Why your company needs an AI Policy before an AI Strategy

Are you a business leader staying awake at night afraid of falling behind the race of artificial intelligence (AI)? You're not alone. More and more companies are realizing the power and potential of AI to drive innovation, enhance efficiency, and gain a competitive edge, but a lot of them skip the part of having a policy in place.

Here are the main problems an organization may face if they jump straight to strategizing or experimenting without a policy framework:

Lack of Direction: A policy provides the guiding principles and ethical stance of a company. Without this, a strategy might lack clear direction, purpose, and alignment with the company's values and mission.

Ethical Blind Spots: Without a policy to set boundaries and define ethical considerations, a strategy could inadvertently promote actions or initiatives that are ethically questionable or outright harmful.

Inconsistent Decision-making: A policy provides a consistent framework for decision-making. Without it, strategic decisions might be made on an ad-hoc basis, leading to inconsistencies and contradictions in how the strategy is executed.

Increased Legal and Regulatory Risks: Policies often consider legal and regulatory compliance. Without this groundwork, the strategy might unknowingly breach laws, leading to penalties, lawsuits, and reputational damage.

Lack of Stakeholder Buy-in: Policies are typically developed with input from various stakeholders, ensuring their concerns are addressed. Jumping straight to strategy might overlook these concerns, leading to resistance or lack of support from key parties.

Inefficient Resource Allocation: Without a policy's guiding principles, resources (both time and money) might be invested in areas that aren't in line with the organization's broader objectives or ethical stances.

Difficulty in Adaptation: A policy often accounts for future changes and provides a framework for adaptability. Without this, a strategy might be rigid and less equipped to adapt to unforeseen challenges or changes in the industry.

Reputational Risks: If a strategy is executed that later proves controversial or harmful due to the lack of a foundational policy, it can significantly damage an organization's reputation.

Misaligned Priorities: Policies help prioritize what's essential for an organization, from ethical considerations to business goals. Without this, a strategy might focus on the wrong areas, neglecting critical issues.

Reduced Accountability: A policy sets clear roles, responsibilities, and expectations. Without it, it might be unclear who's responsible for various elements of the strategy, leading to potential gaps in accountability.

In essence, while a strategy could outline "how" to achieve objectives, a policy defines "what" those objectives should be and "why" we should avoid or embrace certain things. Especially when it comes to ethical and legal risks. A policy also gives the organisation better legroom for experimental freedom but with clear boundaries and guiding principles. Something that is needed when dealing with a techology that is rapidly changing and evolving. Reach out if you want help with crafting an AI policy that not only guides technology but also the future of your operations. The best way to do this in our experience is to start with a well prepared multi functional workshop. Something that we can help lead and facilitate.