Three areas of focus in AI for business managers

Over the next ten years, most leaders will likely be in charge of a business area where they are responsible –and potentially can be held directly accountable– for several intelligent algorithms’ performance. Are you and your organization ready for this?

If not, you must start to focus on developing new AI leadership competencies for how you will define business responsibilities in the future, including how you measure performance where AI will have an impact. Let’s explore them one by one:

Leadership skills

Five to ten years from now, a mid-level manager in an average organization will be surrounded by AI assisting the organization they manages. The change in responsibility will require a completely different set of leadership skills of that manager. Changing leadership competencies across an organization is a slow process. It is achieved through focused learning and development, on-the-job situations, and hiring leaders with the desired competencies. On top of that, we are just learning about how AI impacts managers and the organization. Therefore an AI Leadership curriculum and competency details are not fully developed yet. Building AI-capable leadership skills across an organization will take three to five years. As a result, the executive leadership team needs to prepare to transform leadership skills, competencies, and the replacement of some managers who can not transition. This effort needs sponsorship from the CEO, a day-to-day focus of the Chief Human Resource Officer (CHRO), and accountability with all managers to personally engage in their own skills development around AI leadership skills.

Actions

• The CEO to sponsor an AI leadership skills development effort as part of the overall Data & AI effort of the organization.
• The CHRO needs, as part of the leadership development program, to include AI Leadership as a critical leadership competency. Equally, as we advance, establish hiring criteria for managers need to include AI leadership capabilities, or at the minimum, interest is the personal development of leadership skills that are data and AI-focused.
• All managers need to personally take responsibility for developing AI leadership competencies as part of their leadership development interest.

What is business responsibility in an age of pervasive AI?

Today’s managers’ responsibilities are complex. Simply put, these responsibilities are about managing a combination of people, capital resources, processes, customer relationships, and an annual budget. Over the last few years, data & algorithms have become essential elements of a business. Most organizations do not explicitly acknowledge this or have temporarily assigned data and algorithms’ responsibility to Chief Data Officers (CDOs) and data science teams. Coordination of data and algorithms by central roles like CDOs or specific functions will remain important for several years. But, CEOs and public sector leaders need to explicitly recognize data and algorithms as part of all managers’ business responsibilities. Like other resources managed through budgets, objectives, and strategic planning, data and algorithms need to be recognized as essential core elements of any organization. And therefore, they need to be included as part of any manager’s business responsible. All managers have to be accountable for AI.

Actions

• CEOs need to make data and AI a specific component of the business, and all managers responsible for managing data and AI for business outcomes.
• CFOs need to establish strategic financial accountability for data and AI and include this in the planning processes.
• Chief Legal Officer (CLOs) need to ensure that AI governance, ethics, and risk become critical elements of the organization’s legal environment.
• Boards need to include data and AI as critical elements of their strategic oversight.

Measuring business performance that includes AI

Organizations measure all managers against a set of business metrics or KPIs. Depending on the role and the organization they work for, these metrics may vary. The metrics ultimately serve as a measurement of overall business performance and help determine comparative performance between managers. AI will change this. That might not be an issue if it wasn’t because the implementation of AI environments across an organization may vary.

Furthermore, machine learning environments eventually will change the cadence of improvement, accelerating. Both trends result in an improving but uneven performance because AI will accelerate business performance in the areas where it is implemented. The question is whether the executive team and the board will take into consideration AI implementations and their impact on an individual manager’s performance. When KPIs are used to measure a manager’s business performance and compare them against others, then with an uneven implementation of AI, manager-comparisons can be unfair, particularly if there is no consideration for the AI implementation.

Actions

• CEOs & Boards need to pay attention to the positive impact and the potentially negative impact that AI can have on manager performance and their metrics or KPIs.
• CHROs need to consider the uneven business performance-enhancing impact AI can have on cross manager comparisons.
• All managers need to understand that AI, especially the ability to improve algorithms continuously, constitutes a game-changer in their organization’s performance. This is why AI leadership skills are so critical for all managers.

Summary

AI changes what it means to be a manager. It adds new dimensions to what constitutes critical leadership competencies. It redefines what the critical components of business responsibilities are. And it changes the business metrics or KPIs we use in organizations. Everyone should take ownership of their development, particularly skills development that supports the organization’s move to pervasive AI. But CEOs, Chief Human Resources Officers (CHROs), Chief Financial Officers (CFOs), and Chief Legal Officers (CLOs) also have an organizational responsibility to act now.