontrollable rise of Generative AI
Just as the world was beginning to recover from the profound impacts of the pandemic, Generative AI emerges, presenting a formidable challenge to those not harnessing it as a strategic innovation. This resonates with the insights shared during our Learning Circles by Lucy Cooper, Head of Customer Innovation and Commercialisation at Microsoft and Global Innovation Strategy Lead.
Lucy noted that the rapid rise of the “General Purpose” nature of AI as a game-changing technology has meant that just four people in a room with access to the right technology can create a business that rivals a corporation - for a fraction of the cost.
McKinsey and Company, in their extensive research, pinpointed 63 generative AI business applications. These have the potential to generate an astounding economic value ranging from $2.6 trillion to $4.4 trillion as seen the chart below:
The research underscores a compelling correlation- as employees increasingly integrate emerging technologies into their workflows, they amplify the economic value they contribute. In essence, CEOs who champion digital innovation are better equipped to navigate both the repercussions of the pandemic and the challenges posed by emerging technologies such as Generative AI.
What exactly is Digital Innovation?
Digital innovation involves introducing or applying new and existing technologies innovatively, to enhance specific business operations and customer experiences. It encompasses a broad range of activities, such as the development and deployment of new digital products, in many cases leveraging data and using data analytics for informed decision-making. It spans across adopting generative AI, cloud computing and other emerging technologies into workflows, to enhance operational efficiencies, flexibility, or address specific business challenges.
Chipotle Mexican Grill was among the companies that leveraged digital innovation during the peak of the Covid-19 pandemic. Chipotle adopted the Internet of Things (IoT), machine learning, and automation, boosting its growth by up to 70% in the first quarter of 2020. The company launched platforms like the Virtual Farmer’s Market, which enhanced online customer engagement, and a new online reward programme that attracted over 11.5 million users as most in-store customers transitioned online.
Even though the pandemic effects cannot be entirely controlled, its effects can be managed. That's precisely what Chipotle achieved through digital innovation. The post-pandemic era is a challenging one, yet it unveils more digital innovation opportunities that business leaders and CEOs need to stay updated with.
What are the 5 Digital Innovation Strategies every CEO should Consider?
1. Investing in Data Analytics and AI
We are in a new phase where data is not just data but probably the most highly valued asset and currency for optimal business operations. Data-driven insights can inform strategic decisions, optimise operations, and create personalised customer experiences. Artificial Intelligence (AI) can automate processes, enhance user experiences, and provide predictive insights that offers growth and scalable possibilities.
CEOs and other business leaders should consider implementing data analytics tools and exploring AI solutions that can provide a competitive advantage. According to PwC’s Global Artificial Intelligence study, AI is set to contribute to 45% of total global gains by 2030 stemming from product enhancements and demand stimulation. AI is driving a transformative force that will bolster product proliferation, personalisation, and the delivery of efficient and affordable services.
2. Embracing Cloud Computing
Cloud platforms offer scalability, flexibility, and cost-effectiveness. As businesses transition to digital, cloud computing is increasingly becoming essential. It allows businesses to swiftly adapt to changing demands without significant upfront investments in infrastructure. CEOs and business leaders should evaluate and adopt cloud solutions that align with their companies' operational needs and growth objectives.
3. Engaging in Digital Collaboration and Partnerships
In this digital era, no organisation operates in isolation. The complexities of the digital landscape make it clear that collaboration and partnerships are essential for sustained growth and innovation. Collaborating with tech start-ups, industry peers, or academic institutions can accelerate digital innovation by introducing fresh perspectives and specialised expertise.
For example, Minima, the blockchain protocol, partnered with EdenBase to design and run the Minima Innovation Challenge, to find 10 innovative companies that build on the Minima platform. The collaboration brought innovative ideas that were not previously obvious and enhanced the growth potential of the Minima Protocol.
Digital innovation has become a pivotal means for businesses to respond to a world dominated by powerful new technologies. Every forward-thinking CEO should consider accessing innovation through partnerships that align with their company's mission, goals, and business strategies.
4. Prioritising Data and Cybersecurity
If data is the new oil, then protecting it and the systems that support it is paramount. While cybersecurity is often viewed as a defensive strategy, it can also drive innovation. A secure platform enables businesses to experiment with new digital offerings without compromising sensitive data. Integrating cybersecurity into the core of digital strategies ensures that innovations are both cutting-edge and secure. As businesses become more digital, they also become more vulnerable to cyber threats.
CEOs should regularly assess and update cybersecurity measures, consider cybersecurity insurance, and invest in employee training.
5. Fostering a Culture of Continuous Learning
The pace of technological advancement is staggering. From AI-driven solutions to blockchain technologies, new tools and platforms are continually emerging. A culture that values and regards continuous learning ensures employees remain updated with the latest trends, tools, and best practices, allowing the organisation to stay at the forefront of innovation.
CEOs need to stay competitive, and they need their teams to keep up to date with the latest technologies and methodologies. EdenBase has created a series of workshops and events that help everyone leverage emerging technology to enable business growth. Get ahead and join us at our next Workshop