Issue 19: TSR is the new CSR

August 16, 2019

This week, we're considering the technological social responsibilities of companies. What does TSR entail, why does it matter, and what does it mean for the future of business?

We'll also throw back to last week's email as we consider Amazon's publishing business. Finally, we'll look at three lessons from Germany's platform economy and check out Nike's first shoe subscription.


Focus: technological social responsibility

CAN AI HELP SOCIETY AS MUCH AS IT HELPS BUSINESS?


McKinsey partners Jacques Bughin and Eric Hazan ask, "Can artificial intelligence help society as much as it helps businesses?" They conclude it can, but only if business leaders embrace technological social responsibility (TSR) — which they define as "a conscious alignment between short- and medium-term business goals and longer-term societal ones" — as a new business imperative for the AI era.

Like its cousin CSR, TSR attempts to push businesses to think beyond their own bottom lines and financial interests and incorporate larger societal concerns into their decision-making. AI, automation and other emerging technologies all have the power to fundamentally reshape society, and the companies creating these tools must consider their larger ramifications. This would include things like upskilling labor forces to hedge against automation, building transparency and explainability into algorithms, or working alongside communities as authorities implement facial recognition technologies.

The authors acknowledge that we are just beginning to map out the many aspects of what constitutes TSR, and we strongly agree there needs to be a shared language around the multitude of societal challenges brought about from AI and automation.

Source: McKinsey Global Institute analysis

Source: McKinsey Global Institute analysis

Bughin and Hazan identify three priorities for business leaders, each of which is discussed below.

Priority 1: Understand and be convinced of the argument that proactive management of technology transitions benefits both society at large and companies' financial interests

The most important element of TSR: Management needs to take responsibility for technology's impact on society at large. Once again, similarly to Corporate Social Responsbility, organizations must address the externalities of their technological decisions. They must staff C-suites accordingly and imbue this ethos at every level of the organization.

For more on this, read: 

Priority 2: Have thoughtful and proactive workforce-management strategies at the core of digital reinvention plans

The disruption of labor due to automation, or people losing their jobs to robots, is one of the greatest challenges facing business and society. The article observes that "reskilling" or "upskilling" remains an afterthought in many companies, but active management of training and workforce mobility will be an essential task for boards of the future.

For more on this, read:

Priority 3: Embrace new, farsighted partnerships for social good

As adopting AI and other advanced technologies for social good will require cooperation from multiple stakeholders, especially business leaders and the public sector, creative partnerships are key

For more on this, read:

WHY WE ALL NEED TSR

Facebook’s latest privacy mishap, wherein real people were listening in to transcribe audio, reminds us of the importance of engraining TSR principles deep into organizations' ethos. Princeton professor Arvind Narayanan discusses this on Twitter:

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Extended Reading

Three Lessons From Germany's Platform Economy

Accenture's Svenja Falk and Frank Riemensperger offer three lessons for B2B companies from Germany's leading B2B companies: 

  1. Think creatively about the value network. (Hint: It’s not winner take all.)

  2. Institute platform openness in the spirit of glasnost.

  3. Take control of your data fears.

Nike's first shoe subscription, two years in the making, is here

Nike has launched its first-ever shoe subscription, Nike Adventure Club. The service — which was developed over two years with 10,000 families' feedback — sends shoes on a monthly, bimonthly, or quarterly basis at $50 or $60 a pair.

When your child grows out of a pair or they get worn out, you can send them back (along with any non-Nike pairs you want to get rid of) to the company in the Adventure Club box or by requesting a prepaid shoe bag. If a shoe is in good condition, Nike will donate it to a nonprofit. But if it has reached the end of its life, Nike will recycle it through its Grind program, which breaks down athletic footwear to turn it into other products, including running tracks and playgrounds.

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