Business leaders not ready for AI transformation due to limited people and funds
Thu 1 Feb 2024
A substantial 73% of business leaders feel ill-equipped for AI transformation due to constraints like limited time, people, and funds.
Despite this, 85% view AI as an opportunity for their organisations, with more than 90 percent seeing it as an opportunity for them personally within their roles.
This is according to a new report by global consultancy Kearney and leadership advisory firm Egon Zehnder titled ‘Leadership in the Age of AI’.
Alex Liu, Managing Partner and Chairman at Kearney, said: “Given the widespread recognition that AI is going to be a disruptive force for most businesses, it is surprising that business leaders still feel that their organisations are unprepared for the changes to come.”
The Gap in AI Preparedness and Optimism
The report highlights a significant readiness gap, with only 20% of business leaders believing their organisations are prepared for AI disruption expected within the next five years.
This discrepancy is attributed to a rapid growth in AI technology and a general lack of understanding about AI among leadership, noted by 51% of respondents.
Conversely, 89% of leaders from organisations that feel prepared credit their leadership team’s understanding of AI.
“The challenge now lies in translating this optimism into tangible action, ensuring both leaders and their teams are ready to overcome the challenges and embrace the opportunities that AI provides,” added Liu.
Leaders also believe that AI is going to disrupt their organisation as a whole much more than their own day-to-day roles.
Strategies for Embracing AI Transformation
Despite the challenges, a majority of leaders see AI as a promising avenue for innovation and personal growth within their roles.
Mirko Warschun, Partner and Member of European Leadership Team at Kearney, said: “Leaders can use their position to help their teams embrace the change that AI brings, and make sure their organisations are benefiting from it, rather than struggling to deal with it.
“Strong leadership will be vital to achieve this,” he added.
To leverage AI’s potential, businesses are taking proactive steps, including investing in infrastructure (49%), building external partnerships (44%), and recruiting expert talent (39%).
Burcu Bicakci, Partner at Egon Zehnder who leads T&C and AI in Southeast Asia, said: “Organisations are likely to change drastically with new AI-enabled technologies—and soon.
“Although the pace of AI adoption has accelerated, it is never too late for leaders to devise a clear AI strategy that can guide their organisation through this transformative phase and keep them ahead of the curve,” he concluded.