AI puts every CEO on the hot seat
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Illustration: Aïda Amer/Axios
AI is shaking up the role of chief executive officer — with boards and employees putting CEOs on notice that they expect clear leadership around AI efforts and a cottage industry forming to support CEOs struggling with these new demands.
Why it matters: CEOs are in the hot seat because fast-developing generative AI has put tech back at the top of business agendas.
- AI cuts across business functions and industries and hands CEOs a change management challenge that some worry could cost them their jobs.
The intrigue: Globalization upended blue collar work, and AI is widely predicted to disrupt many white collar tasks — but until now few have argued that CEOs themselves are in AI's crosshairs.
What they're saying: Coursera CEO Jeff Maggioncalda tells Axios he is convinced CEOs are "not going to be able to palm the blame onto someone else" if they stay on the AI sidelines.
- "There's nowhere to hide," he says, "if you're the board, you're going to ask whether you can trust [the CEO]. You're going to ask, why are we still observers?"
- Maggioncalda said he's so convinced of this threat he created an AI course for other CEOs that launched this month.
HP CEO Enrique Lores connects the threat AI poses to CEOs with other major workplace shifts, like remote and hybrid work.
- Lores told an Axios audience at the World Economic Forum that those who fail to see these changes as related, and irreversible, "will not be in this room in a year."
- Clara Shih, CEO of Salesforce AI, told the same audience that "every single one of us will need to write a new job description."
- Hayden Brown, CEO of job marketplace Upwork, says CEOs need to drive a company's AI agenda, and shouldn't "outsource or delegate" it to technical teams or others, because AI "has such far-reaching consequences."
Be smart: Some critics argue that generative AI is overhyped and that adopting a new technology too soon can be a costly mistake.
- But Lareina Yee, a Bay Area-based senior partner at McKinsey, says it's risky to bet on being able to execute a "fast follow" — a quick response to a competitor that finds a winning AI formula.
- "Implementing generative AI at scale requires quite a lot of human change. It's not a technology application you just install, it's not a cloud migration," Yee says. "It's a higher order challenge than the technology change."
Yes, but: CEOs have some breathing room — boards aren't going to fire them based on hunches.
- Yee says they're likely to act only when they start to see a company falling behind peers by "a measurable and significant amount."
By the numbers: A recent BCG report on turning generative AI pilot projects into profitable products categorized 90% of 1400 surveyed senior executives as AI "observers."
- The survey also found that 2 out of 3 (66%) of executives are ambivalent or dissatisfied at their organization's AI progress.
- An Upwork survey of nearly 1400 executives found 73% of C-suite leaders said their company embraces generative AI, but found more dissatisfaction among lower-level executives — only half of whom agreed that their company was on top of generative AI.
The other side: CEOs also have to keep in mind the old adage that "the leading edge is the bleeding edge." Diving into a new market or technology early can be risky.
- Many organizations raced in 2023 to organize data and invest in generative AI projects — only for them to stall at the internal pilot stage.
