Executive summary
As artificial intelligence becomes more sophisticated and accessible, leaders are discovering that it offers more than just improved efficiency – it could enhance their capacity for empathy and wisdom. This development challenges our normative assumptions about technology’s role in the workplace and suggests an intriguing possibility: that AI might help us become more effective, more human leaders.
- Unlike traditional workplace tools, which remain passive until activated, AI systems can initiate interaction, anticipate needs, and engage in ongoing dialogue.
- AI can enhance a leader’s judgment skills, emotional intelligence, and social powers, enabling better decision-making and employee relationships.
- “Through strategic application of AI systems and tools, leaders can cultivate their best human qualities and human areas of leadership,” says Paul Daugherty, chief technology and innovation officer at Accenture.
- While AI can significantly boost productivity, certain elements of leadership remain distinctly human and cannot be replicated by machines.
- Successful implementation of AI in leadership requires a robust ethical framework, including clear principles, practical policies, and governance structures.
We stand at the threshold of a new era in leadership, where success will be defined not by choosing between human wisdom and artificial intelligence, but by bringing them together in meaningful ways. The future belongs to leaders who can harness AI’s capabilities while preserving and strengthening the human connections that drive organisational success.
Since the dawn of civilization, humans have sought to innovate in the workplace with one consistent goal: to save time and increase efficiency. Each new breakthrough, from the simplest lever to the most sophisticated, has reshaped not just how we work but also how we organise our societies and economies. Now, the proliferation of AI within the workplace has marked the dawn of a new era – one which some have described as the ‘age of augmentation’.
What distinguishes this era from the countless that preceded it is the sheer volume and power of the tools at our disposal. Until now, our tools – no matter how sophisticated – have been essentially passive instruments. A shovel cannot dig a hole on its own; an email can’t compose and send itself. For the first time in human history, we’ve created tools that can initiate interaction, anticipate our needs, and actively engage with us in ongoing dialogue.
That’s the magic of AI systems: they don’t simply wait for instructions; they observe patterns, generate insights, propose solutions, and even question assumptions. They can adapt to individual working styles, learn from mistakes, and continuously evolve their capabilities. While conversations about AI often centre on productivity gains and efficiency metrics, there is one potential benefit that often goes overlooked – its ability to make us better leaders. So, how can AI improve the effectiveness of leaders? Or, let’s go a step further: could its impact stretch beyond analytics and decision-making into the more intangible aspects of good leadership like emotional intelligence?
“With the dawn of the AI age, we are only scratching the surface of what we can do in the future for our clients and our employees. The possibilities are endless, and leadership teams with the most curious minds will be the endgame winners”
Mary Erdoes, Chief Executive of JPMorgan Chase Asset & Wealth Management.
The AI-augmented leader
AI offers numerous ways for leaders to improve efficiency and productivity – streamlining their daily activities, improving decision-making, and personalising employee feedback.
A typical day in the life of a leader is, let’s face it, boring as sin. It’s filled with mundane administrative tasks, like scheduling meetings, responding to emails, organising documents, and managing calendars – all of which consume precious time. Today’s leaders need to claim that time back and repurpose it towards higher-value activities like strategising, building connections, and innovation. This is where AI asserts remarkable value. By delegating these responsibilities to AI virtual assistants, leaders can maximise their positive impact by concentrating on achieving broader organisational goals, nurturing talent, and driving strategic initiatives. The benefits don’t stop at cutting down the drudge work: decision-making is another key area where AI can offer leaders a much-needed boost.
There have long been signs leaders aren’t actually that well-suited to the task of drawing up and executing a good plan. Way back in the 1940s, March and Simons articulated the bounded rationality model, which suggested that leaders tend towards decisions that are just “good enough” based on limited information, cognitive abilities, and a lack of time. Their model has arguably borne itself out in the intervening decades – poor leadership practices cost a company around 7% of their total sales according to Gallup’s most recent State of the Global Workforce report. It does not take a genius to see how AI can help out here – instead of relying on limited data and personal biases, leaders can use AI to process vast quantities of data from countless sources. AI has a knack for joining the dots between seemingly-unrelated factors that human leaders would naturally fail to observe.
JPMorgan Chase was among the first major organisations to streamline their decision-making with AI. For the firm, it was all about making smarter investments – they deployed a series of tools to gather as much data as possible about investment options and derive key insights about how best to allocate their funds. The firm also uses AI to assist in managing the portfolios of its clients. “Even as one of the largest technology investors in the world, with the dawn of the AI age, we are only scratching the surface of what we can do in the future for our clients and our employees,” said Mary Erdoes, Chief Executive of JPMorgan Chase Asset & Wealth Management. “The possibilities are endless, and leadership teams with the most curious minds will be the endgame winners.”
Elsewhere, AI is being used to deliver more nuanced and personalised feedback to employees. Traditional performance reviews are often awkward affairs – full of subjective biases and too general for employees to garner any real value from. AI tools can reverse this problem by analysing each employee’s individual performance data and presenting key observations to leadership about performance. It’s important to note here that AI makes mistakes, and sometimes, those mistakes are pretty massive. A study featured in the November 2023 edition of the Industrial Marketing Management journal trialled the technology for decision making at an unnamed Norwegian energy trading firm. While the system did accelerate the speed of decision-making, it required cautious oversight – on multiple occasions it even advised leaders to violate laws around labour rights.
How leaders can leverage AI: a closer look
Whether it’s used to evaluate investment applications, generate financial reports, or write employee performance reviews, AI is already making a difference for leaders worldwide.
Let’s dig a little deeper into how leaders of all kinds are leveraging AI tools. Ernst and Young (EY), one of the world’s biggest consultancies, is spearheading the AI trend with a US$1.4 billion investment in its own transformation. The goal? To become the leading AI-powered services firm, kicking things off by upskilling leadership with the knowledge and capabilities to fully leverage AI effectively. Bridging knowledge gaps around LLMs, data analytics and AI-driven decision-making – you get the picture. A “human-at-the-centre” approach was taken to ensure that leadership did not become lax or compliant to whatever the AI suggested. Instead, leaders were trained to use AI to augment their own analysis.
By integrating AI across vast swathes of its internal operations, EY enabled its leadership to rapidly leverage data and make better-informed, faster decisions. The firm even launched its own ecosystem of GenAI capabilities, called EY.ai EYQ, with just four weeks separating conception and delivery. Some of the key capabilities of EYQ include versatile AI agents and conversational assistants trained on EY’s decades of knowledge, integrated prompt management, and the ability to incubate experimental leadership AI projects. Now, the company is taking its new-found expertise and offering it to clients. “By acting as our own ‘Client Zero’ and testing AI deployments internally, EY is determining answers to these questions now — so that we can guide our clients based on real experience and practical use cases of this technology,” says Raj Sharma, one of the firm’s global managing partners.
How AI can address talent shortages
Meanwhile, HR leaders are discovering that AI can not only boost the speed at which they get things done – it can radically improve the quality of talent they have access to during recruitment. Healthcare provider Fox Rehabilitation is among the more notable firms demonstrating this. In 2024, it began using AI firm Phenom’s suite of recruitment tools to address its talent acquisition struggles – particularly an ongoing shortage of physical, occupational, and speech-language pathologists. These are in-demand professions, to be sure, and the field is intensely competitive.
Now, Fox’s HR leaders oversee AI-powered targeting and personalised messaging campaigns that highlight company culture and the core value proposition, tweaking the message to find the sweet spot for specific candidates and demographics. AI tools are also being used to rediscover the talent that slipped through the cracks the first time, giving recruiters a second swing at that ideal candidate. AI-powered video job descriptions that showcase employee testimonials to boost engagement have also been deployed, with Fox attributing a 4% boost in application rates to them alone.
Elsewhere, Phenom’s recruitment chatbot has been able to reduce Fox’s application process from around seven minutes to one. By engaging with the chatbot, candidates answer a few quick screening questions and are then instantly scheduled a meeting with recruiters. “It’s amazing – you interact with the chatbot, answer a few screening questions, and boom, you’re directly scheduled with a recruiter,” says Christy McCaffrey, Director of Recruitment at Fox. The firm claims it has achieved a 295% increase in job applications and saved nearly 800 recruiter hours in the five months since they first integrated the suite of AI tools.
AI as a strategic planning tool
As we touched upon previously, AI also has the potential to radically enhance strategic planning. This has been a tougher egg to crack than other aspects of leadership, due in part to the fact that today’s leaders have attached their egos to existing strategies. Of course, it’s understandable that leaders would find it difficult to let an emerging technology assert control over their decades of work – but that doesn’t mean it’s tenable. Nevertheless, a growing number of companies are already showcasing what is possible. One example is German software developer SAP, which integrated AI to enhance its strategic planning as it expanded into the small and medium enterprise market. This segment was previously inaccessible to the manufacturer due to high costs and a dated sales model.
Bringing in AI allowed SAP to radically reshape its processes around customer acquisition, engagement and retention in one sweeping move. AI tools and models were integrated across every stage of the customer journey – discovery, selection, adoption, deriving value and extending the relationship, respectively – collecting data at every turn and churning out useful analytics on customer sentiment. The insights generated were also instrumental in aligning the company’s software strategies to prepare for emerging trends and opportunities. Personalised marketing campaigns and AI-assisted prospecting tools were also key, enabling SAP’s decision-makers to quickly prioritise and ramp up their presence for the most promising leads.
The overall effect was a massive reduction in the time spent courting small and medium-sized enterprises. More than 40 AI and generative AI tools were cumulatively integrated; in combination they were able to hack SAP’s sales cycle down from 12-18 months to less than six. In other words – the company’s sales pipeline was doubled thanks to AI. “We are using the power of generative AI across our stack to once again revolutionise how businesses run and end users will work in the future,” says Christian Klein, Chief Executive of SAP.
“We are using the power of generative AI across our stack to once again revolutionise how businesses run and end users will work in the future.”
Christian Klein, Chief Executive of SAP
Making leaders more human
AI can help leaders significantly enhance their cognitive, emotional, and social powers, allowing them to make the work experience more positive for the people they lead.
When thoughtfully integrated into leadership practices, AI doesn’t just boost agility and decision-making – it can also help them become more conscientious and human. Now, the idea that AI could make somebody more human might seem a little counterintuitive at first. After all, we tend to treat the domains of technology and humans as entirely separate things. When it comes to leadership, however, there are a growing number of experts who believe precisely the opposite. “With the power, promise, and potential of AI, leaders have a rare opportunity of rethinking and redefining how we work and how we lead,” explains Nhlamu Dlomu, global head of people at KPMG. “We can choose to make the experience of work more positive for ourselves and the people we lead and simultaneously improve financial results.”
So, how exactly can AI make leaders more ‘human’? Well, it’s all about how they spend their time. If automation is reducing your workload, you inevitably have more capacity to focus on the needs of your people. You can, however, take things a step further: consider the case of business transformation consultancy Accenture, which integrated AI into its performance review process to garner deeper insight into employee activities. Naturally, some of the company’s leaders were worried that automation would dehumanize the process. It did the opposite: instead of taking 45 minutes to compile feedback per employee, leaders could instead spend that time having truly meaningful conversations with their employees.
Unfortunately, many of today’s leaders just aren’t that good at reading the needs and emotional states of their people. However, AI’s advanced natural language processing and emotion recognition capabilities can detect subtle shifts in tone and word choice that might indicate changes in an employee’s engagement or well being and flag potential concerns before they escalate. Last but not least, AI can enhance your social powers within the workplace. When applied thoughtfully, AI can help you gain a deeper understanding of team dynamics, encourage diverse perspectives, and create a safe environment where people are comfortable sharing their thoughts. “Through strategic application of AI systems and tools, leaders can cultivate their best human qualities and human areas of leadership,” says Paul Daugherty, chief technology and innovation officer at Accenture.
Best of both worlds
All of these tools might be promising, but it’s important to remember that AI alone isn’t enough to make you a better leader. Many leaders today make the mistake of relying exclusively on AI while ignoring their personal development. If you really want to take your leadership skills to the next level, you need to combine the best of both worlds, pairing AI’s superior analytical abilities with inherently human qualities like awareness, wisdom, and compassion. So, what might this look like in practice?
Let’s say you’re a leader who needs to have a difficult conversation with one of your employees but you’re not sure how best to approach it. Typically, the first step is to put things in perspective and provide context for the conversation, outlining why it’s necessary and what the desired outcome might be. Fully aware that your own inherent biases and emotions may cloud your judgment, you then bring in the AI to help you analyse the situation and the person in question and offer suggestions on how to approach the matter. You may even ask the AI to roleplay various scenarios with you so that you can get a better sense of how the conversation might play out.
Just remember not to take the AI’s output at face value. While AI itself may not be biased, the data it’s trained on may very well be and that can be reflected in its responses. We’re all well aware of the ‘AI hallucination’ trend by now. So, before diving in with the review, you need to reach back inside and use your own wisdom to critically assess the AI’s answers before you engage in a conversation with the employee. After all, it’s a tool – not a one-size-fits-all solution.
Learnings
So what’s the big takeaway here? It could be argued that the integration of AI into leadership practice represents a pivotal moment in the evolution of workplace technology. For centuries, we’ve elevated leaders based on their capacity to analyse data, weigh options, and make sound judgments under pressure. But as AI continues to demonstrate its superiority over humans when it comes to crunching numbers and making optimal decisions, we are witnessing a profound transformation in what it means to lead.
Skills once considered peripheral to leadership – empathy, emotional intelligence, storytelling, and ethical thinking – are becoming central to it. Meanwhile, the analytical skills that were once treated as prerequisites for effective leadership are increasingly being delegated to machines. In a world where AI can optimise nearly every process, a successful leader will be one who demonstrates the ability to inspire collective purpose and foster genuine human connection.
