The end of classic leadership skills? How AI is transforming management

As the AI revolution continues, every job will see certain tasks enhanced or supported by AI. Leaders must prepare for a transformative impact on leadership skills, organizational structures, and organizational cultures.

What does that mean for leadership skills and organizational structures?

For years, the public debate about AI’s impact on job creation has focused on two opposing views:

1. AI kills jobs; or
2. AI is a net creator of jobs.

Although interesting, this debate evades the obvious point that every job will be AI-supported or AI-enhanced by 2030.

Humans cannot achieve peak productivity without AI. For organizations, productivity boosts will be achieved only through AI-enhanced jobs. Every position—whether accountants, marketers, logistics workers, CEOs, salespeople, or HR compensation specialists—involves tasks that, although now performed by humans, will soon be performed with AI and ML software solutions.

The debate should focus on how AI changes all jobs, not solely on which jobs are eliminated or created.

Every job, and every task that is part of a job, will be AI-enhanced by the end of the 2020s.

Agree so far? OK!

The widespread adoption of AI-enhanced jobs will significantly impact leadership skills, organizational structures, and organizational culture—or, more specifically, what we regard as the critical elements of a successful organizational culture.

Managers must consider how the advent of AI will impact their careers. Let’s start by discussing leadership skills.

AI changes leadership skills

Leadership skills for a successful manager will undergo substantial changes over the next 5-10 years as a result of AI-enhanced jobs (along with other societal and work-related trends). As AI becomes more pervasive, leaders must understand AI not from a data science, mathematical, or programming perspective, but rather from a leadership perspective.

First, managers must consider how to lead organizations in which AI supports all jobs and defines products/services. AI leadership skills will be on par with financial or people-management skills. Every manager will be expected to master AI leadership skills.

Second, managers will need to adapt “classic” leadership skills, such as budgeting or people-management, to meet the new technological environment. AI will change the nature of these skills, likely taking over routine tasks that are today performed by human workers, and may also change the organization’s “clock speed” by enabling classical management activities to be performed continuously rather than periodically. Managers should become comfortable with continuous people-management and continuous budgeting.

Finally, widespread AI adoption will increase the need for emotional intelligence leadership skills. Ethics, integrity, and diversity will become even more important in an AI-pervasive world.

AI impacts organizational structures

Organizational structures will change as new roles emerge and existing roles disappear or morph as a result of AI deployments. Organizations will experience three major shifts:

1. automation
2. new functions
3. cross-functional teams

First, automation will disparately impact areas such as client service as human roles are supplanted by AI. This will create opportunities to change organizational structures.

Second, new teams or functions (e.g. data science groups or data-driven teams) will result in the creation of different functions. Likewise, existing functions will change in structure.

Third, AI environments will allow for greater integration between functions, supporting an agile business trend toward cross-functional teams. AI-enhanced jobs and AI platforms drive opportunities to create new organizational structures.

AI shapes organizational cultures

As AI impacts leadership skills and organizational structures, organizational cultures will also change. Primarily, there will be a renewed focus on the human. AI creates the need for an organizational/leadership culture of empathy, so it is critical that managers display skills like empathy, emotional intelligence, and the ability to put humans at the center of the organization.

CEOs must consider the depth of impact that AI has on their organization. CEOs should also ensure that CHROs (Chief Human Resource Officers) make understanding AI’s impact on all jobs a key part of their leadership development programs, organizational plans, and recruiting strategies (as skills will change rapidly).

Equally, in their own strategic planning, CEOs should make AI a core element of the organization because every job will be AI-enhanced.

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