Analysts and researchers have studied the impact of artificial intelligence (AI) on industries and economies, but few have focused on how AI will impact leadership. This provides a new opportunity for us to explore this area in more detail, addressing the appetite of leaders who want to learn more about the impact that AI can have on their roles.
We know that without the right leadership, businesses can falter and fail. Studying the relationship between AI and leadership could reveal vital information to help companies progress on their AI journey. With these questions in mind, we embarked on a new piece of research with Susan Etlinger, AI analyst with the Altimeter Group, and Heike Bruch, Professor of Leadership at the University of St. Gallen.
The research saw 800 leaders across seven European countries (France, Germany, Italy, Netherlands, Russia, Switzerland, UK) and the United States share how they personally plan to use AI, and their thoughts on how successful leadership changes as businesses use more AI.
The key findings are presented below, and our EMEA President Michel van der Bel has also written about his own personal insights gleaned from the research, from his perspective as a leader. We would also love to continue the conversation with you, and hear your perspectives on @MSEurope.
Investing in people
One of the major findings of the study shows that as AI becomes more prevalent in a company, motivating and investing in employees became the top time investment priority for leaders. These results suggest that leaders recognise the impact that uniquely human qualities have on the success of a company.
Creative problem-solving, empathy, building trust and personality are just some of the human factors that are invaluable to the success of a business – especially one that is in the process of change and transformation.
Michel van der Bel, President, Microsoft EMEA believes that “As AI helps leaders tackle operational tasks more effectively, they can better shift their focus on empowering their people. This means trusting people to approach challenges in their own way and ensuring they are equipped to be at their best. In short, leaders can more effectively shift from being managers to mobilizers.” In this way, AI can be seen as a strategic boardroom tool, allowing leaders to reinvest more time in their people.
Heike Bruch, Professor and Director of the Institute for Leadership & Human Resources Management at the University of St. Gallen believes that “Successful leaders use AI for operational tasks but also to become more effective leaders – in other words, drive growth, set the right priorities and free time for inspiring people. It is interesting to see leaders wanting to put more energy on engaging and inspiring people as AI becomes more prevalent. In this way, I actually think AI will make good leaders less busy and even more human.”
We have seen that AI can help leaders invest time into the growth of their employees, but it is also important to note how leaders can actively use AI to augment their own skills.
The results show that nearly half of successful leaders – namely, those at companies that have seen double-digit growth – are embracing AI to help with direction-setting, such as creating a vision or setting a strategy. In comparison, the results show only around 36% of low-growth leaders believe the same.
The study also shows that the majority of successful leaders from high-growth companies are looking to change their skill emphasis in the age of AI, allowing them to focus on more core leadership objectives, such as strategy, goals, and new market opportunities – all things that can happen only through human ingenuity. This suggests that leaders recognise that the way in which they approach their jobs will change, and that they welcome support in refining their leadership skills.
The race is on
The survey results show that high-growth companies are not only more than twice as likely to actively use AI compared to lower growth companies, but they also have bigger plans in a much shorter timeframe. Of the double-digit growth companies surveyed, while almost all (94%) intend to use in AI for decision making within the next three years, more than half plan to do so over the next 12 months. In comparison, the majority of low-growth companies are only looking to invest in decision-making AI in the next three to five years.
“What’s striking about the research is the difference between double-digit growth companies and those with lower growth,” says Susan Etlinger, Industry analyst with the Altimeter Group. “Double-digit growth companies are further along in their AI deployments, but also see a greater urgency in using more AI. They are looking at a one to three year timeframe – often really focused on the coming year. Lower growth companies are looking at more of a 5-year timeframe. What this says to me is that the more you know, the higher your sense of urgency is.”
Crucially, it’s not too late for those companies and leaders who are further behind in their AI journeys to start now, to increase their chances of remaining competitive.
Start small, learn fast and scale
The research findings have shown that AI is successfully utilised by leaders to invest more time in humans, while helping them create and execute new strategies. In addition, we have seen how leaders value AI’s ability to help them grow their own skills.
Evidence showing that the fastest-growing companies have invested – and will continue to invest – in AI also highlights the importance of ensuring that business, inspired by their leadership, progress on their AI journey sooner, rather than later, before they run the risk of losing their competitive edge to more progressive companies.
In Microsoft EMEA President Michel van der Bel’s words: “Start small, but start with intention. This will help teams build trust, learn from feedback and build confidence. In a nutshell, this is what will help get your AI journey off with a strong start.” Progress today, and reap the benefits for both yourself as a leader, and your company as a whole, tomorrow.
For more information on progressing your AI journey, please feel free to visit our AI business resources.
Key research findings
Note: High growth companies are companies that expect relative organic revenue growth in the double digits.
Leaders of high-growth companies feel a sense of urgency to use more AI to not only drive efficiencies, but growth too:
- 93% of high-growth companies intend to invest in decision-making AI in 1-3 years, 53% of which expect to do so in the next 12 months, as compared to 33% of lower growth companies
- 64% of lower-growth companies intend to invest in decision-making AI in 3-5 years
As AI becomes more widely used, leaders will invest more time in:
- Motivating and inspiring employees
- Identifying new market opportunities
- Setting the right goals
Leaders would like support to change their skill emphasis so that they’re better prepared for the age of AI
- 76% of leaders from high-growth companies would like support, whereas 67% of lower-growth leaders would like support
Decision makers believe AI will have a positive impact on leadership
- Among high growth leaders, 66% say that AI will have a positive impact on leadership, with 8% saying there has already been a positive impact
- 64% of lower growth company leaders expect the same, with 3% saying AI has already had a positive impact
Top three areas where high-growth companies expect to use more AI in the coming year:
- Decision-making: 53% (33% for lower growth)
- Optimizing processes: 43% (34% for lower growth)
- Developing new products and services: 28% (27% for lower growth)
Key challenges that leaders see, related to AI:
- Adapting rapidly to new and changing market environments (47%)
- Promoting a culture for humans to thrive off AI (41%)
- Developing ideas for how AI can help add value to customer solutions (40%)