Artificial intelligence (AI) presents new challenges to leadership and profoundly changes the way companies are managed. But, according to the latest PwC 2022 AI Business Survey, companies leading in AI implementation are seeing a “significant” return on investment (ROI). The PwC report also revealed that a holistic approach to AI implementation is a common factor among companies succeeding in the AI space. According to the authors (PwC’s global AI lead Anand Rao and data and analytics partner Brett Greenstein), leaders in AI tackled three areas at once: system modernization, business transformation, and enhanced decision-making. The impact of AI on leadership can be seen in leaders having to adopt a unified approach of collaboration and data sharing between internal experts from across the company, as well as uniting all employees behind a comprehensive vision.
The importance of corporate culture in the age of AI
When it comes to successful AI deployment and adoption, the importance of leadership and culture cannot be overstated. Deloitte’s State of AI in the Enterprise, 5th Edition survey found that 94% of business leaders reported that AI is critical to success over the next five years. But while some employees and managers are excited about AI’s potential to revolutionize products, business models, operations, and markets, others are wary or reluctant to commit to fully implement AI. Leaders need to find and communicate a balance between opportunity and risk, develop a comprehensive vision, and intertwine business strategy with technological strategy. Crucially, creating a corporate culture that instills common goals, norms, and values can help overcome barriers that may hinder the implementation of AI.
The same Deloitte report explores four key actions many business leaders can take to harness AI’s potential and realize value across their enterprises. One of these actions is investing in culture and leadership. This refers to the need for leaders to reinvent the workplace culture in a way that capitalizes on people’s growing optimism for AI’s potential and ultimately helps unleash the power of a combined human and machine workforce.
High cross-organizational collaboration
Today’s leaders need to make decisions that drive digital (including AI) strategy, which will likely necessitate a change in existing organizational structure to incorporate emerging roles such as chief data officer (CDO) or chief AI officer (CAIO). To realize the immense opportunities of a digital-first organization, AI and automation technologies need to become an available competency across all departments, with analysts and engineers working closely with all business roles and departments to optimize AI across the enterprise. All employees will need to adopt a digital mindset as companies dive deeper into leveraging AI and other technologies. To enable this cross-organization collaboration, leaders need to restructure people, products, and processes for an AI-first approach.
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Thoughtful change management
PwC’s 25th Global CEO Survey found that AI risks and opportunities are a key focus for top executives, with 85% of CEOs agreeing that AI will significantly change the way they do business in the next five years. There is thus a clear need for leaders to anticipate and respond to change by reviewing internal AI practices, asking the right questions, adopting ethics policies, and taking the necessary steps to tackle other potential risks.
Deloitte’s survey also revealed the most important factors in the development of an AI-ready culture, namely:
- Agility and willingness to change (42% of respondents found this “extremely important”)
- Executive leadership supporting a vision for how AI will be used (40%)
For leaders, these results reinforce how thoughtful change management is a foundational element of successful AI execution. In fact, high-outcome organizations were over 55% more likely to invest in change management than low-outcome organizations.
Equipping leaders with the empathy they need to lead
From enhancing corporate culture to cross-organizational collaboration and thoughtful change management, there’s an important competency that leaders need to deliver on these objectives, and it’s one that isn’t often discussed alongside AI—that’s emotional intelligence.
Emotionally intelligent leaders can never be replaced by an algorithm, and we need them more than ever to guide companies through effective and ethical adoption of AI. Leaders who show emotional intelligence are more likely to gain the trust of their employees. And when an organization is undergoing a period of change (such as the rollout of AI), an environment of trust helps people feel safe and confident while making the transition.
The good news is that emotional intelligence can be trained. At Blueline, we use highly contextual scenario simulations to emulate real-world challenges. With no clear right or wrong answers, these dilemmas give leaders a chance to safely “play in the gray” and experiment with complex decisions. Our training simulations are designed to help your leaders develop the skills they need to help their companies thrive in the AI era. Contact us today to learn more or schedule a private demonstration for your business.