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Leaders Feel Prepared to Deal with Technological Changes, with 65% Experimenting with Tools, but Attention Must Be Given to Culture and Risks for More Effective Results
As enthusiasm grows around generative artificial intelligence (GenAI), a survey by Russell Reynolds, a global leader in search, consulting, and leadership development, warns about five areas that demand greater attention from executives: culture, leadership, organizational structure, business partnerships, and risk management. The study Navigating the Generative AI Revolution emphasizes that, more than investing in new technologies, it is necessary to develop a technology mindset for the effective implementation of digital solutions, maximize business opportunities, and strengthen cybersecurity. Furthermore, according to the Global Leadership Monitor survey, also conducted by the consultancy, 65% of leaders interviewed stated that they are researching or experimenting with tools, 29% have not yet discussed the topic, and 7% have already implemented some GenAI in their daily routines.
“To face the challenges of this new technological era, it is essential that executives understand the potential of AIs and know how to implement them in a balanced way in business. In addition to the risks associated with cybersecurity, it is necessary to evaluate whether the company has the right talents to lead the journey, whether it is legally supported to use new technologies, and whether there is alignment and engagement from the entire C-level regarding the necessary changes,” explains Tatyana Freitas, head of the Technology and Digital practice at Russell Reynolds Associates.
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The studies by Russell Reynolds reveal executives’ perceptions about their companies’ maturity regarding GenAI and highlight the issues that need to be revisited with greater attention to explore the full potential of the technology more effectively:
Leadership: while some companies choose to create the role of Chief Artificial Intelligence Officer (CAIO), others prefer to incorporate it into already established Technology positions, such as CIO, CTO, or CDO. Regardless of the approach, it is necessary to assess whether the company has talent available or the capability to attract it and whether the entire executive team has a strong understanding of new technologies. About 72% of interviewed leaders agree that a strong understanding of GenAI will be a fundamental skill for future directors. At the same time, only 32% are confident that they have the right competencies to implement the technology in their organization.
Corporate Culture: Technology-oriented companies foster a culture of innovation and transformation, establishing a test-and-learn mindset so that their leaders can productively question the status quo and take risks to gain competitive advantage. At the same time, a more deliberate approach is needed for integrating AI into existing processes to engage teams in finding different ways to implement it in their areas, viewing this technology as a tool that enhances solutions, rather than a potential substitute for human capital.
Organizational Structure: the adoption of GenAI increases the importance of areas such as Information Architecture and Data Science, as well as the ethics to be adopted, among other factors. This requires greater integration of the functions necessary to support its implementation in different areas of the business. In the survey conducted by Russell Reynolds, about 28% of respondents reported that their companies have created specific roles for new technologies below the C-level, and 21% that a Chief Artificial Intelligence Officer (CAIO) has been appointed. Furthermore, GenAI allows executives to direct their efforts toward more strategic areas and tasks with greater impact on the business, enabling talent redistribution and sector integration.
Commercial Strategies: Developing complex reports, profiling customers for personalized service and offering services, identifying trends, developing new products. The possibilities for using GenAI are as numerous as the volume of data it can analyze; hence the importance of the entire leadership’s knowledge of the technology and curiosity about potential revenue streams that their areas can generate.
Risk Management: Furthermore, it is necessary to consider the ethical implications of tools, building systems that take into account the organization’s purpose and values and having clear rules for the use of GenAI. Among the leaders who have already implemented or are studying the new technology, 48% prioritize an approach that includes analyzing legal risks, and 41% that establishes internal policies.
To better leverage the potential of GenAI, organizations first need to understand their digital capabilities and assess their comfort level with the associated risks of the technology. From there, decisions can be made about how and where it will be implemented and to develop a strategic roadmap tailored to their needs, values, and objectives.
Technical Sheet: The Global Leadership Monitor 2023 survey was conducted with over 2,500 executives from 46 countries across Africa, Asia, the Americas, Europe, Oceania, and the Middle East. Technological changes are identified as the third biggest threat to business for 51% of leaders, following talent shortages and economic uncertainty, both cited by 68% of respondents.
About Russell Reynolds Associates
Russell Reynolds Associates is a global firm specializing in search, consulting, and leadership development. Its more than 600 consultants in 47 offices work with private, public, and nonprofit organizations across all sectors and regions. Russell Reynolds supports clients in building teams of transformational leaders who can tackle today’s challenges and anticipate the digital, economic, sustainability, and policy trends reshaping the global business environment. From helping boards with their structure, culture, and effectiveness to identifying, assessing, and defining the best leadership for organizations, Russell Reynolds brings decades of experience to help clients solve their most complex leadership challenges. Russell Reynolds exists to improve how the world is led. More information at www.russellreynolds.com
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