How Leaders Should Prepare for the AI Revolution

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“Is AI going to put me out of a job?” This is the existential question many people are asking themselves, from striking writers and actors in Hollywood to analysts, copywriters, and paralegals. 

It’s also something we need to consider as leaders driving disruptive transformation – how do we balance the value generative AI creates against the human costs? 

Productivity Created

Generative AI technology is already creating massive value across virtually every industry.

McKinsey reports one-third of organizations are already using generative AI in at least one function, and the Nielsen Norman Group found that AI improves employee productivity by 66 percent on average.

Likewise, I’ve seen a boost in my productivity. I now use AI to write simple emails, summarize documents, and even as a research assistant in my book.

Why is this such a big deal? Annual productivity growth in the US and EU hovered around 1 percent in the decade leading up to the pandemic. Achieving even the modest 25 percent jump many of my colleagues have predicted could come by the end of 2023 would mean a mind-blowing increase in productivity.

But as I said during my LinkedIn Live session this week, the problem I’m noticing when integrating AI into company workflows is that everyone looks at the benefits, not the consequences.

Now, leaders can think about how AI will affect their workforce. Which jobs are going to be accelerated—and which will be eliminated?

Tale as Old as Time

Technology has always been both a creator and a destroyer of jobs.

A recent study found that 60 percent of today’s workers are employed in occupations that didn’t exist in 1940. The sheer number of jobs produced by the internet alone is mind-boggling.

On the other hand, tech also makes some once-critical roles obsolete.

For example, the advent of the ATM made bank tellers much less relevant. A bank branch used to be a hub for dispensing money, and it’s been transformed into a place where financial advisors can work with customers on various aspects of their banking needs.

While AI will undoubtedly have a broad impact—Goldman Sachs estimates it could replace the equivalent of 300 million jobs worldwide—some positions are more vulnerable to obsolescence than others. Four industries that I think will be particularly affected are:

• Office Administrators and Support—Most of this field tends to be clerical, processing and producing documents. The Nielsen Norman Group’s study found that generative AI has increased productivity in document processing and production by 59 percent.
• Physical and Life Sciences—Any sort of tedious work that you have to do repetitively (like performing QA/QC checks on experiments) will likely fall by the wayside as AI increases its processing abilities.
• Data and Financial Analysis—Anything related to analytics is especially impacted in this field. Traditionally, analytics has been highly specialized, an inner sanctum of data nerds who keep their skillset close to the vest. But with generative AI, anyone curious about data or has interesting questions to ask about analytics can simply type it into a chatbot.
• “First Draft Generators”—Copywriters, content creators, call center operators, and paralegals whose jobs have already been changed by generative AI’s ability to summarize and process long text sections.

Though these are the areas I think we’ll see the most impact, it’s certainly not the only ones. No function or industry is off-limits.

Getting Future-Focused

If generative AI is poised to revolutionize the future of the workplace truly, what should leaders do to prepare their workforce (and themselves) for the revolution?

The first step is acknowledging that, yes, AI will change the way you do business. I’ve seen a little bit of denial from some leaders about what impact generative AI will have.

I recently talked to the CEO of a consulting firm, who said the industry had weathered similar challenges and that he wasn’t worried about AI devaluing his services.

But as the old saying goes, those who don’t know history are doomed to repeat it.

Take, for example, what happened to the journalism industry in the early 2000s. Most hard-boiled newspaper executives were adamant that this “new-fangled internet thing” wouldn’t affect how the industry worked. After all, newspapers had survived the invention of the radio, television, and 24-hour cable news networks.

Twenty years later, newspaper reporter positions have dropped more than 50 percent, and over 2,500 publications have shut down.

When it comes to AI, we have the benefit of learning from our past mistakes. An excellent way to start is by creating a prioritized list of AI initiatives for your company to pursue, which I discussed in last week’s newsletter.

Once you’ve made that list, consider each of these initiatives' impact on your workforce.

Jumping the Gun

It’s essential to anticipate generative AI's future impact on your firm, but you also don’t want to move too fast.

It saddens me to see companies unthinkingly using AI to replace humans to capitalize on the increased production. First, AI-fueled layoffs discount the hype cycle that surrounds any burgeoning innovation. We still have to see how AI will be implemented before we start looking for giant shifts in personnel.

Second, there’s a bit of an ethical consideration leaders must account for before converting that productivity bump into revenue. You can’t just think about the shareholders—you have to consider the stakeholders, too. Those are the employees, your partners, your supply chains, and even your local community.

The big question here is how fast you should turn over your workforce. One way would be to let your company’s natural attrition rate dictate your speed. For example, turnover in a call center tends to be relatively high, so instead of replacing those workers, you use the productivity gains from generative AI to take up the slack. 

Upskilling and reskilling will both be a significant undertaking shortly. Entry-level software coders, for example, do a lot of the heavy lifting in writing computer programs right now. But as the Nielsen Norman Group’s study demonstrated, generative AI has improved coding productivity by 126 percent.

As a result, you won’t need as many entry-level positions at your company, but you WILL need more middle-tier coders. These people are experienced with writing code and can tell whether the AI-generated code is viable. Their jobs will entail testing, reviewing, and refining. Your surplus of line-level coders will become excellent candidates for upskilling into that middle-tier role.

But there will be functions and roles where the supply of humans is greater than the demand for them, even when upskilled. Then reskilling becomes a priority, where those people are trained to do a different job in the company. Or they are let go because their jobs simply don’t exist anymore. 

The hard truth is that ethically, companies are not obligated to provide people with a job forever. But from a leadership perspective, we have tremendous control over if/how/when workforce transformations happen. 

This isn’t a problem to be punted over to HR. Every leader’s job is to think through and prepare for how technologies like generative AI will impact their employees. 

Next week, I’ll dive deeper into AI’s implications for how we lead our people. I hope you’ll join me Tuesday, August 22, at 9 a.m. PT to learn more!

YOUR TURN

Where do you see AI having the most significant impact on the people in your organization? How are you preparing for the coming changes?