The AI Enterprise Is Inevitable With Today's New Consumer Expectations

Having led several enterprise-wide business transformation programs for consumer products and retail companies, including digital- and Artificial Intelligence (AI)-focused programs, I was delighted to see Fast Company’s Most Innovative Companies 2019 list. This list is one of my top sources not only for the latest operating models enabling innovation, but also for how consumers are engaging with businesses today.

Looking back 10 years ago and assessing the YOY change in rankings, two things jumped out at me. The first—the primary YOY change in baseline business and consumer expectations is speed, this is, in the delivery of services, products and information. Accordingly, technologies, that enable this speed, e.g., transactional mobile apps, cloud-enabled services and online streaming content, remain core to enabling innovation. Approximately 75% of Fast Company's Most Innovative Companies 10 years ago and almost 90% today can attribute innovation to such technologies. As we’ve seen, digital transformation continues to be the push in today’s organizations in order to enable faster time to market, real-time integrated visibility to performance across the enterprise and more efficient and effective ways of operating aka process automation.

The second—there is a fast growing new layer of complexity to consumer expectations, made up of a demand for more tailored / personalized experiences that are interconnected across key facets of their lives, such as food, health and wellness, family and friends, shaped with their interactive feedback and grounded in responsible principles. That is, consumers expect that their experiences are being guided by companies that understand the importance of their safety (e.g., information security, food safety), wellness (e.g., organic, freshness) and morality (e.g., gender and race equality). This new layer of expectation is rooted in today’s new normal of constantly shared, interconnected and integrated experiences, as a result, shared data, lots of it.

As we see in this year’s rankings approximately 50% of companies (versus 10% 10 years ago) have capitalized on today’s data-generating society with AI innovations that build on and enhance digital transformation, enabling them to meet this demand.

Three of my favorites from the list this year –– At the top of the list is Meituan Dianping, a Chinese service company that connects consumers with local business for food take-out, hotel bookings, movie tickets, transportation and other services. Its AI capabilities take data generated in its high frequency apps to recommend services to users, resulting in $33.8 billion worth of transactions for more than 350 million people in 2,800 cities. Second, my personal monthly stylist, Stitch Fix (#5), who built on its iOS app with an Style Shuffle, the Tinder for clothes, to learn a client’s personal style. This data, in turn, is used to train the company’s algorithm, improving the overall accuracy of what it recommends and delivers to its clients. Stitch Fix generated $1.2 billion in FY 2018 and $366 million in Q1 FY 2019 and has been profitable since 2014. Finally, Sweetgreen (#6), my go-to for fresh salads made with locally-sourced ingredients. With 91 restaurants across 8 states, Sweetgreen installed sensors on one of its Boston-area farms to learn the best times for harvesting-and eating-local cherry tomatoes. This capability is being expanded to determine different variables that affect the latest profiles of other ingredients. Both laying the foundation for Blockchain to enable tracking of all the company’s ingredients from farm to restaurant, a move that will be game-changing to improving overall food safety.

As inspirational as these sound, the reality is, many organizations still have a ways to go to become an AI company, not to mention, a data-driven or digital enterprise. This transformation requires a shift to more agile ways of working, complemented by a high degree of comfort with automation, a realignment of core organizational business and IT skills, such as the python programmer vs excel-modeler, and a data and technology infrastructure that supports high compute power with a lot of data, often streaming, and with multiple integration points. It’s no wonder IBM stresses the importance of Cloud and Blockchain enabling technologies.

The new consumer era of tailored/personalized, interconnected, interactive and responsible experiences empowered by a data-driven, AI enterprise is inevitably becoming the new way of operating. At the minimum, to prevent the loss of existing, as well as to ensure a steady growth of the consumer base, companies today must ensure that AI is a part of the digital transformation strategy and roadmap.

Would love to hear your thoughts on where you see organizations, including yours, today with AI.