Maybe the AI “revolution” won’t lead to much. So what if it makes emails more grammatically correct or speeds up coding? Perhaps it will never be able to provide information that reliable. One MIT researcher even feels the bump in corporate productivity might be as little as 1 percent over 10 years.
With such uncertainty surrounding AI, leaders might be tempted to hold off for now—to let other firms spend big on AI and expand resources making mistakes—until there’s clear proof that it makes a difference in their specific business. Dave Rossi, president of Korn Ferry’s Global Industrial Manufacturing Advisory, says he’s currently seeing that approach across C-suites and boardrooms. “You feel like you have to invest in it, even if you don’t believe in it,” he says.
But CEOs who delay could face the danger of not committing to a valuable new technology—or embracing it too late. Business historians can recite a host of lessons from the past along these lines, pulling out such latecomers to new technology as Blockbuster and Sears, Roebuck and Co. But while the first functional artificial intelligence dates all the way back to 1951, most of the world only woke up to the once-in-a-generation potential of AI when ChatGPT hit the scene much more recently. This, many believe, could be the next internet or combustible engine—if only people, especially CEOs, knew how to use it and when. “It’s seen as a technology waiting for a problem,” says Jean-Marc Laouchez, president of the Korn Ferry Institute.
“
We’re seeing how critical hiring AI talent has already become.”
Some CEOs, like Peter Ross of Senior Helpers, a $500 million-a-year firm offering in-home healthcare, are already looking to the future. “I’m excited and nervous at the same time,” he says. He’s hopeful the technology will make it easier to monitor the health of the company’s patients, among other tasks. But the real game changer for Senior Helpers would be for AI to streamline the massive task of organizing, assigning, and deploying the firm’s 20,000 caregivers in its more than 380 franchise locations. Sure, to an outsider, none of this is as thrilling as watching Will Smith take on an army of robots, but it’s where the battle for survival in Ross’s business will be fought. “You can’t put your head in the sand for this one,” he says.
Of course, one pressure follows another. Already, a variety of stakeholders are demanding to see the return of investment firms who are pouring resources into AI, which is virtually impossible to calculate at this stage. And yet CEOs know they’re risking market share, even their entire businesses, if they don’t invest. Indeed, the cost of not reacting is already being felt in many sectors. According to a survey of nearly 8,000 firms that Korn Ferry commissioned from Telemetry, a talent data specialist that probes publicly available workforce data, high-performing companies had twice as many AI and machine-learning employees as their low-performing counterparts. “We’re seeing how critical hiring Al talent has already become,” says David Ford, managing director of Telemetry.
Experts say one of best ways for leaders to deal with AI is to make sure others in their firm aren’t feeling the same pressure they’re under. In other words, don’t overload managers of other divisions with AI responsibilities. Dedicate a leader and a team to assess which of the firm’s functions could be positively affected by AI adoption (or directly hurt if a rival adopts AI). Task the team with crafting and implementing an AI strategy, understanding that ultimately its use will be decentralized among employees to use effectively. Key AI roles don’t necessarily have to be permanent, either: Hiring interim talent can bring in the required expertise without a long-term financial commitment.
Smart firms know they need to set up safeguards for the use of AI tools, given concerns both about data privacy and error-prone output. That said, Paul Dinan, an advisory leader in Korn Ferry’s Global Technology Market practice, says the best leaders are finding ways to protect their business while still encouraging their teams to embrace AI and make informed decisions. “Don’t be disappointed in the apparent lack of progress. Change needs a long runway,” Dinan says. It’s advice Ross at Seniors Helpers is actually taking. Instead of immediately demanding that the organization’s 380 franchisee-owned offices adopt the technology to organize caregiver schedules, he’ll test it out at the five locations he directly controls. “Don’t put technology in until it’s ready,” Ross says.
Worldwide spending on AI (estimate)
Source: IDC, Gartner
$200
billion
2024
$154
billion
2023
$118
billion
2022
$85.3
billion
2021
$50
billion
2020
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Get answers to the right
AI questions:
What are the challenges and opportunities? How can AI’s power best be distributed among employees? What are the potential ethical implications?
1 of 3
Encourage experimentation (within boundaries):
The goal is to experiment, iterate, learn, and improve, rather than to achieve perfection.
2 of 3
Help employees adapt to AI:
Train employees, foster a culture where AI empowers—rather than intimidates—employees, and develop strategies to integrate the technology while still encouraging the strengths of human workforces.
3 of 3
steps
Getting the Jump on AI
According to one Korn Ferry survey, 82 percent of business leaders say AI will profoundly affect their businesses—they
just don’t know how yet. What is known
is that it’s expensive. So how should
leaders think about this technology?
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The Breaking
Point
CEOs are hired to handle pressure, but how much is too much? We look at 5 of the most daunting pressure points in today’s world—and new ways to navigate them.
In one way, the pressure Richard Kerr faces today hasn’t changed much since he became CEO nearly 25 years ago. The formula for the
job was pretty basic: Make something, sell something, and make a profit on that something. But in the post-pandemic era, Kerr, the head of a Dallas-based insurance firm, feels something has changed about his job. The pressure, it seems, is decidedly different.
Some of this is attributable to the looming shadow of artificial intelligence. Sure, Kerr has been around long enough to remember when computer terminals were as big as TV sets, and the only clouds were hanging in the sky. Artificial intelligence feels like an entirely different animal, disruptive beyond imagination. He sees some great opportunities—like using AI’s machine learning to assess a potential new region for business, as opposed to the clunky method of sending people there. But he can’t say when those tools might come around. How do you decide how to expand for the long term in such a world? How do you make sure competitors don’t beat you to the punch?
People pressures are different too. Kerr says his firm’s growth has mainly come from his staff’s skills and experience, something that
young recruits working remotely don’t pick up from veteran staffers. “Even though we’re connected, you wind up out of sync,” he says. Meanwhile, he must make decisions with two private-equity investors tracking his every move—this, while living in a world with so much turmoil in various governments, a shaky global stock market, and not one, but two major wars. How do CEOs run the show in such an environment? Projecting confidence, a critical leadership trait, is pretty tough. “You can’t just sit back and say ‘I’m smart. I know what
I’m doing,’” he says.
Not even for a day.
The term chief executive officer is thought to have originated in 1917, around the time corporations started using sophisticated techniques to measure a firm’s success. In the 100-plus years since, certainly many CEOs have faced some tough times. In the 1930s, there was a global worldwide depression. In the 60s, leaders grappled with amazing but threatening new technologies. The 21st century brought
two new pressures: globalization, and the challenge of integrating the internet into business life.
But in the minds of some experts, the pressures CEOs face now are unprecedented both in quality and quantity. A decade ago, a new
CEO could confidently rely on a playbook to face most challenges. These days, experts say, there’s no such playbook. There is just too much happening—leaders say they can hardly catch their breath. Indeed, one Korn Ferry study found that 71 percent of CEOs in the US alone confess to having “imposter syndrome,” a corner-office crisis of confidence unheard of in the days of Jack Welch. Bosses can't
even take their personal safety for granted.
For many, it’s as if the walls are closing in, slowly but surely. “There’s no one solution that fits all,” says Laura Manson-Smith, Korn
Ferry’s global leader of organization strategy consulting, a role that puts her smack in the middle of the disruption so many firms have encountered. For his part, Simon Freakley, chairman and CEO of management consultant AlixPartners, puts it this way: “CEOs are truly
in the hot seat.”
This is all in addition to the personal safety threats some CEOs felt after last year's shooting in New York of one of their ranks. Sure,
chief executives know they are paid well to overcome nerve-rattling pressures. Yet some experts are now wondering if CEOs have reached their breaking point. In 2023, CEO turnover at the world’s largest companies was only slightly lower than the record level of changes in 2022. This year the turnover continues near 2022’s record pace, with the difference that much of it hasn’t been voluntary. Of the 191 Russell 3000 Index company heads who have left in 2024, 74—or nearly 40 percent—were reportedly fired or forced out, according to data compiled by independent researcher Exechange. That’s the most at this time of year since the firm began tracking CEO departures last decade.
What’s behind all this drama? No one can know for sure. Academics may debate it for years. But in search of answers, Briefings dug
into every nook and cranny of the corner office. We consulted dozens of pros inside and outside Korn Ferry, and, of course, hundreds
of CEOs—as well as the workers who have a front seat to all of it—as we considered the most daunting pressure points CEOs face
today. In the end, we settled on five. Some are familiar, others are not. And for each one, we raised the question: How can CEOs
solve it?
AI: A Stealth Weapon
“You can’t put your head in the sand for this one.”
The Problem:
Artificial intelligence could disrupt everything, but few
leaders really know how it will.
The Solution:
Dedicate a team to exploring AI and crafting a strategy, then experiment.
Growth: It’s Vanishing
“Where are the big ideas?”
The Problem:
The traditional tailwinds driving sales and profit growth have faded,
and many companies are finding they can’t grow without them.
The Solution:
Leaders need to shift their company cultures to encourage a greater tolerance for risk.
Empowered Employees
“The moment you sneeze, somebody knows about it.”
The Problem:
CEOs can no longer expect to make business
decisions without facing some employee dissent.
The Solution:
Be much more diligent and transparent in how you communicate.
Active Activists
“I’m looking for CEOs to show some courage.”
The Problem:
The number of activist campaigns is surging, nipping at CEOs’ heels or creating wide disruptions.
The Solution:
Communicate consistently with shareholders— but don’t give in when it doesn’t make sense.
The World—and the Economy—at War
“If you’re not agile, you’ll die.”
The Problem:
Uncertainty isn’t going away, but many
leaders refuse to deal with it.
The Solution:
Become more agile. Simple to state, hard to execute.
