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Leaders Feel Prepared to Deal with Technological Changes, with 65% Experimenting with Tools, but It’s Important to Pay Attention to Culture and Risks for More Effective Results
São Paulo, April 2024 – 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 require 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 essential to develop a technological mindset for effective implementation of digital solutions, to fully leverage business opportunities, and to enhance cybersecurity. Furthermore, according to the Global Leadership Monitor survey, also conducted by the consultancy, 65% of surveyed leaders 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 for executives to understand the potential of AIs and to know how to implement them in a balanced way in business. In addition to the risks associated with cybersecurity, it’s necessary to assess whether the company has the right talents to lead the journey, whether it is legally supported for the use of new technologies, and whether there is alignment and engagement of 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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Russell Reynolds’ studies reveal executives’ perceptions about the maturity of their companies concerning GenAI and point out 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 established Technology positions like CIO, CTO, or CDO. Regardless of the approach, it is essential to evaluate whether the company has available talents or the capacity to attract them, 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 skills to implement the technology in their organization.
Corporate Culture: technology-oriented companies foster a culture of innovation and transformation, establishing a mindset of testing and learning so that their leaders can productively question the status quo and take risks to gain a competitive advantage. At the same time, it is necessary to adopt a more deliberate approach to integrating AI into existing processes, for greater team engagement 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 necessary functions 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 created specific roles for new technologies below the C-level, and 21% indicated that a Chief Artificial Intelligence Officer (CAIO) was appointed. Additionally, GenAI allows executives to direct their efforts towards more strategic areas and higher-impact tasks for the business, enabling talent redistribution and sector integration.
Commercial Strategies: Developing complex reports, profiling clients for personalized service and offering services, identifying trends, and developing new products. The possibilities for using GenAI are as numerous as the volume of data it can analyze, hence the importance of all leadership’s understanding of the technology and their curiosity about the potential revenue streams that their area can generate.
Risk Management: It is also necessary to consider the ethical implications of the tools, building systems that consider the organization’s purpose and values and have clear guidelines for the use of GenAI. Among leaders who have already implemented or are studying the new technology, 48% prioritize an approach that includes an analysis of legal risks and 41% that establishes internal policies.
To better leverage the potential of GenAI, organizations need first to understand their digital capabilities and assess their level of comfort with the risks associated with the technology. From there, it is possible to make decisions on how and where it will be implemented and develop a strategic roadmap tailored to their needs, values, and goals.
Technical Specifications: The Global Leadership Monitor 2023 survey was conducted with over 2,500 executives from 46 countries in Africa, Asia, the Americas, Europe, Oceania, and the Middle East. Technological changes are identified as the third largest threat to business by 51% of leaders, behind talent shortages and economic uncertainty, both indicated by 68% of respondents.
About Russell Reynolds Associates
Russell Reynolds Associates is a global company specialized in search, consulting, and leadership development. Its more than 600 consultants in 47 offices work with private, public, and non-profit organizations across all sectors and regions. Russell Reynolds supports clients in building transformational leadership teams that can face today’s challenges and anticipate the digital, economic, sustainability, and policy trends that are 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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