Implementing a digital ethics strategy is no longer just best practice, it’s a critical component for sustainable success.
This is the second in a four-part series on digital ethics strategies. Part one explored in more detail what a digital ethics strategy is and why every business needs one. Today we’re going to look into the core benefits of having one.
Digital Ethics Strategies can be beneficial in leading to better products and services, brand differentiation, accelerated digital innovation and more.
Better Products and Services
50% of leaders in digital ethics report that their products and services are improved by their use of digital ethics approaches.
One example of a digital ethics approach is responsible AI, ensuring that ethics are at the heart of AI strategy and implementation. Companies can take this approach to see performance benefits. Vipin Gopal, Chief Data and Analytics Officer at Eli Lilly, explains: “It would be hard to make the argument that a biased and unfair AI algorithm powers better innovation compared with the alternative. Similar observations can be made with other dimensions of responsible AI, such as security and reliability. In short, responsible AI is a key enabler to ensure that AI-related innovation is meaningful and something that positively benefits society at large.”
Research by MIT Sloane and BCG has found that companies that prioritise scaling their responsible AI program over scaling their AI capabilities experience nearly 30% fewer AI failures. And the failures they do have tend to reveal themselves sooner and have significantly less impact on the business and the communities it serves.
Brand Differentiation
In today’s competitive landscape, brand differentiation isn’t just a strategy- it's a necessity that shapes where and why people choose to work. In the UK, 54% of people choose a place to work based on their beliefs and values. This is greater among younger employees, where 87% of Gen Z professionals would be prepared to quit their jobs to work elsewhere if the values of the new company were more closely aligned, and for 55% a pay rise would not be enough to convince them to stay. On the other hand, 43% of Gen Z employees say that seeing their employers fail to take ESG action was affecting their mental wellbeing.
Since 2021 there has been a 154% increase in entry-level job postings that mention company values. Hiring replacement staff costs, on average, 120% more than retaining existing employees, with new hires taking on average seven months to break even. Investing in ethics, therefore, can lead to 16:1 return on investment in staffing costs.
73% of consumers are willing to share more personal information if brands are transparent about how the data is being used. However, 45% of consumers would never trust a brand again after it displayed unethical behaviour or is involved in a scandal, and 40% say they’d stop buying from that brand altogether. In 2020 alone, annual spending on ethical products in the UK topped £121bn.
Greater digital innovation
Greater digital innovation is key to staying competitive, and ethics strategy planning serves as a vital framework for aligning technological advancements with organisational values. Ethics strategic planning helps enterprises focus on digital innovation by allowing internal and external stakeholders to collaborate on future technology and investment decisions. This collaboration ensures alignment with established organisational values.
Businesses focus on developing high-value strategies for digital innovation includes initiatives such as:
- Switching to accessible digital processes.
- Implementation of new software and platforms that are accessible and non-biased.
- Development of a new technology with guardrails to prevent inadvertent harm.
- Artificial Intelligence, Automation, Internet of Things connectivity, and big-data analytics with appropriate risk mitigation.
Further Benefits
There are other benefits to adopting a digital ethics strategy, such as:
- Managing existing portfolios by empowering leaders to evaluate their current dependencies and associated risk assessments in alignment with the organisation's vision and values. This ensures enterprise cost optimisation by conducting a cost-benefit analysis and redirecting funds to high-priority projects for maximise impact.
- Empowering digital transformation by helping organisations progress from the early stages to ethical maturity on an ethics maturity index, empowering them to become more adaptive to digital transformation.
- Improving risk management through enabling organisations to identify, assess, and mitigate ethics risks that may pose a threat to their operations and business. Organisations can enhance their security and ensure business continuity in the face of potential disruptions by developing strategies for mitigating ethics risks. By taking a proactive approach to ethics risk management, organisations can protect their critical assets, maintain compliance with internal and industry regulations, and maintain the trust of their customers and stakeholders.
For a good counter-example to this last benefit, take a look at the numerous videos of “racist soap dispensers” on YouTube to see where organisations have got this wrong. They show a soap dispenser which produces soap for a white person’s hand, but not that of a black person. While the developers of these soap dispensers may have valued diversity, this was not reflected in their products. The videos have been viewed millions of times across platforms (49m on TikTok alone as of writing this), leading to reputational damage and a likely loss of sales for the developers.
Every business needs a digital ethics strategy
Digital Ethics Strategies help organisations to have better products and services, brand differentiation, accelerated digital innovation and more. However, developing these strategies is not straightforward. While we all want to be ethical people, we often miss key considerations in applying our principles in the workplace as we are pulled in competing directions. Creating a robust strategy takes time and expertise in recognising and mitigating the different challenges organisations may face.
Sopra Steria has worked with clients to develop digital ethics strategies that carry through their corporate values into their technology and culture. If you would like to know more, then please contact Kevin Macnish.