fbpx

State of AI Update & the Responsibilities of Senior Leaders

State of AI Update & the Responsibilities of Senior Leaders

Filter tag: AI and Digitisation, Culture & Organisational Effectiveness, Leadership Capability, Strategies for Growth

At Rialto, we often stress the importance of artificial intelligence (AI) for the future of business. We published a white paper on the digital imperative, discussed how to navigate your career through technological change, outlined strategic priorities for leadership, made predictions for AI’s role post-pandemic, and highlighted some of the ways that AI can help with leader’s people management challenges. This technology has impossibly vast potential that is finally coming into mainstream acceptance, meaning that innovation is happening at a rapid pace with changes happening frequently.

There are a number of forward-thinking leaders who got on board early and are now exploring more advanced applications of AI, but the majority of global business leaders are just beginning on their journeys. In this article, we aim to bring leaders up to date with the state of AI as of Q1 2022, and put this into context in terms of what may be expected of their role during the adoption journey of AI in transforming business models.

 

The Current State of AI

AI adoption has only continued to grow in the past year, with more businesses and their decision makers coming to grips with this technology. In McKinsey’s latest State of AI survey, 56% of all respondents reported AI adoption in at least one function of their business, which is an increase of 6% from the 2020 survey. Gartner’s Second Annual Emerging Technology Product Leader Survey found that the majority of respondents (87%) predict industry-wide funding for AI will increase at a “moderate to fast pace” throughout 2022. Their survey also found that a third of global organisations with plans to adopt AI intend to invest $1 million or more into the technology over the next two years.

Zooming in on the UK, it seems as though businesses of all sizes are betting on tech for their recovery and growth efforts. The Department for Digital, Culture, Media & Sport (DCMS) recently published a report on the current and future use of artificial intelligence by UK businesses, which found that around 15% (432,000) of all UK businesses have adopted at least one AI technology, while around 2% (62,000) are currently piloting AI and a further 10% (292,000) plan to adopt at least one AI technology in the future. 68% of large companies, 34% of medium sized companies, and 15% of small companies have adopted at least one AI technology.

IT and telecommunications (29.5%) and legal (29.2%) currently have the highest rate of adoption, while hospitality (11.9%), health (11.5%), and retail (11.5%) represent the lowest adoption rates in the UK. In terms of actual use cases, the DCMS report found that AI solutions for data management and analysis are the most commonly adopted with 9% of UK firms having adopted them. This is followed by natural language processing and generation (8%), machine learning (7%), AI hardware (5%), computer vision and image processing and generation (5%) tools. Looking ahead, the DCMS report predicts that expenditure on AI technologies could increase to between £27.2 billion and £35.6 billion by 2025. By 2040, that figure could increase to between £50.4 billion and £127 billion.

This reaffirms what we already know: AI is inevitably the future of business and the majority of leaders will need to become more confident in utilising AI. The increase in adoption rates indicate that the resistance to transformation is dwindling as many of the hold outs enter the exploration phase and the more forward-thinking businesses transition to application or explore further AI projects. For transformation projects to be successful, there needs to be buy in and involvement at every level and department. Whether your organisation is just embarking on its AI journey or looking ahead at what other problems this technology can solve, there will certainly be impacts on your specific role and function.

 

The Role of Senior Leadership

CEOs

The role of the CEO or top executive of the organisation is that of both decision-maker and champion. These executives are tasked with delivering results to various stakeholder groups, while also serving as the public face of the business. The two entities are so deeply intertwined that the failures of the organisation are often considered to be the failures of the CEO in the court of public opinion. Plotting, strategising, and delivering a change project is a massive undertaking and a huge responsibility for the CEO. Getting it right will ensure happy stakeholders and customers, but getting it wrong could have major career consequences.

Of course, any transformation plans should come from the board as a whole, but it is often the CEO who has the final say. Typically, they are also the ones responsible for selecting which tools to adopt, sometimes with input from the CTO or other knowledgeable parties. However, not every organisation has a tech expert on hand to advise, and CEO or top exec might have to go it alone. Therefore, it is essential that these leaders have a strong understanding of AI and its capabilities so that they may make informed decisions about the future of their organisation. Continuous learning and upskilling will be valuable to professionals in all functions, but for top leaders especially. Seeking out training, keeping up to date with the news, or pursuing a proper course on AI can make a massive difference. The most successful leaders are those who realise the world is changing around them and work to change with it.

But arguably more important is the CEO’s role as a champion of change. Wherein staff in the organisation will need to adapt to working alongside these tools, the CEO is not likely to see their role massively reshaped by AI. Instead, top leaders will need to focus on getting the rest of the team on board and encouraging a willingness to give this technology a try. Change is uncomfortable, and there will likely be staff who resist the introduction of new tools. The team will be looking to their leadership for guidance and reassurance, and the CEO is about as senior as it gets. Your people will be looking to the top in order to assess the legitimacy of these new mandates. Does it seem like you truly believe in what you are saying? Are your words telling one story, but your actions telling another? Top executives need to lead by example. If you want your people to buy into new initiatives, then you yourself need to practice what you preach and truly understand what you are asking for.

 

The Rest of the C-Suite

The rest of the C-Suite serve as the top representatives for each of the business’s various functions, including Marketing, Finance, Operations, Technology, Sales, Growth, and so on. Individually, these executives are responsible for their individual departments and all the staff and activities that fall under their domain. Collectively, these leaders must unite these individual pieces to work towards the best interests of the business. If the sum of its parts is successful, then the senior leadership team could be considered successful as a result.

At this level, you may find yourself less concerned with the day-to-day use of automation tools in your role and more focused on the ‘why’ of it all. It will be your responsibility to determine what role technology will play in your function, give input into the tools that will be introduced, and help to form a business case for adoption and transformation. But more important than that, your role will be to champion and to help shift the rest of the organisation towards an AI mindset. While the CEO may serve as the main spokesperson for your company’s transformation efforts, it will fall on you as a top-level executive to reinforce that message within your division of the company. It is crucial for the senior leadership team to present a united front when it comes to change management. That way, the message is clear and reinforced. Communicate clear expectations with your team so that there is an unimpeachable understanding of roles and responsibilities. Depending on the structure of your organisation, you may choose to funnel this message down via your managers, but your stance as the head of your department should never be in question. Help form the plans and stick by them once they are introduced. Otherwise, you risk losing all confidence from your team and your project may be doomed before it even has a chance to begin.

 

HR Director

When undergoing a transformation project, ‘people costs’ need to be factored in alongside the costs of the technology itself. According to the DCMS report mentioned previously, the 432,000 UK companies who had already adopted AI in 2020 spent a total of £46.0 billion on labour associated with the development, operation, or maintenance of those technologies. The average labour spend was £24,400 per small business, £1.7 million per medium business and £3.1 million per large business. This overall expenditure is predicted to increase to between £80.2 billion and £103.2 billion by 2025, and between £185.2 billion and £456.0 billion by 2040.

HR Directors (HRDs) will likely be the ones tasked with managing this expenditure, whether it be via onboarding new talent or upskilling existing staff. When adding talent to the team, it will be essential to look for baseline technological skills, but attention should also be paid to the types of capabilities that technology cannot match in order to create a well-rounded team. These are what we typically consider to be ‘soft skills’ such as communication, creativity, strategy, and so on. If adding new talent to the team is too costly, investing in the people you have is a strong option. Upskilling initiatives will likely fall under HR’s domain

Beyond ensuring the right talent and skills are on hand to cope with new technologies, AI tools can also be used to help facilitate a lot of these processes. AI can help to automate some tedious activities that eat up time for HRDs. For example, AI can help with document verification and data entry, scheduling staff, managing leave, setting up meetings and appointments and automating communication with prospects and current staff. Automation can be introduced to various stages of the recruitment process to streamline the experience for the candidate and save time for the HR team. But further than that, AI can help with a major challenge HRDs currently face: retaining their staff in the wake of the Great Resignation.

AI can be leveraged here to gain insight into the mindsets of current staff. How satisfied are your people? What has motivated them to stay, or what is driving them to leave? AI can help provide answers to these tough questions, and also provide insight into the needs and desires of the market. Often, these tools can signal HRDs to potential problems before it’s too late, allowing them to potentially intervene and retain. Investing in existing talent is a draw for people to stay, and HR will likely be tasked with leading any upskilling or retraining initiatives for current staff. E-learning platforms can help support these training efforts by tailoring the materials to suit individual needs, helping to ensure that staff are grasping the information and that HR’s training budget has been used effectively. While the directive for upskilling may come from higher up in the organisation, HRDs should expect to be the ones the board turns to in order to help figure out the logistics and oversee the process. It is recommended that anyone in this position take the time to learn about some of the tools available in preparation.

Artificial Intelligence is one of the greatest technological advancements of our lifetime, and its impacts will be felt across industries and job functions. However, AI is here to assist and augment, not replace and make redundant. This technology can achieve remarkable things, but not without the assistance of human intelligence. These projects will only be as successful as the teams driving them.

After coming to grips with the idea that AI is something you need to explore, we recommend focusing on building your skills and understanding. Knowing that AI is important and actually believing in its potential and the benefits it can bring to your business are two very different things. Your mindset can make or break you when it comes to delivering change, regardless of your role in the organisation. As a senior executive, you need to ensure you buy into what you are looking to achieve before you can ever expect your team to buy in. You need to walk the talk if you want your people to follow.

share: Facebook Twitter LinkedIn E-mail
NEWS & INSIGHTS
White Paper
The Digital Imperative

This white paper sets out to show leaders some of the areas and issues they need to consider to ensure their organisations have the agility and adaptability to remain ahead of the curve and their competitors in the digital age.

Blog
Navigating your career through the digital imperative

Don’t let complacency stall your career Between a global pandemic, a double-dip recession, ongoing digital transformation and more, navigating an…

Blog
2021 Strategic leadership priorities using AI & Technology

During 2020, digital transformation initiatives helped businesses to stay afloat when the world was plunged into challenging and uncharted territory.…

view all News & Insights