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| | Brought to you by Alex Panas, global leader of industries, & Becca Coggins, global leader of functional practices and growth platforms
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| | | | Many organizations are still in their AI experimentation phase, trying to figure out how the technology can fuel innovation, productivity, and growth. How should leaders meet the challenge? The best ones will prioritize both human depth and technical fluency as they guide their companies through this period of transition and transformation. This week, we look at how leaders can take a people-centric approach to the AI journey. | | | |
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| | | Leaders can meet the AI moment by focusing on the work and capabilities that only humans can provide: for example, setting aspirations, making tough decisions, and generating original ideas. As machines grow smarter, it’s more important than ever for leaders to get their human-centric responsibilities right, say McKinsey Global Managing Partner Bob Sternfels, Senior Partner Daniel Pacthod, and World Economic Forum President and CEO Børge Brende. They observe that effective leaders will shift from a “command” approach to providing context that helps their teams navigate AI-driven change—setting guardrails and expectations while fostering trust and collaboration. It’s also critical that they cultivate future leaders among high-performing employees who exhibit traits such as resilience, a learning mindset, and the ability to work in teams that include people and AI agents. “The ultimate competitive advantage for organizations in this AI era won’t be based solely on the algorithms they create—it will also be based on the authentic, adaptive, and accountable leaders they develop,” the authors say. | | |
| | | | | | | That’s the share of Fortune 100 companies that have disclosed some form of board oversight of AI, such as a committee, an ethics board, or a director with AI expertise. Boards’ governance of AI has not yet matched the pace of adoption, but AI-savvy boards can help companies navigate both the risks and opportunities, say McKinsey’s Aamer Baig, Ashka Dave, Celia Huber, and Hrishika Vuppala. The authors identify two priorities for boards: defining the company’s posture toward AI adoption and tailoring its governance model to match that approach. | | |
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| | | “Much like elite athletes, organizations aiming to excel in digital transformation must blend structured goals, meticulous planning, and disciplined execution with periodic adjustments.” | | | That’s McKinsey’s Bjørnar Jensen, Martin Hartenstein, Sébastien Lacroix, and their coauthors on how leaders can apply an athlete’s mindset to managing digital and AI transformations. They suggest that companies can reverse the long-term trend of failed transformations by mirroring the approach of top athletes—namely, committing to intense training with strategic rest periods to achieve peak performance. “For a few business leaders, looking at their company through that lens has helped them drive transformation breakthroughs that previously seemed impossible,” the authors say.
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| The AI revolution is a make-or-break moment for business leaders. Those who commit to AI transformations can achieve unprecedented success, says McKinsey Senior Partner and North America Chair Eric Kutcher. “And CEOs who sit and wait—their companies aren’t going to exist. They’re not going to thrive. It’s that binary in terms of importance,” he says in an episode of The McKinsey Podcast. Kutcher notes that leaders who are successfully navigating AI adoption challenges are constantly learning: for example, by spending time with tech-savvy junior members of their teams. They are also willing to show vulnerability by acknowledging that they don’t have all the answers and need to give certain issues more thought. “It’s liberating and inspiring for an organization to see their leader as human and approachable,” Kutcher says.
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| Some employees who are slow to use AI in their jobs may need a boost from their bosses. But how can leaders get people to overcome their AI-related reservations? McKinsey’s Julia Sperling-Magro and Tim Koller observe that some workers may be facing a psychological phenomenon known as status quo bias. “Status quo bias can cause people to overindex on the risks of adopting gen AI tools (as with, ‘The robots will replace me’) and underindex on the risks of inertia,” the authors say in an installment of McKinsey’s Bias Busters series. Leaders can help employees overcome this cognitive bias by reframing the choice—emphasizing that standing still may lead to potential losses and moving forward could bring potential rewards. “Additional approaches include making new-tool adoption the default position, using leader and peer models to encourage behavioral change, and raising awareness of how dramatically the status quo is changing in the wider world,” the authors say. | | | Lead by investing in human skills in the AI age. | | | | | — Edited by Eric Quiñones, senior editor, New Jersey
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