ChatGPT and AI’s Effect on Senior Leadership

March 29, 2023 – Since it burst onto the scene in 2022, ChatGPT has become one of the hottest topics in the business world, and the world at large. OpenAI’s latest (and most popular) endeavor has been a hot topic of conversation among leaders in recent weeks, as it became the fastest growing “app” of all time. But can this powerful AI advancement really improve leadership?

To gain insight into what ChatGPT can really do, it’s helpful to have a sense of how it operates. One of a new generation of generative AI tools, ChatGPT is a large language model (LLM) designed to understand and respond to natural language inputs from humans in a conversational manner. Utilizing a vast amount of text data and applying sophisticated deep learning algorithms, it generates human-like responses to a wide range of questions and prompts.

As leaders consider effective strategies for their businesses, they must cultivate a perspective on generative AI in all its forms, the ever-evolving technology landscape, and how to ethically embed new and distinct innovations into their businesses without getting swept up in the hype of the latest tool, say Russell Reynolds Associates’ Leah Christianson and Joy Tan in a new report.

‘There is no turning back—the next tech leap is already underway,” said Russell Reynolds Associates. “Leaders who stay connected to the technology ecosystem and maintain a tech-readiness mindset will be best prepared to address these changes.” As you plan for a future with generative AI, the report says it is essential to recognize that:

• Uncertainty is inevitable; embracing it could revolutionize your business.
• Generative AI can stand-alone, be integrated, or augment entire processes—each option bringing its own challenges and opportunities—but it isn’t any smarter than what you feed it.
• Culture is still the core of your business: AI can’t replace moral and ethical human.

Can generative AI improve the human experience of leadership?

“The ongoing information explosion means we have access to more data than ever before,” the Russell Reynolds study said. “Now, users can employ generative AI to sift through immense amounts of data and concisely summarize key points across various fields.”

Additionally, according to Mira Murati, OpenAI’s CTO, these tools can also enhance personalized learning and ideally, generative AI will speed up the creation of novel strategies, products, and services, helping users understand and ideate new concepts faster than ever before.

By inputting specific queries and well-organized data points, individuals can potentially use generative AI to enhance their work with increased quality and speed, according to the Russell Reynolds report. “The purposeful integration of generative AI into our processes—particularly those that are repetitive or manual—may help combat the culture of busyness and increase efficiency,” the report says. “This should enable leaders to shift an organization’s focus toward true knowledge work; that which requires time to engage in deep, strategic thinking and idea generation. It could also provide more balance between work and life—something we know leaders crave.”

Given our uncertain economic environment, it’s also important to consider generative AI’s growing impact on the bottom line, according to findings from a recent McKinsey report. Consider where AI could address labor shortages, effectively taking over tasks or roles of decreasing interest to humans while also providing potential cost savings.

Related: To Integrate AI, Companies Must Alter Management Styles

What challenges does generative AI pose for leaders?

While there’s much to be excited about around generative AI’s potential, the Russell Reynolds report notes that there are several considerations leaders need to take into account, including:

Talent displacement: Generative AI may not just eliminate repetitive work; it will likely impact white collar roles as well. The Russell Reynolds report says that these tools cut across myriad industries and jobs and, because of their sophistication, unlike basic automation, they could displace middle-skilled and high-skilled workers in a way that past technology shifts never have before.

The Challenge of Finding Top AI Leaders
Artificial intelligence (AI) talent is increasingly in demand globally, with cities in North America becoming major markets for such leaders. Céline Chabée, of Pender & Howe Executive Search, examines the process of finding talent in this burgeoning area.

Sub-optimal decision making: The polish with which tools like ChatGPT deliver its results increases the risk of overconfidence in unvalidated information sources. Well-packaged information can easily fool us, as it appeals to what psychologist Daniel Kahneman calls “System 1 Thinking,” in which our fast cognition makes snap judgments based on heuristics, requiring little to no effort.

Ethics & Discrimination: “There are significant concerns around weaponry, privacy, surveillance, and corruptibility,” the Russell Reynolds report said. “There is also risk of AI perpetuating discrimination; if trained on biased data (which we know exists in many organizations) generative AI tools could deliver discriminatory outcomes.”

Related: New Report Shows Diversity Gaps in AI/Data Leadership, Compensation

Skills erosion: Overreliance on AI may eventually cause human skills to wane. “Our ability to scrutinize the results of a given analysis is at least partly predicated on our existing understanding,” the study said. “If we allow AI to become a crutch, rather than a tool, it puts our core competencies at risk.”

What can leaders do to plan for continued technology transformations?

Generative AI platforms have the potential, like the internet or wireless before them, to eventually change everything. AI is already embedded into society in ways that, by now, feel natural. “When it comes to generative AI, we are in the critical before-times, in which leaders need to learn how to strategically integrate these tools into their organizational processes and leadership approaches in ways that feel as natural as the examples above,” the Russell Reynolds report said. As you plan for changes that AI will inevitably bring, the firm says to recognize:

Uncertainty is inevitable; embracing it could revolutionize your business.

Stay open to the opportunities generative AI could create for your organization, even if you don’t have all the answers. As the search firm showed in its Q4 2022 Monitor, economically prepared organizations strategically invest in technology advancements, vs. taking ad-hoc actions motivated by buzzwords. “Leaders who commit to building a tech-first culture and develop an evolving understanding of AI’s relevancy for their organizations will be most likely to find success,” the Russell Reynolds report said. “Consider these technology developments against the backdrop of other recent changes, including supply chain unbundling, shifting geopolitical landscapes, and new modes of working. This is also an opportunity to engage with the broader tech ecosystem, including academics, industry experts, and next generation leaders. How might the world look when your ability to think of new products, concepts, and distributions is supercharged by AI?”

Hunt Scanlon Media’s 2023 Private Equity Recruiting Report
Recruiting world-class talent is the No. 1 priority for private equity firms and their portfolios – and those moving decisively for the right leadership are winning. Explore the new levers private equity talent leaders are pulling on to unleash higher levels of leadership performance.

Hunt Scanlon Media’s 2023 Private Equity Report is filled with input from experts with deep knowledge in all things private equity. This report will also include survey findings from the PE and executive search audiences as well as analysis of what this data means.

The report will be released in tandem with our May 18th Private Equity Conference in New York! If you are interested in advertising in the report please contact: Erik@huntscanlon.com

Generative AI can stand-alone, be integrated into processes, or augment entire workflows—each option bringing its own challenges and opportunities—but it isn’t any smarter than what you feed it.

“We haven’t uncovered all the ways these tools will alter and enhance how we work and lead, but we do know that every option will require adaptation,” the Russell Reynolds report said. “As with every tech leap, leaders should not expect to outsource skills or domains in which they have not built up competence, nor should they expect positive results from a tool that they haven’t learned how to employ thoughtfully.” For example, the firm says that those who continually outsource information interpretation may never learn or practice the art of sifting, analyzing, and framing—in short, thinking critically. Consider: If everyone started using ChatGPT extensively, who would create the good quality information for it to draw from? And who could scrutinize its analysis?

Additionally, leaders should beware of disinformation and “information degradation” over time, according to the Russell Reynolds report. “Generative AI tools need information bases from which to pull,” the search firm said. “If your organization has relied on incomplete or incorrect data, AI may generate equally flawed results. Don’t expect these tools to suddenly solve systemic issues.”

Culture is still the core of your business: AI can’t replace moral and ethical human leadership.

Past Russell Reynolds reports have found that confidence in leadership is declining, even amongst fellow leaders and not only could an overreliance on technical tools cause skills erosion, it might also negatively impact confidence in our human leaders. “C-suite, next generation leaders, and employees alike are looking for enhanced people leadership in the new frontier of work,” the search firm said. “To augment AI’s advantages, leaders need to be both agile and discerning, often stopping to consider how to wield new tools responsibly.”

If we become overly reliant on generative AI, we risk abdicating our strategic responsibilities, the Russell Reynolds report says. “AI might supply a new framework, but human judgment, creativity, and strategic thinking are still necessary to lead and develop effectively,” said the search firm. “Leaders should aim to meet their people with passion, authenticity, rigor, and humility. That’s something they’ll never get from a bot.”

Related: Attracting Top Talent in the Age of AI

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media