Leadership remains a key enabler of the AI transformation of companies. Maria Caruso, Winner of the 2024 CoBS Student CSR Article Competition at IE Business School, contends that the transformative journey begins with people and existing human practices, even before the technology

Knocking on Our Doors: Leading employees today and tomorrow in the new AI era by Maria Caruso.

Emma is at her desk and she is working on a draft study. She uses a generative artificial intelligence (GenAI) chatbot to get summaries and additional links to websites that will feed into her research. To cut on time-consuming sorting of emails, she also uses AI-driven tools to upgrade her organization and manage the quality and quantity of email responses.

Nowadays this scenario is getting more common for many of us. Undoubtedly, 2023 widely introduced AI, and in particular generative AI and large language models (LLMs) to the world. What started out with playing on ChatGPT, getting travel itineraries or creating images, is now rising questions on the potential to redefine how businesses operate and how to weave this digital companion into the workplace. PwC predicts that AI could contribute up to $15.7 trillion to the global economy in 2030 (PwC, 2017). Research by the World Economic Forum (WEF) also found that LLMs could augment many roles, offering the potential for job growth (WEF, 2024). The penetration of the technology has been too fast to ignore and GenAI is already on the agenda of companies’ boardrooms (McKinsey, 2023).

What this all means is that employees and professionals are adapting and will adapt to new ways of working, and leaders need to ensure they match the speed of progress and provide guidance through the process. As the workforce adapts to the integration of AI, leaders must also adapt their approach to effectively guide their teams through this transition.

In the ever-evolving landscape of work, leaders find themselves at the crossroads of tradition and transformation. How is the advent of AI and GenAI challenging the redefinition of leadership in the digital age? What are some effects on the workplace?

Getting the house in order

In the late 1990s, the advent of the Internet revolutionized the way we live, work, and connect. It became an indispensable tool for communication, information exchange, and global collaboration. Fast forward to the present day, we can expect that AI tools will also be key to thriving as they get more precise and applicable (Cook et al., 2024). GenAI promises to reshape industries, enhance decision-making, and unlock new possibilities.

The challenge does not necessarily stem from the technology itself, rather from incorporating it into work processes, guiding its evolution, and handling its effects (Khan, 2024). Data reveals a positive outlook, yet still met with some degree of uncertainty. According to Randstad’s Workmonitor Pulse Survey (2024), 52% of respondents believe AI will lead to their own career growth and promotion rather than losing their job. However, uncertainty persists.

A YouGov survey (2024) highlights ambivalence: 32% of consumers perceive AI as a booster, while 34% remain unsure about AI’s impact on productivity. Armed with an increasing understanding of the benefits of AI, leaders need to consider how to harness their employees’ distinct abilities and skills, especially as AI tools increasingly enhance individual productivity. After all, humans possess unique qualities, like creativity, empathy, intuition, that AI lacks (Chamorro-Premuzic, 2023). These distinct abilities will remain our competitive edge. Effective leadership involves leveraging AI to augment human potential.

The OECD (2023) sheds light on an encouraging trend: job reorganization outpaces job displacement. Rather than replacing humans outright, AI often reshapes roles, automates repetitive tasks, and frees up cognitive bandwidth. Leaders should view this as an opportunity. They can focus on reskilling, upskilling, and creating hybrid roles that combine human intuition with AI-driven insights. This interconnected ecosystem of humans and AI, requires a strong foundation, where leaders should champion digital literacy and foster adaptability.

In this new era, getting the house in order means more than just tidying up..  In this new era, leaders must champion digital literacy and foster adaptability to ensure that their organizations can effectively leverage the potential of AI. By taking a proactive approach, leaders can capitalize on the business opportunities it presents, while also addressing the potential challenges and risks.

What about skills?

Do we understand the technology or does the technology understand us? Closing the digital divide in the new AI era cannot be neglected, including when applied to the workplace. To work effectively with AI-based technologies, employees need a combination of technical skills and interdisciplinary skills such as critical thinking, creativity, a willingness to learn continuously and the ability to reflect ethically.

At the last WEF meeting in January 2024 in Davos, world leaders have been discussing how to find the talent needed for some of these changing roles (WEF, 2024). Technology literacy is a much growing core skill, and it should arguably be prioritized in organizations’ internal upskilling strategies, motivating employees to embrace change, with the integration of GenAI and LLMs into the workplace.

This means that employees and professionals are adapting and will adapt to new ways of working.  Shepherding this effort can only come from leaders who are willing to invest time, energy and patience to support upskilling their workforces, for example through comprehensive trainings. From the workers’ perspective, a recent Randstad’s recent survey (2024) also showcases that 55% of respondents believe they need learning opportunities to future proof their careers and AI will enhance career growth rather than lead to job loss.

Excitement about AI in the workplace should be on top of mind for leaders and addressing those new skills should be part of organizational strategies. Upskilling isn’t a one-time event, “it is a mindset” (Dennison, 2023). Organizations should foster a culture of continuous learning and cultivate a workforce that embraces the AI’s promise. Whether through workshops, online courses, or mentorship, employees should engage in lifelong learning to stay AI-relevant. So what about skills? Upskilling should not be considered just about acquiring technical skills, yet about cultivating a workforce that embraces AI’s promise. Organizations that invest in skilling their workforce empower their employees to lead confidently in the AI era.

AI in HR

Human resources (HR) remain essential to oversee and coordinate an organization’s workforce. What can AI bring here? The integration of AI in HR can arguably transform the landscape of workforce management. AI’s ability to analyze vast amounts of data can allow HR professionals to gain deeper insights into employee performance, satisfaction, and retention rates. Could this enable more informed decision-making and personalized employee experiences in the future?

Wassan et al. (2021) argue that in HR AI can result in a more streamlined, scalable and user-driven employee interface. For example, AI-powered chatbots serve as 24/7 virtual assistants, addressing employee queries instantly and accurately (Gartner, 2023). Or for onboarding processes of new hires, AI can provide new employees with easy access to necessary information and resources, ensuring a smooth transition into their roles.

Thinking about the workplaces of the future (and present too) AI can empower HR professionals to exceed their traditional roles and become strategic partners in business success, all while enhancing the employees’ experience. While AI can empower HR professionals to exceed their traditional roles and become strategic partners in business success, there are also potential drawbacks to consider. These could include the perpetuation of biases, displacement of employees or the production of inaccurate results (HEC, 2022). It is essential for companies to consider the legal and ethical implications of using AI in HR and to implement measures to mitigate potential risks. By understanding and addressing these potential drawbacks, companies can minimize the risks associated with AI while leveraging time-saving benefits.

How has AI grown my career?

Knock, knock. “Who’s there?” we ask curiously. It’s a paradigm shift. It’s the chatbot that answers queries, the predictive model that forecasts trends, and the digital muse that whispers ideas. Unlike previous technological revolutions, AI has the ability to learn, adapt, and make predictions based on data.  In this dynamic landscape where AI intertwines with our work lives, effective leadership becomes paramount. By better understanding what the technology can do, leaders can assess use cases and benefits, and effectively guide their organizations through this transition. Successful leaders will continue to foster a culture of continuous learning, where employees adapt to AI-driven changes and upskilling become an anthem.

The new AI era demands leaders who navigate uncertainty with agility, inspire innovation, and empower their teams to thrive, building upon what humans already do. In a few years, we will find ourselves asking “How has AI grown my career?” Reflecting on the question, we can envisage employees of the future talking of augmenting productivity and working on data-driven insights provided by AI, embracing the digital transformation to the next level.

Useful links:

• Link up with Maria Caruso on LinkedIn
• Read a related article: People analytics – the risks behind the promises
• Discover IE Business School at IE University, Spain
• Apply for the IE Master’s in Sustainability and Business Transformation.

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