"AI's potential is undeniable - but for many organizations, the path from ambition to impact is riddled with risk. Forty-seven percent of executives say AI has not met their expectations. To change that, firms need a clear framework that balances risk and innovation from day one by aligning goals, measurement, and execution. In this article, we break down key steps of the De-risking innovation in the age of accelerated AI guide so that organizations can turn bold moves into smart bets."
"Before launching an AI initiative, organizations must first calibrate their ambition to their risk appetite. Mastercard's framework outlines three strategic orientations - to keep pace, differentiate or trailblaze - each with a distinct risk profile and expected returns: Keep pace: These initiatives focus on matching competitor performance and capabilities. They carry the lowest risk and typically yield incremental gains in efficiency and productivity. The goal is operational parity - ensuring the organization doesn't fall behind."
Firms must balance risk and innovation by aligning goals, measurement, and execution from project inception. Initiatives should be calibrated to organizational risk appetite across three strategic orientations: keep pace, differentiate, and trailblaze. Keep pace initiatives pursue operational parity with low risk and incremental efficiency gains. Differentiate projects pursue better customer experience, workflow efficiency, or pricing for moderate risk and measurable improvements. Trailblaze efforts pursue new business models or technologies with higher uncertainty and potential outsized returns. Identifying an initiative's orientation enables appropriate strategy, resourcing, and expectations. Clear metrics for business outcomes are essential to assess progress, pivot effectively, and prove value.
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