Many companies are currently in the process of trying to determine how best to incorporate artificial intelligence into their business operations. Because AI is constantly evolving technology, some corporate boards have reached out to executives with heavy tech backgrounds to help with this process. IBM recently made an addition to its board that suggests there is another way to attack AI integration.
In a press release, IBM chairman and CEO Arvind Krishna announced that PepsiCo CEO Ramon Laguarta had joined IBM’s board of directors in March. He noted, “Ramon’s background, expertise and proven track record of leveraging technology to transform large organizations make him an ideal director to help steward IBM and deliver significant value to our shareholders.”
As a company in the technology industry, IBM already had board directors with strong technology backgrounds and is initiating several new product launches that are intended to expand its software, AI and digital consulting business lines.
Instead of trying to explain to investors how the company would make multiple successful product launches involving AI with its current directors, the IBM board made the decision to add a director who has prior experience leading similar transformations at large companies. Once the company made the decision to change its business focus to AI transformations in several areas, the board made the prudent decision to change the composition of the board to complement that move. As AI adoption continues at its current breakneck pace, many other boards may face a similar decision just to compete with their peers.
As market conditions swiftly change, directors will need to react to those changes just as swiftly. That may require a more open-minded approach to board composition and business strategy. Board members may want to consider:
• Board refreshment may be a key component to implementation of a new business strategy. The advancement of AI technology presented new business opportunities and business risks for IBM. Adding a board member with proven experience and relevant insights into the successful integration of AI technology may need to be a necessary component of any pivot in business strategy involving AI. Corporate boards must be certain that they have people in their brain trust who can get AI tools to function at maximum efficiency. Board refreshment may also benefit changes in business strategy that do not involve AI.
• Capitalizing on AI doesn’t always mean strengthening technological expertise. Sometimes understanding how customers and employees respond to technology is more important than knowing the inner details of the technology itself. IBM added Ramon Laguarta to its board because the company needed to go through a cultural change before it could execute new product launches effectively. Employees must adjust to increased use of AI, and how AI enhances customer experience must be precise. Laguarta has executed such transformations at PepsiCo., and therefore his insight into how to approach challenges regarding AI will support the success of the new business initiatives.
• Having courage to be quick and decisive is more critical for boards than ever. To win over investors, the board had to be decisive and transparent. The board communicated the pivot in business strategy and quickly added a leader with expertise to help implement the new direction flawlessly. There was no time for debating whether the current board had enough skill to execute the new plan. Taking quick action shows that the board is implementing the business plan immediately, which if successful, should yield results for investors faster.
