How AI is Changing Leadership

While front-line workers worry about AI replacing their jobs, and knowledge workers enjoy increased productivity, executives may face the most significant disruption of all.

Why it matters: Executives and even middle managers are entering the initial phase of a significant shift in how business is conducted.

  • Instead of continuing to operate in the remnants of the Industrial Revolution, this upcoming evolution is changing the foundational business model.
  • While some may retire as a result, younger leaders will need to adapt to this new normal.

Between the lines: One of the most significant differences is the shift from role-based to skills-based work.

  • Managers will need to focus on leading people through a continuous loop of learning and engaging new skills.
  • Something much different than the hype of employee replacement or the old hierarchy of role and tenure.

Yes, but: Executives must also join the training trajectory.

  • Because what is coming requires all people to learn new skills to remain relevant in the workplace.
  • One where humans and machines work side by side, with executives guiding both to achieve their corporate strategy.

The bottom line: Skills-based work breaks down jobs into their essential skills.

  • Talent is seen as a collection of abilities that can be combined, adapted, and redeployed to meet changing business challenges.
  • Skills function as the currency of opportunity, and career paths become more fluid and personalized, resembling a lattice rather than a ladder.
  • Recent research suggests that skills-based hiring can 10x the talent pool.

Zoom in: Transitioning to a skills-based model offers numerous benefits.

  • It necessitates a fundamental reconfiguration of a company's HR systems and culture.
  • Compensation, time-off, and work schedules must all be adjusted to align with the new model.
  • The biggest challenge is often the software systems used to manage these functions.

What's next: Companies like Unilever, IBM, and Walmart are at the forefront, investing a lot in building skills inventories.

  • They use AI-powered platforms to connect employees with the areas where they are most needed.
  • Similarly, Amazon is also investing significant resources in training employees for the transition toward skills-based work.

The C-Suite: While company leadership will remain essential, it will increasingly rely on AI as an advisor, co-pilot, and assistant to better understand economic trends, customer preferences, and market dynamics.

  • This shift will enable executives to create agile organizations that function more like startups rather than traditional corporations.

Go deeper: To learn more about the evolving role of executives, contact Todd Moses & Co.