Companies are racing to become AI-capable to leverage the promised productivity and other gains of AI across their teams . This shift is often called AI transformation or digital transformation, and includes a complex mix of technical, human, and organizational elements. But a key question that every company should answer for itself is, beyond the speed of AI adoption and digital transformation, what is now our key asset? I argue it is Corporate Taste, and it is uniquely hard to protect, because it lives in your employees’ judgment. You can require that they not take your IP to a competitor. You cannot require that they leave their judgment behind.

Traditionally, competitive assets have included software, design specifications, institutional knowledge, customer lists, credibility, and many more. The arrival of AI has, in many ways, changed how quickly a competitor can replicate traditional assets. For example, a product with a large number of features, which historically took decades to develop, can now be created in a small fraction of the time, with a small fraction of the staff. Integrating cloud technologies, Software as a Service APIs, and AI can create cheaper-to-operate product mimics, especially when measured by units sold. Which leads to the question, which assets matter now, and how does a company protect them?

Introducing Corporate Taste

You may have heard of Taste as being one of the key individual workforce skills in the AI world. Taste, also called domain expertise, judgement, instinct, etc. , means what the individual understands about the business domain, the customer need, the true challenges and values that can translate into meaningful requests to a powerful AI.

One way to illustrate individual taste is to consider the difference between a new cook and a master chef. Given the same ingredients, a new cook may look up recipes in a book, or just try many things. A master chef, operating from decades of experience, will instinctively know which ingredients together create an amazing dish. It may even be a dish they have never made before. An equally valuable element of taste is knowing what not to create. In a world where AI will build almost anything it is asked to, competitiveness can come from knowing which journeys to avoid spending money and time on.

While all of the above was described in an individual context, it applies to companies as well. Consider:

  • Companies have institutional knowledge about what their customers need and want. Often this knowledge was learned the hard way, through mistakes, experiences, and folk tales told from team to team.
  • Companies have cultures. Often reflected from leadership, these cultures can prioritize values like scrappiness, transparency, accountability, customer value, and so on. These cultures serve to train new employees on what has worked in the past.
  • Companies also develop best practices not just in what they choose to do but also what they choose not to do. The latter is critical and rarely documented.

I call this Corporate Taste, for lack of a better word, the personality of a successful organization that it passes along to new employees and evolves with new experiences.

One may ask, isn’t this culture? No. Culture is how you operate ; institutional knowledge is what you know ; Corporate Taste is the judgment about what to choose and which problems to solve, which to build, and which to walk away from.

Corporate Taste As A Competitive Asset

As AI makes it easier to create, deploy, and test new products, competitiveness can come down to good decisions, knowing what to do and what not to do. AI can learn these decisions over time, but they often live inside the minds of your team members. That collective knowledge, practice, and culture is a critical asset that can increase your AI force multiplier - the amount of business value you get from a unit of AI-driven work.

However, as noted before, this asset is also hard to protect. When an employee leaves a company, existing legal protections (such as IP clauses in employment contracts) prevent them from taking physical artifacts such as code and design documents to their new employers. Employment contracts also often prevent employees from recruiting others from your organization. However, you cannot mandate that they leave their judgement behind. With AI, that judgement could be all it takes to create a powerful competitor inside another company.

There are several things that you can do to protect your business.

  • The first is to recognize that judgement is now a key asset. This means that the organization needs to have a strategy to document and share judgement. Possible inspiration can come from medical training processes, where patient rounds with practicing physicians enable learning of judgement.
  • The second task is to document judgement. Organizations regularly document decisions made. What is rarer is documentation on why a decision was made the way it was, what factors were predominant. Rarest of all, and most valuable, is the record of what the organization chose not to do and why. The rejected option, the product not built, the market not entered, the feature deliberately left out, is the highest-density record of judgment a company has, and it is rarely written down. We document our decisions to act; we discard the reasoning behind our decisions to refrain, which means the purest expression of Corporate Taste is usually the first thing lost.
  • Protecting human value. The easiest way for your Corporate Taste to reach a competitor is in the mind of an employee who leaves. Particularly now that AI is often seen by humans as a threat to their employment, it is even more critical to stop your Corporate Taste from crossing the street to your competitors’ office.
  • Respecting human value also means being consistent and clear that documenting and teaching Taste is not an attempt to extract knowledge before replacing the person. Any organization that gives this impression will likely deserve the lack of trust that it will get. The medical training example can also provide a guide here as well. Attending physicians is one of the most limited resources in a hospital, a fact not changed by having trainees during rounds.

The most effective approaches transfer judgment the way it is actually learned, not through documentation alone, but through exposure: apprenticeship on real decisions, shadowing senior people as they weigh options, and review rituals where the reasoning behind a choice is made explicit out loud rather than left implicit. Again, medicine offers the clearest model. Clinical judgment cannot be handed over in a manual, yet teaching hospitals transmit it reliably through rounds and case review; juniors watch experienced physicians decide, including what they choose not to do, until the judgment becomes their own.

Finally, one may worry that transferring judgement this way will freeze the organizational Taste. I would argue that is unlikely. By transferring Taste, you encourage new employees to learn judgement but combine it with their own perspectives. Good Corporate Taste evolves with new developments, keeping the best of the old and adding as needed.

Corporate Taste is now a critical asset for business. As a business leader, it is worth your time to create processes that recognize this as a key value, understand how it manifests specifically in your business operations and your domain, and take steps to protect and nurture it.