The impact of generative AI on organisational leadership

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In the ever-evolving technology landscape, there is only one thing on everyone’s mind right now: generative AI. As organisations seek innovative solutions to stay ahead of their competition, generative AI is increasingly becoming the technology that can’t be ignored. This article explores how it is reshaping organisations and what this means for senior leaders, offering insights into its rise, challenges, and future implications.

To understand the complexities of generative AI and what it means for senior leaders, we sat down  with Robert Kent, experienced Chief Data Officer, Eddie Short, experienced Digital, Data and Technology Transformation leader, Duncan Stott, experienced Chief Information Officer and Clive White, experienced Chief Technology and Transformation officer.

The rise of generative AI

Firstly, it’s important to recognise the difference between traditional AI and generative AI. According to Forbes, traditional AI focuses on performing a specific task intelligently, and refers to systems designed to respond to a particular set of inputs. These systems can learn from the data and make decisions or predictions based on that data. Good examples of this are recommendation engines on Netflix or Amazon – they are trained to follow specific rules but they don’t create anything new. Generative AI, on the other hand, represents a significant leap forward in machine learning capabilities and can produce content, imitate human behaviours, and innovate autonomously. It is trained on a set of data and learns the underlying patterns to generate new data that mirrors the training set. Probably the most famous example of this is ChatGPT developed by OpenAI. It can create original text that is almost indistinguishable from that written by a human.

As Robert Kent says, “Lots of companies have been using AI for the past 20 years, and longer, but all the hype now is around Gen AI.” Generative AI’s adoption in organisations is skyrocketing, driven by its potential to revolutionise operations and customer experiences. According to a recent BIE Transformational Leadership survey that went out to 822 senior leaders across the UK, 78% of them agree that AI will play a significant role in their organisation’s success in the next five years. Furthermore, over 50% plan to implement AI transformation programs within the same timeframe.

These statistics are unsurprising given the huge opportunities presented by generative AI. Eddie Short summarised the potential well when he stated “This is more transformative than everything that’s come before it put together.”

All the experts we spoke to highlighted productivity and efficiency as key areas where generative AI will bring opportunities. “Everyone’s productivity should increase because they use AI. For example, using generative AI for onboarding will allow new starters to find any information they need to enable rapid learning.” says Duncan Stott. Although Robert Kent warns that things are developing so quickly that “this is almost table stakes. If you’re not looking at productivity and efficiency opportunities, then you’re lagging behind.”

Eddie Short suggests that in certain instances, using generative AI is just the next evolution of improving effectiveness and efficiency, “There is a big opportunity with contact centres. From a UK lens we’ve already de-humanised contact centres by offshoring them. Long waiting times are the norm not the exception. You could improve the customer experience by creating an AI solution that understands the answers to any questions that would be asked, then have a premium ‘human in the loop’ service for human-to-human interaction.”

It’s clear that organisations should already be looking to identify ways they can use generative AI to drive efficiencies and productivity. However, senior leaders need to be aware of the impact this might have on both their customer and employee experience and ensure that they’re managing any risks.

Managing the risks and identifying a business case

Despite its promises, generative AI presents challenges for senior leaders. According to the BIE survey, 49% of leaders rank cybersecurity as a top challenge presently and 43% see it continuing to be a top challenge in the next five years. Additionally, 37% consider technology change a significant hurdle right now, which rises to 40% when looking at the next five years.

Clive White cautiously points out, “The AI gold rush is underway, but we should not be letting go of controls and disciplines in deploying new tech. Although developing at an incredible pace, it is still a new technology and businesses still need to consider good business practices of risk management, cyber security and data management and control.” This is echoed by Robert Kent, “Governance, privacy and accountability issues will be challenges organisations face. Most organisations are in the testing phase right now because of this.”

Another risk flagged by the experts we spoke to was trying to go too fast too soon, getting carried away with the potential cost savings and losing the human aspect of your organisation. “A big risk is that you try to get rid of too many people and de-humanise your organisation.” says Eddie Short.

There is a recognition that human input is extremely important for the success of any AI transformation as generative AI is far from perfect in it’s current form. Eddie continued “Having a ‘Human in the loop’ is an important thing. Generative AI does have hallucinations so you need humans involved to give people confidence.” Duncan Stott emphasised the need to balance educating people across the business, while also placing trust in them to use generative AI and deal with these hallucinations, “A risk is the information that AI provides isn’t correct. Leaders need to trust staff to make a judgement but there needs to be education that human input is important.”

Ultimately, the biggest risk of wasted resources is that organisations are using AI without any purpose. Senior leaders need to be clear on what they are using AI for, and have a strong position on determining what the business case for it is. As Robert Kent stated, “The big risk is that generative AI is a solution looking for a problem. Organisations have to make sure that their needs can’t be met in another way.”

The need for upskilling senior leaders and determining who leads the transformation

With generative AI developing at such a rapid pace, it is no surprise that senior leaders are looking at themselves and their peers with regards to the skills they are going to need now and in the future to maximise the opportunities AI presents. This is reflected in the results from our recent survey where 29% of leaders viewed digital skills and understanding as essential for C-suite leaders right now, with this figure rising to 39% of leaders seeing it as a critical skill that will be required over the next five years.

“Boards and Executive Committees have to take a hard, candid look at their own skills and experience around the table in terms of understanding, managing and leveraging technology including AI. I would advocate not waiting for the significant event or burning platform to arrive before putting tech, AI and innovation routinely on the Board agenda.” says Clive White.

It is clear that a major challenge facing senior leadership teams is the lack of experience and understanding when it comes to these technologies. Eddie Short explains “The Board should guide the CEO, but lots of Boards don’t have any relevant experience when it comes to AI.”

As a first step, senior leaders need to have the right mindset, opening themselves up to the opportunities that generative AI presents, and have a clear picture of how it is being utilised in their market. “C-suite leaders need to understand the power of the opportunity, what the risks are and how their competitors are using it. The biggest thing leaders need to adopt is the right attitude, making sure they are opening doors rather than putting up blockers.” says Robert Kent.

However, being clear on who the C-suite needs to ‘open the doors’ to is complicated, given that generative AI is an emerging technology that impacts almost everyone in an organisation. How transformation leaders and technology leaders work together on this could determine the speed and success of an organisations AI transformation.

Eddie Short stresses the need for experience and expertise from a transformation office to guide the organisation and C-suite through this change, “An experienced Chief Transformation Officer is needed to lead this change, with their transformation office focused on the employment and exploitation of this technology. They will need a supplier, which could be external or internal, to help them build the technology. If internal, then this could be the CTO or CIO, who would effectively report into the transformation office on this project.”

Clive White argues that the CIO or CTO should be the key figure to lead this change in an organisation, “Now more than any period before it, is when a CIO or CTO has to be brought into the Board construct. They need to be able to define, identify and work with other functions to recruit, train and re-train talent for an AI world.” This is echoed by Duncan Stott “There’s a natural opportunity for CIO’s to take a leadership role and enable it. They can co-ordinate across the business, provide strong project management, and demonstrate use cases.”

What is agreed upon by all the experts we spoke to is that this is a transformation programme and not a technology programme. Robert Kent suggests that as organisations will go through different stages of maturity the leadership of the project may shift or be shared, “If you’re early in the process then you probably need a single person to focus on it. Once it reaches a certain point of maturity it becomes very difficult to have a single person. Part of the outcome is to spread the ownership across the organisation so that heads of departments ultimately lead it within their vertical.”

The future of generative AI in organisations

What is clear is that AI is very much here to stay, and organisations need to be considering and trialling it now so that they don’t fall behind their competition.

Given the enormity of this technology and the vast amounts of opportunities it brings, it can be challenging for leaders to know where to start. The experts we spoke to strongly advocated that starting now, however small, is critical. “Organisations should start with the low hanging fruit and then grow from there. The most straight forward use cases are productivity and doing things more efficiently, you could quite quickly prove the business case for this.” says Robert Kent.

Duncan Stott added to this, suggesting that having a specific outcome in mind would accelerate the transformation across an organisation, “If you have an issue that you’re looking to solve then this will massively drive the adoption of AI. Try to be really focused.”

This adoption at pace will be key for organisations as they look to gain a competitive advantage and innovate across their organisation. Eddie short believes that “in the next two years organisations need to have made strong inroads”, also agreeing with Robert and Duncan’s point that “it has to be driven by business needs.” Clive White also makes the case for organisations truly understanding what they are trying to solve before experimenting with generative AI, “Organisations need to understand how they can make it work best for them, and not just follow whatever the latest trend is.”

Another way to drive engagement across an organisation is to use the enthusiasm and passion of their employees who may already be using generative AI in their everyday lives. Robert Kent notes that “60-70% of Gen Z are already using it day to day. If you can harvest that excitement, then there’s a big opportunity.” Making sure that this isn’t just a leadership initiative is critical, involving employees in the transformation will help to drive the pace and success of it.

If organisations can get this right, then it could be truly transformational for their future performance. In a bold prediction, Eddie Short suggests “AI has the potential to be the last transformation organisations will need to do. The engine is constantly refreshing itself and you can plug and play with other technologies. Instead of changing your business in years, you can change your business in a matter of weeks and months.” Clive White adds to this, suggesting that the landscape of business is changing dramatically, at a scale we haven’t seen before, “It’s not just AI but the combination of AI with other digital capabilities which present each organisation the opportunity to reinvent significant parts of their business model. We are only scratching the surface of what AI can achieve. Most organisations will look very different in 10 years, shaped by technology and AI.”

In summary

Generative AI represents a paradigm shift in how organisations will operate, offering unprecedented opportunities for innovation and growth. However, senior leaders need to recognise the risks this also brings, while being aware of the skills and knowledge gaps, not only across their organisation, but also specifically within the Board and Executive Committee.

By embracing generative AI, adopting the right mindset, and fostering a culture of continuous learning, organisations can position themselves for success in an increasingly AI-driven world. Doing nothing would be the worst thing for leaders to do right now, as Robert Kent says “Pandora’s box is open. AI is here to stay.”

Written by

Cyr Cornberg

Cyr is a Senior Director within the IT & Technology Leadership Practice at BIE. He has over 26 years’ experience focusing on interim hires within the IT & Technology market.

Cyr has an exceptionally strong network built over the past 26 years, which includes Strategy, Architecture, Programme Management and Technology Leadership.

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