Artificial Intelligence is a leadership challenge.
The lessons learned from immersion programs in Silicon Valley and from real-world business experience lead us to conclude that the companies that will succeed in the age of artificial intelligence (AI) will not be those with the most advanced algorithms, but those with the strongest leadership alignment and the ability to turn AI into an everyday operational reality.
In the era of artificial intelligence, leadership no longer consists of having all the answers. It consists of building organizations that learn and generate business value with AI faster than the competition.
The biggest misconception an executive can have is to think that AI is a technical challenge. It isn’t. It’s a leadership challenge.
1. The core of leadership in the age of AI.
The core of leadership in the AI era is the management of the interfaces between human intelligence and artificial intelligence—and the limits of both.
The central role of business leaders is no longer simply to set strategy and allocate resources. In the age of AI, leaders must become architects of augmented organizations and companies where human judgment and artificial intelligence combine to drive better, faster, and more scalable decisions and operations.
Factor 1 | The Potential of AI = The Rise and Fall of Leaders and Companies
Major technological shifts have defined the rise and fall of companies. The birth of the Internet and mobile technologies, just 40 years ago, turned digital companies into the largest and most powerful in the world. Companies like Alphabet, Amazon, Apple, Meta, and Microsoft have achieved market capitalizations in the tens of billions of dollars.
Similarly, AI will determine the rapid rise and fall of businesses, companies, and leaders at all levels.
However, the speed at which AI is developing calls into question the ability of organizations, and the business world in particular, to adapt in a timely manner. The changes in the business world will be more profound and much faster than in previous technological transitions. The effect of Schumpeter’s creative destruction will be far stronger.
Leaders who master AI will quickly replace those who do not.
Factor 2 | AI will have a much greater impact than today's leaders imagine.
AI will impact the world more rapidly and more profoundly than any previous technological revolution because:
- it is the first technology that learns on its own, improving at an exponential rate,
- it accelerates other technologies in a synergistic way. The investments made by key players are unprecedented.
Computing power has increased 214-fold in 6 years, and its cost is falling rapidly.
The cost of intelligence is falling rapidly and becoming more accessible
AI is in its infancy. What we will see in the future is far more advanced than what we are witnessing now. The current wave of generative intelligence, which surprises us every week, will be followed by a wave of widespread commercialization of humanoids and physical AI.
The development and application of Artificial Intelligence will lead to a reshaping of our society. The impacts that will occur, both positive and negative, are far greater than what leaders and society currently imagine.
The greater the impact, the greater the need for leadership.
Factor 3 | Discernment is the new scarce resource
In the industrial age, scarce resources were physical assets and production capacity. In the digital age, scarce resources were software, data, and the speed of replication. In the age of AI, the scarce resource is discernment. Artificial intelligence is producing results at a speed faster than human intelligence can validate on its own. The capacity for judgment is scarce.
As a result, most people who use AI are making mistakes more quickly.
Unsustainable experimentation and “sloppy AI” are proliferating in companies.
People are producing more at a faster pace, reaching conclusions that have never been thoroughly examined. In most cases, humans aren’t making a decision. They’re rubber-stamping an algorithmic result under time pressure and with incomplete information. They’re putting a human signature on it without giving it much thought.
With digital applications, performance variation among users wasn’t significant. With artificial intelligence applications, the performance variation resulting from a single application is enormous. If we apply trivial or average thinking to a model, we’ll get trivial or average thinking at scale. If we apply structured and advanced thinking to a model, we’ll get advanced thinking at scale.
2. Business leaders in the age of AI: from decision-makers to systems designers
Traditionally, leaders were valued for making high-quality decisions and guiding people in a certain direction.
In the age of AI, a leader’s success and impact depend on designing systems that consistently make good decisions
Leaders need to redesign how decisions are made, who makes them, and what data drives them, combining ethics and human aspirations with intelligent systems.
Disruptive and sustainable competitive value exists only when leaders ensure that data flows, feedback loops, and algorithms are aligned with business objectives, updating the operational model and people’s roles within the company.
The focus shifts from “command” to “context”.
The main challenge is who makes the decisions and maintains control.
3. Four new leadership skills are becoming essential.
i) AI literacy (not expertise) and strategic capacity
Leaders don’t need to code, but they must understand what AI can and cannot do. This includes understanding the strategic and operational potential within their business and the risks of AI, as well as concepts such as model bias, data quality, and the limits of automation. Without this, they cannot ask the right questions—nor challenge the wrong answers.
ii) Decision architecture
The key question is no longer “What decision should I make?” but rather “How should this decision be made going forward?” Leaders must encourage data-driven decisions and identify which decisions and operations can be automated, improved, or should continue to be led by humans, and redesign processes and responsibilities accordingly. The deployment of agents granted with autonomous powers to learn, plan, decide, and act makes this capability even more urgent. The ability to build safeguards for the behavior of powerful autonomous models is critical.
iii) Orchestrating change at scale
The productive adoption of AI has less to do with tools and more to do with behavior. Resistance will not come from technology, but from people. Leaders must train and mobilize middle managers for AI, as they are best positioned to bridge the gap between business understanding and operational implementation. Actively promote training and self-directed learning in AI, a culture open to AI, and the creation of multidisciplinary teams
iv) Governance, ethics and transparency
The risks of AI increase with its development and widespread adoption in society. Additionally, deepfakes are becoming increasingly sophisticated. Cybersecurity risks are on the rise, especially those related to personal data and distortions in perceptions of people. Therefore, establishing appropriate governance for AI systems is essential.
AI excels in speed, scalability, memory, and prediction, but it lacks empathy unless this is built into the model. Leaders in the AI era must be protectors and promoters of human and ethical values, ensuring the necessary empathy for people’s concerns and aspirations.
It is increasingly difficult to discern what is produced by people and what is produced by artificial intelligence applications. Transparency is essential to building trust and acceptance of augmented production.
Artificial intelligence doesn’t lead. People lead.
Leaders must build augmented organizations aimed at exponential value creation through the power of AI, but where AI is the assistant and people are in control.
Carlos Valleré Oliveira is the founder and CEO of LBC – Intelligent Transformation, with over 1.200 projects in 18 countries, and strategic coordinator of the GSI AI Frontier executive immersion program in Silicon Valley. He holds an MBA from the New University of Lisbon and has completed AI courses at the Berkeley Haas School of Business and Imperial College London.
LBC is an international strategic consulting and digital transformation firm with experience in 18 countries and an innovation lab in Silicon Valley.
LBC can provide guidance to executives challenged by the pace of rapid transformation and support the implementation of digital transformation.
Please contact us at info@lbc-global.com for assistance.
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