November 3, 2023 – AI is here and it will impact you no matter your sector or function, as its capabilities are growing exponentially. According to Forrester research, 100 percent of organizations will be using AI by 2025. But the impact will vary markedly across areas.
A new report, authored by Heidrick & Struggles’ Victoria Reese, explains that the important questions for C-suite leaders, then, are specifically where and how generative and other forms of AI will impact your function, business, and industry? How to invest in it appropriately and plan for the future given the obvious value-add and potential risks? Heidrick & Struggles presents insights on these questions from its own leadership.
Given Heidrick & Struggles’ focus on leadership and talent, they are seeing multiple AI-driven applications and opportunities in the HR domain. A recent report from Forbes said that for CHROs, AI could play a significant role in talent assessment, helping analyze data to deliver insights related to high-potential-talent identification within specific functions, roles, and levels inside an organization, which further optimizes pipelines and succession planning.
“AI applications could quickly synthesize themes from employee engagement survey responses, exit interviews, and other sources to provide a near real-time perspective on not only how employees are feeling about organizational culture and the general employee experience, but also what gaps exist and need to be addressed,” the Heidrick report said. “Managers could use also use AI to understand which employees may be at risk for departure based on certain comments or feedback, performance patterns, or even participation in meetings.”
An important area to apply AI is the assessment of existing bias in hiring, promotion, and performance management practices, such as implicit bias related to race, gender, or other dimensions, according to a Forbes report.
The Heidrick report also explains that analytics tools and models powered by AI could enable CHROs to both test and design solutions against predicted top- and bottom-line impact, and maximize the return on investment for different organizational initiatives. “In M&A, AI could be used to predict whether a company is likely to merge, or possibly even ease of integration and challenges that may arise related to culture, org design, and others,” firm said.
Because of this broad, growing range of AI-based HR applications, CHROs and their teams are increasingly expected to have strong AI acumen. Heidrick sees this becoming a top priority for its clients across all sectors.
Legal and Government Affairs
Heidrick’s experts and client executives believe AI represents potential for major enhancement of the legal role and function. Use of these technologies could enhance access to business intelligence and promote better understanding of the business at both strategic and tactical levels. “AI could be used to assess, in seconds, the wide range of business implications of legal matters in local and global markets,” the Heidrick report said. “Imagine in-house counsel for a manufacturer is reviewing an agreement for sales to push back the start date of a large-scale customer project. In this context, it is not just about making the contractual extension happen but evaluating the impact on all other business units, something rarely done in the past.”
Specifically, the report says that general counsels can use AI to specify the contract modification and AI will understand major and more subtle impacts to product, manufacturing, supply chain, procurement, sales, import-export, and many other areas.
Victoria Reese is a partner in Heidrick & Struggles’ New York office and the global managing partner of the corporate officers practice. Before this, she led the legal, risk, compliance & government affairs practice and was the first global head of diversity & inclusion, advancing the firm’s commitment to D&I internally and externally. She has served on the H&S management committee since 2017.
Heidrick believes it must be a true team effort to secure the best results from AI applications. For example, the CIO and general counsel should collaboratively approach possibilities and risks associated with AI for internal and external uses. “Companies will need to decide, for example, whether to allow the use of generative AI internally,” the Chicago-based search firm said. “Some are opening this door while others are more wary, such as a company that may prohibit the use of AI because they see their IP and content as part of their value proposition. Ultimately your top executives should collaborate to decide investments best for your organization, recognizing outside regulation will arrive at some point—for example, most countries offer only AI-related guidelines, but some, like Korea and Italy, are advancing legislation in this area.”
Marketing and Sales
AI is viewed as a zero-cost, efficient way to perform key simple marketing tasks, especially for companies on a shoestring budget, according to the Heidrick report. “There are seemingly endless applications of AI in the marketing and sales domains,” it said. “Current uses of generative AI center largely around content development, including writing initial ad copy, social media and blog posts, and creative briefs with input and refinement from creative teams.”
The Heidrick report also notes that ChatGPT, Bard, and other emerging platforms can perform data-rich research, again with input, double-checking, and refinement from marketing team members. “AI technologies can also jumpstart the creative process for teams as related to advertising, marketing campaigns, apps, and others,” the report said. “CMOs we know have noted that generative AI platforms help their teams come up with great starting points for creative ideas or campaigns, and that access to this first coat of paint could ultimately reduce some costly agency work with minimal investment.”
Related: ChatGPT’s Future in Recruitment
“In the sales arena, AI is being used to assess market size, optimize salesforce size, and bridge gaps to customers,” Heidrick said. “It has shown success in improving the ability to sell more with fewer resources and driving increased velocity of closures while improving the quality of customer interactions through sales training platforms that leverage AI technologies.”
In finance and financial operations, too, Heidrick and its clients see significant application of and potential for AI, given the large volume of data and predictive analytics or decision-making involved in this space. According to a report from IBM Institute for Business Value, AI technologies are already driving better forecasts of revenue, costs, and other figures using broader internal and external data, to improve the bottom line.
The Heidrick report also explains that AI is a powerful approach to anomaly detection in large sets of financial transaction data, for improved fraud identification and security. “In addition, there are multiple other applications of AI in finance, including projecting return on investment, calculating investments required in new products and initiatives, optimizing budgets (especially avoiding underestimates based on past data), and other areas,” Heidrick said.
Given the high potential for AI in the finance organization, Heidrick explains that businesses will have to evolve quickly to create tech-enabled economies of scale driven by financial decisions. “Finance is already a strong business partner in most companies, but these AI trends will cement this function’s role through advanced, AI-driven analytics,” the report said. “The AI boom will also likely lead to heightened demand for those who bring traditional finance expertise coupled with acuity for machine learning and other AI applications that will power the future of finance.”
Technology and Information
Not surprisingly, AI is significantly impacting the role of chief information officers and other technology leaders within companies, given they own the technology driving AI, and must work closely with the rest of the C-suite to create strategic opportunities and value, according the Heidrick report. “AI technologies such as robotic process automation and intelligent automation help technology officers automate repetitive and mundane tasks across organizational areas, improving efficiency and reducing costs to enable their teams to focus on higher-value activities,” the search firm said.
5 C-Level Roles Being Impacted by AI
The predicted potential of AI can be a contentious subject depending on the industry. Some, including Elon Musk, foresee a Skynet-like future, as in the Terminator movies, if AI advances unchecked. Others believe the threat is overblown, and genuine AI autonomy acting with malicious intent towards humans is dubious. Unfortunately (or perhaps fortunately), businesses cannot truly predict the existential ramifications of AI technology, however the current and future impact on the C-suite can be imagined, according to a recent report from Odgers Berndtson’s Emanuel Pfister.
The Heidrick report points out that technology teams are also responsible for creating, implementing, and managing AI-powered technologies that support and enhance the customer experience, like enabling chatbots and virtual assistants that answer questions and reduce interaction with human representatives; making richer information available to human customer service reps; and providing more powerful personalization/recommendation systems. This is the area in which Heidrick sees the most activity today, as organizations are using AI technologies to create and pivot the narrative, reach and interact with customers, upsell, course-correct in real-time, and take other actions to benefit customers and companies alike.
“AI is reshaping the workforce, and technology officers need to lead the transformation,” the Heidrick report said. “For example, technology leaders are harnessing the opportunity AI gives them to significantly reduce the time it takes to build applications. As another example, technology officers are collaborating with HR departments to address the impact of AI on employee roles and skill sets, and playing a key role in upskilling or reskilling employees to work effectively with and alongside AI technologies, given the revolutionary nature of this shift and the potential displacement it will cause across workforces. They also oversee the ethical use of AI, ensuring transparency, fairness, and accountability in AI-driven decision-making.”
Heidrick has been watching HR transformations for decades, but the pace of this change is increasing exponentially now, on multiple fronts, and technology officers are at the forefront.
An Evolving, Opportunity-Rich Space
“AI is continuously evolving and creating new opportunities—and potential challenges—for all functions,” the report said. “Right now, it’s having the most impact on analytic speed and process efficiency, augmenting human capabilities significantly. But generative AI is fast making its mark creatively.”
Heidrick says that leaders must focus on learning and experimentation related to AI, for themselves and their teams. “It’s about building collaborative capabilities in this space, while also ensuring an enthusiasm for AI tools doesn’t promote over-reliance on technology (such as for creative processes) or disrupt otherwise thriving cultures and organizations,” the firm said. “The idea is to understand AI-related trends and implications and get ahead of these to capitalize on opportunity and mitigate risks.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Executive Editor; Lily Fauver, Senior Editor – Hunt Scanlon Media