AI and digital leadership must start with overcoming skills gap and cultural challenges

New IMI research highlights leadership challenges around AI

The biggest enabler of project success was not the technology itself, but the organisational and leadership structures. Picture. iStock

Although it is common for business leaders to take inspiration from successful sports coaches, former Arsenal manager Arsène Wenger — himself a regular speaker on the corporate circuit — believes lessons from sport aren’t easily transferable to most organisations.

“Players have to be as close as possible to 100% of their potential to be efficient,” Wenger is quoted as saying. “That is not the case in daily life.” 

Certainly, the role of talent separates sports teams from banks, or law firms, or even startups. Not least because the hierarchy of compensation is flipped, with many players earning in a week what their coach earns in a month, or what the club directors earn in a year. But Wenger is getting at something deeper, a point taken up by Financial Times journalist Simon Kuper.

“Sport isn’t a useful model for business,” Kuper writes. “Corporations are based on the concept of replaceability. [Employees] don’t need to be highly talented. They just need to be good enough. 

A corporation succeeds thanks to efficient processes, not extraordinary talent. In most jobs, creativity and extraordinary talent only cause trouble.” 

Interestingly, Kuper’s emphasis on process and replaceability chimes with common fears around AI and automation, with many digital transformation initiatives encountering resistance and scepticism from employees fearing job displacement — often justified. 

Irish workers at risk

By 2030, management consultancy firm McKinsey predicts automation will impact at least 375 million jobs worldwide, while the recent OECD Skills Strategy Report notes Irish workers are at risk of falling behind as workplaces and technology evolve faster than skills and capabilities.

If we accept Kuper’s version of a corporation, surely more AI and automation will lead to increased organisational downsizing and even less emphasis on creativity and extraordinary talent.

Thankfully no. Or at least, not entirely. While the process-over-people organisation Kuper describes may have been common in the past — and still exists to an extent — IMI research shows top organisations have never been more committed to their people, with AI and automation an enhancer of their creativity rather than a replacement.

After studying the digital transformation efforts of multiple organisations, IMI found the biggest enabler of project success was not the technology itself, but the organisational and leadership structures. 

Empowered by supportive leadership, agile and cross-functional teams utilised cutting-edge project management techniques to test and iterate in an environment of psychological safety, with creativity and innovation at the forefront. 

Emphasis on continuous learning

The most successful teams were not necessarily AI or technology experts, but their organisations placed a strong emphasis on continuous learning and upskilling, allowing them to adapt more easily to new technology and ways of working. 

Crucially, rather than being processed-obsessed, these teams were output-orientated, customer-centric focused on high performance. Tony Moroney, programme director for IMI’s digital leadership diploma and AI for C-Suite programme, believes the biggest challenge to be overcome when it comes to technology and digital is mindset. 

When people hear digital transformation they tend to focus on the digital side rather than the transformation side, when really it’s just using digital tools to deliver this transformation and provide a better experience for customers. 

"But it’s vital to look at digital transformation as a strategic imperative, and not just as a technology project.” 

Recall the words of Colonel John Boyd, the US Air Force pilot and military strategist, who would routinely bark: “People, ideas, machines — in that order!” Boyd believed project success with technology came from the intersection between people and technology, and the ideas of those people, not from the technology itself. In other words, instilling a culture of innovation.

New opportunities and challenges

However, fostering that environment is not easy. The business landscape is being reshaped by automation and AI in unprecedented ways. This brings forth new opportunities and challenges for leaders, who are tasked with driving their organisations through technological adoption while meeting the changing needs of an evolving workforce. 

Organisations must shift from technology infrastructure investment to value realisation, but these opportunities can only be realised when the cultural and organisational challenges are met.

For example, a recent Microsoft survey noted over half of Irish workers feel their leadership team is out of touch and that workplace culture has deteriorated in the hybrid environment. Burnout, not enough focus time, and too many tasks and meetings were also cited as challenges. 

On the flipside, a recent Deloitte survey noted C-suite leaders found the main obstacle hindering their organisation’s progress towards digital transformation was lack of workforce skills and capabilities, followed by mindset and cultural shift.

In terms of overcoming these challenges, the adoption of digital solutions like AI should help organisation address the productivity pressure points mentioned above, reduce risk of employee burnout and improve the employee experience. 

Crucially, leaders must encourage a culture of continuous learning and experimentation, where employees are empowered to embrace change and adapt to emerging tools and trends, along with equipping the workforce with new skills and capabilities. Otherwise, workers may get left behind, as the OECD recently warned.

While technology should be used to increase productivity rather than a means to replace people, technology can and often does replace people — this is the history of automation. Thus upskilling and lifelong learning initiatives are so vital: empowering and increasing the capabilities of a hugely diverse group of workers, including leaders themselves. 

Jobs threat

Because automation and AI threaten jobs higher up the food chain than ever before, leaders are also at risk of being left behind, unless they equip themselves and their teams with the necessary skills and capabilities to navigate the rapidly evolving landscape. 

The demand for a better understanding of these implications has led IMI to create their AI for C-suite half-day programme, featuring immersive workshops providing scenarios where senior leaders will work through the implications and challenges of embedding AI into their businesses. 

The need for programmes such as these is especially crucial, considering the growing divide between workers and leaders in many organisations and the unprecedented complexity we face.

AI is likely to be the defining technology of our time, with the potential to free us from digital debt, fuel innovation and transform how organisations operate and interact with their employees. Rather than diminishing creativity and extraordinary talent, quite the opposite effect occurs. Freed from process obsession, workers can finally perform to the standard of high-level footballers.

At least in theory.

• Ben Davern leads research and insights with IMI