Khwaja's Take on Hard Landing, Geopolitical Risk, IBM Think, ESG Shift, Prompt Engg, Quantum, Customer Loyalty, Tech Risk, CEO Attributes, etc.

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1. ?? Navigating Hard Landing: Strategic Role of Boards ??

On CNBC , Jamie Dimon emphasized that the odds of a hard landing and stagflation are higher than many anticipate. For boards, this means preparation is more critical than ever. A hard landing can lead to a mild recession, economic contraction, and?rising?unemployment. I counsel lead Directors and board committee chairs to oversee scenario analysis and strategic initiatives that balance?both?short-?and long-term visions.

??Key?Actions for Boards:

? Scenario Planning: Guide senior management in developing robust economic scenarios.

? Innovation and Technology Oversight: Leverage technology to enhance customer and employee experiences, invest in AI, and focus on outcome-driven metrics. Need ideas. Check out Arvind Krishna ’s IBM Think 2024 Keynote here (https://lnkd.in/ep8_W9rd ).

??Enlightened Board Questions for Senior Management:

? What opportunities are we exploring to cut costs?

? Are we on track with predictive and automation capabilities?

2. Why Boards Must Care About Earnings Growth Rate Through Customer Loyalty!!

I was reflecting on my meeting with IBM ’s Rob Thomas during the 2022 IBM Think event. Rob?was engaged and immersed?in taking notes?during his meeting with IBM?Customer Advisory Council?Members.

Rob’s vision of product led growth strategy and practices underscore the importance of customer loyalty. Under Arvind Krishna ’s leadership, Rob’s mantra is that client problems are IBM problems. And client opportunities are IBM opportunities. This collaborative, experience-based approach allows IBMers to respond effectively to the clients' needs.

Learn more here on Rob's fascinating insights and his keynote at IBM's Think2024 : https://lnkd.in/eCZuN4_t ].

Customer loyalty is a metric I advise lead directors and board committee chairs to be laser focused for the sustained value creation. As Fred Reichheld from Bain & Company emphasizes, the essential metric is the Earned Growth Rate—quantifying how much of your financial growth comes from customer loyalty. It’s a great proxy for outperforming financially without adding increased risk.

Two key numbers to figure out:

? Net Revenue Retention: Recurring revenue from existing customers.

? Earned New Customer Revenue: Revenues from new customers earned through recommendations and referrals.

I advise Boards to prioritize this as part of their oversight for sustained growth and profitability.

What do you think?

3. ?? Reflecting on a Remarkable Career and Board Journey! ???

I had an inspiring and forward looking board conversation with Milton H. Jones Jr. , a distinguished Board Director. Our memories included the legend Walter E Massey, Former Bank of America Chairman.

Under Milton's leadership, we achieved incredible milestones at Bank of America , including organic growth, M&A, groundbreaking advancements in technology and innovation, community development, and financial stability. Milton advises and collaborates with client board chairs, CEO’s and executives in key sectors that include financial services, healthcare, technology, government and higher education. For more than 32 years while at Bank of America, Milton held a series of senior executive positions with global responsibilities including roles reporting directly to the Chairman and CEO.

Key Highlights we did together at 美国银行 :

? Expansion & Growth: Spearheaded M&A integrations like FleetBoston, LaSalle, MBNA, Countrywide, and Merrill Lynch.

? Technology Leadership: Led technology architecture, infrastructure, and security, driving modernization and tech debt reduction.

? Community Impact: Enhanced environmental sustainability and corporate social responsibility efforts.

? Financial Stability: Enhanced efficiency, saving $1.2 billion annually, and improved customer satisfaction.

My career at Bank of America was special as I served as a technology Leader across multiple economic cycles. I was responsible for technology architecture, infrastructure, and security, including BofA acquisitions. Owned strategy and holistic portfolio, including modernization, and tech debt reduction, to drive revenue, efficiency and cost savings.Similar to IBM and GE , it is incredible how many leaders like Amy Brady , Andy Sieg , Barbara Desour, Marc Gordon , Rahul Samant , Kim Grim , Don Obert ,Howard Boville , David Reilly , Deborah Guild , J. Kevin McLees , Kevin Eggleston , Goutam Gandhi , Frank Martos , Anne Finucane , Justin E. Skelton, MBA , Willie Anderson II , Gregory Montana , Casey Rai , Frank Venditti , Angela Yochem , and others emerged from Bank of America, driving meaningful work across various firms.

What’s been your most impactful career moment? Share below in comments! ??

4. Board's Digital Transformation Oversight

As I engage with Board Directors and collaborate with senior management, I often notice that most digital transformations fail due to a lack of foundational capabilities, talent, and execution accelerators.

The board's effective technology oversight makes all the difference in the value creation. When you have an innovation/technology and cybersecurity committee, you can ask tough questions and balance?both?short-term and long-term objectives.

Mohamad Ali had great insights at Think 2024 regarding the need for clients to do quicker and accelerate time to value. Under Mohamad's leaderhip, IBM's open approach includes?IBM Consulting Advantage -IBM's AI services platform that?brings together?a portfolio of Assistants, assets?and?methods that use technology from IBM and strategic partners to empower IBM consultants to deliver value for clients with consistency, repeatability, quality?and?speed.

5. ?? Boards play a critical role in AI oversight.

Value migrates if you are not nimble and don't offer a competitive advantage through differentiation and customer-centricity. It is the advice I give to senior management as I engage and co-create AI strategy as part of the Board's technology oversight and effectiveness.

?? My Take for Boards:

? Tech-savvy board directors must ask tough questions regarding capital allocation and cost effective alternatives through Open Source AI Technologies and Retrieval Augmented Generation (RAG) Solutions.

? Vector Databases: Per WSJ, vector databases thrive due to AI Technology - RAG. Gartner 's Arun Chandrasekaran highlights Pinecone's success tied to early market entry, AI model integration, and cloud-based management.

? RAG Use Case: IBM 's Rob Thomas states RAG is the top use case when working with clients.?? Don’t miss out—ensure your board is prepared for the AI revolution.

What questions do you think boards should ask about AI strategy? Share your thoughts!

6. Boards must level up oversight on geopolitical risk!

??Kristina Hooper ’s insights on Bloomberg on this are invaluable. As I counsel chairs of nomination & governance committees and lead directors, it's clear: boards need "T" shaped skills more than ever.?

IBM expanded access to watsonx technologies across the AI ecosystem, paving the way for a more flexibility and advanced future. Arvind Krishna unveiled new initiatives spanning open source, the #watsonx platform, and IBM’s automation software and consulting portfolios.

My take for boards in overseeing geopolitical risk:

Digital Divides: China, the EU, Russia, and the U.S. are drifting apart ideologically, signaling the end of the traditional global operating model.

Avoid concentration risks at all costs.

Enterprise Maturity Models: Boards must ensure senior management aligns technology, operations, and corporate structures with geopolitical realities.

Country Dependency Risk: Assess risks involving sovereign data, security, privacy, safety and digital trust.

How is your board preparing for these geopolitical shifts? Share your thoughts!

7. Gen AI Architecture battle!!

Arvind Krishna has an important advice here. Listen to a technologist who has seen and overseen multiple technology cycles.

My Take on IBM Think 2024:

? Embrace open?source?rather than closed source (proprietary) LLMs underpinned by robust AI governance.

? Go for an?enterprise grade?Gen AI stack like watsonx.Learn more here (https://lnkd.in/e6nqCH96 ).

? Longer-term Gen AI startups may not have funding to scale their businesses. It is a significant financing risk.

? Depressing Gross margins (below traditional cloud software) due to significant infrastructure?cost.

? Doubledown on resilient ecosystem by partnering with established players like IBM to avoid significant turbulence and disruption

?? It is?a urgent?topic that I have been engaging with CEOs and Boardrooms. Enlightened boards provide oversight for how AI risks are chosen and handled.

?? Open Source Innovation, reducing concentration risks?and?achieving?collective?defense model through cyber resilience are?few?topics that no C-suite and boardrooms should ignore.

8. Boards' Oversight on Technology Risk: A Crucial Agenda

Per Fortune 's AI newsletter, Microsoft CEO Satya Nadella emphasized that the company's "license to operate" hinges on trust and driving economic growth.

Although I applaud Satya Nadella for his contextual intelligence and "learn-it-all" mindset, he is treading a thin line when it comes to Open AI.

My Take:

The Board's oversight of technology risk is often overlooked. As I counsel lead Directors and CEOs, anchoring noble purpose with a good tech-aligned business strategy is essential. Trust is foundational for business longevity.

Boards must seek metrics on technology investment returns that drive economic "and" social value.

The audit committee should also oversee risks from Generative AI & large language models, including:

1???Cybersecurity Risk

2???Reputational Risk

3???Third-party Exposure

4???Data Leakage Risk

5???Legal Liability for Generated Content

6?? Accidental Data Breach

Recommendation

It's time to take action. Establish a Technology Risk Committee or an innovation/technology and cybersecurity committee to oversee technology risk such as AI Risk. This commiteee will play a crucial role in overseeing senior management on enterprise-wide GenAI usage, risk mapping, policies, governance, and talent risks.

9. Stanford's AI index.

Kudos to Kevin Klyman . If you sit on a Board or chair the innovation/technology and cybersecurity committee, look at this study. Whom should we partner with, and how will we deal with the nascent vendor market, etc.? These are the top oversight questions boards are dealing with today.

If you are building a custom Gen AI capability then understand that there is a systemic lack of transparency in some areas of the AI supply chain. Intellectual property and copyright issues are the board oversight risks.

Companies lack transparency on issues relating to data, like the copyright status of and presence of PII in the data used to build foundation models. Companies also do not share information about the nature of their models’ downstream impact, such as the number of users and how their models are used.

10. ?? The Future of CEO Leadership ??

At IBM Think 2024, the insights were clear: Clients must prioritize a product mindset to drive superior customer experience and profitable growth. ?

I counsel lead Directors to look for?product?mindset, contextual intelligence and high EQ as part of CEO succession planning. Gone are the days of solely focusing on general management or finance skills. Today's CEOs need to be hands-on, balancing long-term vision with short-term agility.

High-performing CEOs like Arvind Krishna and Shantanu Narayen exemplify this, driving IBM and Adobe forward with their CEO super powers -product mindset, contextual intelligence, optimism, self-awareness, authenticity, and genuine humility.

Exciting developments announced at IBM Think 2024 include IBM and Adobe's collaboration on hybrid cloud and AI, integrating Watsonx with Adobe's platforms. These innovations are set to transform industries by 2H24.

Do you think product mindset is crucial for future CEOs? Share your thoughts!

11. ?? The Importance of Prompt Engineering in Your AI Journey ??

Kudos to JPMorgan Chase & Co. for investing in new hires on prompt engineering. Prompt engineering is critical for harnessing the full potential of AI.

Here's why:

1. Optimizes Output Quality:Master prompt constructs like chain of thought and prompt chaining.Use frameworks and vector embeddings for effective prompts.

2. Enhance Accuracy:Add metadata to databases for better indexing.Employ vector embeddings for relevant unstructured data.

3. Mitigate Risks:Build repositories of model instructions tailored to user prompts.

4. Cost Considerations:Customize smaller models for specific use cases but be mindful of costs.

Ready to elevate your AI game? Share your experiences with prompt engineering below!

12. Cybersecurity: A Boardroom Imperative!

Learn more here (https://lnkd.in/eMArpwGc ). As cyber threats evolve, the?board's?role in overseeing cybersecurity has never been more critical. The attack surface is expanding, driven by AI acceleration, yet security tools are still catching up. Recent cyberattacks have severely impacted Rx filling at Change Healthcare , a division of UnitedHealth Group , highlighting this?issue’s?magnitude.

Key Concerns:

? Systemic Risk: Holistic risk management is essential.

? Insider Threat:?Many breaches?are driven?by insiders.

? Opportunity Risk: This is a business issue needing immediate attention.Boards must adapt by refreshing board with cybersecurity and digital skills, forming standing technology/innovation and cybersecurity committees, and conducting cybersecurity culture audits.

???Call to Action:

Strengthen CISO boardroom reporting to include quantifiable business value, threat environment trends, controls status and performance,?along with?management actions and plans.

How is your organization addressing cybersecurity at the board level?

13. Overseeing corporate strategy is a crucial board responsibility.

Many boards are not adequately prepared to co-create AI strategy and approve strategic plans related to AI. Few boards have delegated to committees on AI, requiring more in-depth discussions and decision-making processes.

For instance, some firms have chosen to outsource their AI strategy to an API call (Chat GPT, GPT4 etc.) rather than recalibrating the risk profile and risk appetite for value creation.

It's essential to note that it costs millions of dollars to create a customized large language model that aligns with your business needs using your data.

What are your thoughts on the challenges boards face in navigating AI strategy and decision-making processes effectively?

14. Geopolitical risk and AI acceleration are reshaping the risk landscape of board oversight.

?? Reflecting on McKinsey & Company ’s Celia Huber , Ziad Haider , and Sean Brown ’s excellent insights (More here: https://rb.gy/1tlhkf ) on navigating these challenges reminded me my conversation with Jon Huntsman Jr.

In 2021, I had a fruitful discussion with the legend Jon Huntsman Jr. , Former Governor (including Ambassador to China and Russia) about emerging issues, including technology ethics, China and Russia. Engaging with CEOs and boardrooms on these pressing topics, I've emphasized the importance of enlightened oversight on these key risks.

? Key Focus Areas:

1?? Open Source Innovation: Reducing concentration risks and fostering cyber resilience.

2?? Diverse Board Perspectives: Essential for navigating our fragmented world.

3?? Committee Roles: Risk, Technology, and Compensation Committees need to stress-test scenarios with a multi-stakeholder approach.

4?? Director Education: Stay updated on the CHIPS Act, AI Risk Management Framework, and EU's AI Act.

5?? Regular Reviews: Monthly reviews and site visits are the new normal.

6??Tech Oversight: Address cloud concentration risk, infrastructure resilience, AI risk, third-party viability, and personal data fragmentation.

7?? Regulatory Compliance: Understand regulations like EU's GDPR, China's Data Security Law, and India's PDPB.A capable board and deep engagement with key stakeholders are essential.

??What strategies have your boards adopted to navigate geopolitical risks? Share your thoughts!

15. Important points to reflect if you sit on a corporate board overseeing strategy, innovation and technology.

1. Disruption is overrated

2. Human factors are everything

3. We’re all susceptible to this one kind of tech B.S.

4. Tech bubbles are useful even when they’re wasteful

5. We’ve got more power than we think

16. The Medicare Bubble Has Burst:

Strategic Pivots for Corporate BoardsAccording to The Wall Street Journal , Cigna Healthcare is exiting Medicare Advantage. This highlights the need for boards to adapt. The health insurance landscape is shifting from managing risk to addressing consumption.

My take for Healthcare Boards:

? Oversee Outcome-Driven Metrics: Dig deep on technology investments and operational excellence.

? Embrace Multistakeholder lens: Look through a broader lens for future growth. It's time for healthcare corporate boards to focus on differentiation and transformative value plays.

??? What strategic pivots do you foresee in the health insurance industry? Share your insights below!

17. ?? Why Gap Needs an Innovation/Technology and Cybersecurity Board Committee ??

To stay ahead in today’s fast-paced market, my advice for Gap to unlock value through innovation/technology and cybersecurity committee.

Here’s why:

1?? Engage and Oversee Gen AI Metrics: Enhance search functionality and upselling capabilities, encouraging more-expensive purchases and add-ons.

2?? Infuse strategic inserts like Customer-Centric Merchandising: Use AI for personalization and best-fit appeal technology, creating tailored shopping experiences with emotional connections.

3?? Boost Cybersecurity Oversight: Make senior management accountable in safeguarding customer data and ensure robust security measures.

?? Kudos to Gap's new CEO, Richard Dickson , for his insightful approach to brand building. Fashion isn’t just about products—it's about the story and emotional connection with consumers. Cross-selling is a significant value play, and staying in touch with the front lines offers invaluable insights. Dickson said the secret to building brands is?give?them a strong point of view,?make?relevant products?and then market?them in a way that creates emotional connections with consumers.?You want customers to be drawn to the product, not overwhelmed by promotions.

Let’s embrace innovation and tech to propel Gap into the future. What are your thoughts on this strategy?

18. ?? The Board’s Crucial Role in GenAI-Driven Portfolio Optimization

??Portfolio optimization, a key focus for board directors, takes on a new dimension in the era of GenAI. Through my discussions with lead Directors, innovation/technology, and cybersecurity committee chairs, I've seen a shift in perspective.

While some senior executives concentrate on efficiencies, productivity, and cost savings, forward-thinking executives are energized by the potential of GenAI to open up new revenue streams and industry adjacencies.

GenAI’s Impact on business models and value propositions:

1???Revenue Growth: Uncover disruptive opportunities.

2???Cost Reduction: Enhance productivity and efficiency.

3?? Risk Management: Improve oversight and mitigation.

I counsel General Counsels and nomination and governance chairs to review board skills matrix and refresh the board. An enlightened board with "T" shaped skills excels at asking the right questions and ensuring received answers are accurate:

? How will GenAI disrupt our business model?

? What are our competitors doing in GenAI?

? How should we factor GenAI into our talent strategy?Strengthen your board’s oversight in technology, innovation, and cybersecurity to optimize for the future.

?? How is your board preparing for the GenAI revolution?

?? Learn more about the impact of GenAI on corporate strategy from my LinkedIn piece here [https://lnkd.in/eExrxSpC ]. Also, check out Boston Consulting Group (BCG) 's take on Gen AI.

19. Red teaming for generative AI

?? In today’s AI age, the importance of a board's cybersecurity and AI acumen is paramount, akin to their financial acumen. The May issue of IEEE Spectrum article sheds light on how red teaming—an essential cybersecurity technique—can falter in AI systems.

? It is a topic that I have been emphasizing with lead Directors and committee chairs on the need for the board's best-in-class cybersecurity "and" AI oversight.

? Like understanding financial statements including balance sheet, cash flows etc, Board Directors should be well-versed in cybersecurity terminologies like Zero Trust, Tabletop Exercises, and especially Red Teaming.

? Board Directors must commit to lifelong learning, and only then can they engage senior management by digging deep in protecting networks and data. It requires enlightened oversight when applied to AI, where risks like prompt attacks, data poisoning, and backdooring loom large.

? The consequences of neglecting these aspects are severe, with the potential for reputational damage and value migration. Therefore, it’s crucial for boards to insist on metrics on red team outcomes for AI models and tie these to senior management compensation, ensuring accountability.

? Furthermore, akin to the financial due diligence performed by audit committees, board oversight on AI must extend to include independent third-party validation of AI models from a red team perspective. This approach not only safeguards the organization but also fortifies trust among stakeholders in an era where digital resilience is non-negotiable.

Want to learn more?

Check out IBM Fellow Kush Varshney 's take here (https://lnkd.in/eg2Fp42Q ).

Your thoughts? How can boards demand of themselves relevance to the enterprise's AI coming wave?

20. ?? A Shift in ESG Strategy?

??Recent findings by The Wall Street Journal and the Committee to Unleash Prosperity reveal a fascinating turn in ESG proxy voting trends. In 2023, support for ESG proposals saw a notable drop - 25% less than the previous year. This decline is especially pronounced among the top 25 most active fund families, retreating by 30%.

????What's behind this shift? A growing skepticism towards the recommendations of proxy advisers ISS and Glass Lewis plays a part. These firms, dominating the market with their guidance on shareholder votes, have historically backed ESG heavily. Yet, with grades like a D for Glass, Lewis & Co. and an F for ISS, their influence is being questioned.

? Jamie Dimon 's call for more independent research by fund managers before voting reflects a broader sentiment that's emerging. It seems there's a renewed focus on fulfilling fiduciary duties to investors, prioritizing returns over advocacy.

??This pivot raises important questions about the future of ESG investing and the role of proxy advisers in shaping investment strategies.

???What do you think? Is this a temporary setback for ESG, or are we witnessing a fundamental change in how investment priorities are set?

21. Leadership Insights from Oscar Munoz on Board Excellence

?? This week, I had a chance to glean insights (podcast here https://lnkd.in/eQnn3muz ) from Oscar Munoz on the essence of boardroom excellence. His profound advice? A blend of empathy, authenticity, and preparedness shapes the future of enlightened board leadership.

I had a pleasure of interacting with him in Jacksonville on the power of good tech and his engagement with another higher purpose leader -Jim Whitehurst .

His genuine humility and authenticity echo the traits pivotal for tomorrow's leaders.

Susan Paley always brings a breath of fresh air and relevancy to the boardroom issues.I highlighted Oscar's book on my 2023 LinkedIn piece here (https://lnkd.in/e49nnNpj ).

Key Takeaways:

1?? Succession Planning is crucial.

2???The power of Genuine Humility can't be underestimated.

3???Crisis Management requires in-depth preparation.

4???The importance of Listening and Learning.

5???Engaging with the front lines enriches moral leadership.

6???Transparency and Human Empathy are foundational.

??Oscar's approach to board leadership is not just about strategies but about integrating inclusivity and meritocracy into the boardroom.

?? Action Point: It's time to weave these leadership traits into CEO Succession Planning on our board agendas.What leadership qualities do you find most effective for board excellence? Share your thoughts!

22. Strengthening Cybersecurity Governance, a Board imperative

In today's geopolitical and rapidly evolving technological landscape, it's crucial for boards to apply a holistic lens to cybersecurity. I echo McKinsey & Company ’s sentiment on organizations needing to adapt holistic strategies to bolster their cybersecurity effectiveness. In my conversations with CEOs and Lead Directors, my engagement and advice is clear: we must elevate our game in cybersecurity. This begins with boards establishing a dedicated Innovation/Technology and Cybersecurity Committee to co-create AI strategies that resonate with the company’s core mission and vision.

Key Considerations for Boards:

1?? The Human Element: Cultivating a robust cybersecurity culture is paramount, as 82% of breaches involve human error.

2?? Regulatory Landscape: Education at all levels, including the Board, is essential to navigating the complexities of cybersecurity regulations.

3?? Emerging Technologies: The role of new tech in strengthening defenses is critical, yet outsourcing cybersecurity completely may not be the answer.

4?? Enlightened Boardroom: Focus on prediction, prevention, and preparation while not neglecting the culture components of cybersecurity.

5?? Accountability: Elevate CISOs to strategic partners, emphasizing risk and resilience in boardroom discussions.

6?? Strategic Integration: Cybersecurity must be a core component of strategic decision-making, requiring thorough understanding and collaboration.

7?? Metrics for Strategic Decisions: Adopt a forward-thinking mindset to identify and invest in effective cybersecurity measures.

8?? Investment: Collaborate closely with CFOs to understand and manage material risks appropriately.

9?? Continuous Assessment: Cybersecurity maturity and risk assessment should be an ongoing process.

?? Culture and Risk Tolerance: Boards should seek metrics on culture in relation to risk tolerance and enforce policies that support a "T" shaped skill set in the boardroom.Boards have a pivotal role in aligning cybersecurity with business, operational, and reputational risk management. The time to act is now.

23. ?? Quantum Computing: A Boardroom Priority ??

IBM 's Arvind Krishna recently highlighted Quantum Computing's immense potential at Rensselaer Polytechnic Institute . The unveiling of the first IBM quantum computer installed on a university campus marks not just a significant milestone for academia but a leap forward for the entire quantum research community and the Hudson Valley region.

???Why Boards Need to Pay Attention:

??Quantum Supremacy & Quantum Advantage: Understanding these terms is crucial for strategic planning and staying ahead in the competitive landscape.

??Cybersecurity Implications: The advent of quantum computing brings challenges to current encryption methods. Familiarity with quantum-resistant algorithms, specifically lattice-based and hash function cryptographic algorithms, is essential for safeguarding data against potential quantum cyber breaches.

??Quantum Utility brings these advancements from theory to practical application, including enhancing national security and economic positioning.Boards must stay informed about Quantum Computing's evolving landscape—it’s no longer a futuristic concept but presents a strategic advantage. How is your organization preparing for the quantum leap?

24. ?? Board Oversight in the Age of Innovation ??

The digital landscape is rapidly evolving, and with it, the role of board oversight in technology and innovation. Recent reports, including one from The Wall Street Journal , highlight Colorado and Illinois investing millions in quantum computing—a testament to the strategic importance of localized innovation initiatives.

I advise lead directors and tech committees to:

Scale Innovation:

Develop metrics for the value of innovation programs, focusing on regions with strong government support and local expertise.

Co-create IT Strategy:

Ensure comprehensive oversight of IT strategies and operating models, adapting to global digital regulations.

Monitor Cyberspace:

Request annual briefings on the digital environment to stay ahead of cybersecurity threats.Your board's active engagement and foresight can significantly impact your company's agility and responsiveness to technological advancements.

How is your board adapting to oversee technology and innovation effectively?

25. ?? Attention Board Directors: Is Your AI Strategy Future-Ready? ??

Big News in AI from OpenAI and Google . As the chair of innovation/technology, and cybersecurity committee, you have a lot on your plate?in?addressing the rapidly evolving AI landscape.

Here are some critical trends I have been engaging with the boards for the new tomorrow:

1?? Rise of Specialized AI Models: The GenAI models like GPT-4?is?not the only?model?out there. Your oversight on capital allocation decisions must be risk-based and more use-case or context-specific models of smaller size.

2?? Open-Source vs. Closed-Source Battle:?Open-source AI models are rising in prominence.

3?? Multimodal AI Foundation Models: AI foundation models will increasingly integrate multiple modalities such as text, voice, and vision. Have you done culture audits to oversee simplification imperatives?

4???Rapid Evolution: Anticipate the fast evolution of technologies like GenAI marketplaces, multimodal models, and autonomous GenAI agents.

???Crucial Board Oversight Questions to Address:

? What are we doing due to the increased attack surfaces of LLM solutions?

? Do we need a sub-committee to address the evolving regulatory risks concerning LLM usage?

? What metrics should we seek to address?security?and privacy implications of LLMs?As a board director,?it's essential to dive deep into these questions to ensure your organization's AI strategy is robust, and future-ready.

??What other AI trends or concerns are on your radar?

26. ?? Board's Critical Role in Seeking Innovation Metrics

??My recent discussions with forward-thinking board directors have revealed a growing interest in seeking key innovation metrics, such as venture capital investments, as a means to gauge their company's readiness for the AI revolution. ??This shift in focus is a clear indication that businesses must pivot immediately with new product/service propositions and business models to stay competitive in the AI era.

????Having witnessed the rapid evolution of ERP, Internet, mobile, blockchain and now in AI and its impact on various sectors, I strongly believe that this could mean:

1???Developing new business models for long-term value creation ??

2???Introducing innovative products and services to drive profitable growth ??

3???Augmenting capabilities and functionalities of existing offerings to accelerate Earnings Growth Rate ???

??To navigate this business transformative journey successfully, enlightened boards must co-create an AI strategy that looks beyond the adoption of generative AI. While leveraging AI for competitive advantage is crucial, being prepared for a significant pivot in your business is equally important. ??

??I encourage forward looking boards to embrace this change, explore new opportunities, and contribute to shaping the future of their respective industries. Boards can unlock the true potential of AI and drive unprecedented growth.

?? Share your thoughts, experiences, or questions in the comments below. ??

27. Complexity of Business Transformations require IBM Consulting Advantage

As I engage with Board Directors and collaborate with senior management, I often notice that most digital transformations fail due to a lack of foundational capabilities, talent, and execution accelerators. The board's effective technology oversight makes all the difference in the value creation.

When you have an innovation/technology and cybersecurity committee, you can ask tough questions and balance?both?short-term and long-term objectives.

Mohamad Ali had great insights at Think 2024 regarding the need for clients to do quicker and accelerate time to value. Under Mohamad's leaderhip, IBM's open approach includes?IBM Consulting Advantage -IBM's AI services platform that?brings together?a portfolio of Assistants, assets?and?methods that use technology from IBM and strategic partners to empower IBM consultants to deliver value for clients with consistency, repeatability, quality?and?speed.

Learn more here (https://tinyurl.com/4ksf3y8u ).

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For professional insights into complex issues, join the?conversation by tweeting Khwaja at @Khwaja_Shaik or?connecting with him on LinkedIn .

ABOUT KHWAJA SHAIK

Khwaja Shaik, a digital expert and cyber-savvy board director, brings over 25 years of global experience in technology, cybersecurity, sustainability, nimble innovation, and fintech. He is a sought-after advisor for CEOs and boards globally, providing invaluable insights at the nexus of technology, cybersecurity, and financial services. Khwaja drives profitable growth through innovation, digital acceleration, and risk management. With a career spanning renowned companies like IBM , Bank of America Merrill Lynch , Al Rostamani Group , and PwC , he is internationally acknowledged as an authority in corporate governance, technology governance, VC/startup incubation, and digital resilience.

Khwaja advises CEOs, Boards, and Startups on carving out Future-Fit Tech strategies aligned with board priorities. But beyond his illustrious career, Khwaja's true calling lies in altruism. He staunchly believes in weaving noble purpose into business strategies, championing a model of multi-stakeholder capitalism. Committed to societal transformation, he strives to leave a profound impact through socially responsible, ethical technology, and privacy-centric practices.

Khwaja is a visionary leader with a proven track record of success in transforming businesses through innovation and digital. He has an innate understanding of how to harness technology to create better customer experiences and future-proof operations.

At Bank of America , he managed risk and infused Fintech and Cloud best practices into the firm’s strategy, saving the company $1.1 billion per year during the 2008 financial crisis. At PwC , he incubated new businesses to grow revenue across multiple economic cycles, reshaping industry and platform operating models— digitizing end-to-end business processes to capture value, and protecting firms from cyberattacks through digital resilience.

Khwaja has a history of leading over $10B in digital business transformations by scaling Agile practices for cost optimization, revenue-generation, and societal transformation imperatives. It includes strategic oversight, risk mitigation, business optimization, digital business models to capture profitable growth, customer lifetime value & competitive advantage to Fortune 500 firms.

Khwaja delivered a modern banking platform and transformed the Omnichannel customer experience through world's largest Contact Center platform, serving 1 billion calls, as part of BofA's M&A (CFC, MBNA, Fleet, etc.) to support the AI-led growth strategy.

Khwaja is one of the most exceptional IBMers appointed, with the rare distinction of IBM Academy of Technology member. Holds many patents serves on IBM’s Invention Board. Khwaja is one of the top 100 leaders elevating corporate purpose, driving AI ethics, privacy, data stewardship, regulatory/compliance and sustainability. He provides the direction of IBM's long-term strategy through ESG and good tech.

Khwaja serves on the Museum of Science & History and University of North Florida boards to promote economic equity, social, diversity, and inclusion for the prosperity of all. He teaches emerging tech, systemic risks, cybersecurity, AI ethics, and privacy-by-design efforts at University of North Florida and Competent Boards .

Khwaja is a frequent speaker on Board Practices, Technology, and Cybersecurity at NACD (National Association of Corporate Directors) , Competent Boards , New York University School of Law , American College of Corporate Directors , Boardswell etc.

Khwaja is a Fellow of The Herndon Foundation Board Institute, sponsored by Nasdaq & Atlanta Life. Khwaja is proud to be part of both Ascend Leadership 's Pinnacle Aspiring Directors Academy and University of North Carolina at Chapel Hill School of Law's 2023 DDI Board Boot Camp. Khwaja holds an MBA and an Engineering degree. Khwaja lived in India, Middle East, experienced three different cultures, reads too much, doesn’t do enough gardening, married for over 24 years with two remarkable boys.

More details on Khwaja’s career and thought leadership activities could be found via Linkedin, Khwajashaik.com or follow him on Twitter @Khwaja_Shaik

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