Are Leaders ready for the AI age?
Are leaders ready for the AI age?
The age of artificial intelligence (AI) has dawned, and it has done so with breathtaking speed. AI models are demonstrating new capabilities on an almost daily basis, to the point where the question is no longer what AI can do, but rather what it can’t. This monumental shift could change the way people work, learn, and communicate, and it has the potential to shake up entire industries. Despite, or perhaps because of, the endless opportunities AI promises, anxiety over the disruptive role it could play is running high. One thing is certain: ensuring that your organization is prepared for the new era of AI is no longer optional.
Today’s leaders will need to be able to craft a vision for their organizations that capitalizes on AI opportunities while navigating any potential disruption. Are they ready to rise to the challenge?
To answer this question, Kearney partnered with Egon Zehnder to explore the perspectives of 100 executives across four countries and six sectors1 on the implications of an AI-driven future. Our findings provide insights into how executives anticipate AI will impact organizations and jobs—and how prepared they feel for this monumental change.
Executives believe that, even if their individual roles remain more or less the same, big change is on the horizon for their organizations
Business leaders expect AI2 to be a major disruptive force in the near term, with 70 percent of respondents agreeing that AI will disrupt their organization within the next five years.
When it comes to their own role, however, fewer executives expect the same sort of disruption. Only 43 percent agree that AI will disrupt their role and leadership in the next five years, while two-thirds expect no disruption.
AI will disrupt my role and my leadership in my organization within the next 5 years.
AI will disrupt my organization within the next 5 years. (% of participants)
43
70
21
9
36
21
Agree
Neither agree nor disagree
Disagree
Role
Organization
Note: Percentages may not resolve due to rounding.
Sources: Kearney and Egon Zehnder analysis
Attitudes toward AI are positive: leaders see it as an opportunity more than a risk
Despite the expected disruption, executives are keenly aware of the opportunities that AI could present. More than 90 percent agree that AI represents an opportunity for them in their roles, rather than a risk. Leaders are also confident that AI represents an opportunity for their organization, with 85 percent seeing AI as an opportunity to improve their organization’s capabilities. The major opportunity identified by the respondents, both for their role and for the organization as a whole, is the increased efficiency that the effective use of AI could bring—around three quarters identified this as an opportunity for their roles, with a similar number identifying it as an opportunity for their organization. Other AI opportunities that executives identified included more effective decision making, improved risk management, and creating innovative products and services.
Leaders believe their organizations are unprepared for the shift
So do executives feel that they, and their organizations, are ready to navigate the disruptions of AI while seizing the opportunities? Of the leaders surveyed, only 20 percent agree that their organization has the necessary capabilities to deal with the expected disruption of AI in the next five years. In general, executives see themselves as better prepared to deal with the disruption than their organization, but still only 41 percent agree that they have the necessary capabilities in their role to do so.
Executives who expect their organization to be disrupted report worse preparation for expected disruption (% of participants)
Note: Percentages may not resolve due to rounding.
Sources: Kearney and Egon Zehnder analysis
Executives who expect their role to be disrupted report worse preparation for expected disruption (% of participants)
Note: Percentages may not resolve due to rounding.
Sources: Kearney and Egon Zehnder analysis
Leaders’ understanding of AI is an essential element of feeling prepared
Those leaders who believe that their organization is prepared for the AI-related disruption recognize the crucial importance of leadership’s understanding of AI in driving that readiness. Nearly 90 percent agree that leadership understanding is one reason for their organization’s readiness. Other factors identified as contributing to readiness included cultural support of change and the allocation of sufficient resources (including time, money, and people), with 74 percent and 70 percent of respondents agreeing, respectively.
Executives are convinced their understanding of AI is a major driver for AI readiness (% of participants)
My organization is ready for the disruption, because:
Leadership understanding
Sufficient resources (time, money, people)
Cultural support of change
Disagree
Neither agree nor disagree
Agree
Note: Percentages may not resolve due to rounding.
Sources: Kearney and Egon Zehnder analysis
Lack of sufficient resources is driving a lack of preparedness
On the other hand, among executives who believed that their organization was unprepared, three-quarters said that the poor readiness stemmed from a lack of time, money, and people dedicated to building that readiness. Leadership understanding also has a role to play—just over half of the respondents agreed that lack of leadership understanding contributed to a lack of readiness.
Executives attribute the lack of readiness primarily to insufficient resources (% of participants)
My organization is not ready for the disruption, because:
Leadership understanding
Sufficient resources (time, money, people)
Cultural support of change
Disagree
Neither agree nor disagree
Agree
Note: Percentages may not resolve due to rounding.
Sources: Kearney and Egon Zehnder analysis
Developing a strategy is a key step for increasing organizational readiness
Given the importance of leadership in driving preparedness for the challenges that AI could bring, it is no surprise that leaders are taking action to increase their organizational readiness. At the forefront of these efforts is developing a strategy—indeed, more than three-quarters of respondents are taking this step. However, this alone is not enough. Only 14 percent of respondents reported that they were only developing a strategy, with the majority reporting that they are taking additional actions, including investing in infrastructure (49 percent), building external partnerships (44 percent), and recruiting experts (39 percent).
While AI is acknowledged to have great disruptive potential, the opportunities it offers may be greater still. Companies are taking these risks and opportunities seriously, as evidenced by a thirteenfold increase in AI-related corporate investments in the last decade.3 Nevertheless, a business-as-usual approach will not be sufficient to ensure that an organization will thrive in the age of AI. Deep change and strong cultural development will be needed, and leadership must be at the forefront. Although AI may not impact a leader’s day-to-day responsibilities as much as it impacts the overall operations of the company, leadership will play a key role in how organizations prepare for the disruption that AI will bring. Business leaders should act boldly and strategically to achieve organizational readiness, and to do so, they will require a deep understanding of current market capabilities and possible gaps in capability —both their own and those of their organizations.
- Countries: Germany, Japan, UK, US; Sectors: consumer and retail, financial services, industrial goods and services, technology, health, and other
- Specifically, AI applications that could support or replace office jobs, including machine learning, natural language processing, expert systems, and generative AI.
- Artificial Intelligence Index Report, Stanford Institute for Human-Centered Artificial Intelligence (2023).