The Executive Ejection Seat

You’ve heard it for years: Gen AI will likely replace millions of workers. But leaders may be on the chopping block, too—including the person in the corner office.

Indeed, to the surprise of many experts, the economy and the stock market apparently aren’t the main things keeping CEOs up at night. A remarkable 70% of chief executives say they expect someone from their level to be ousted this year over AI strategy; worse, 74% wager that the ousted executive could be them, if they don’t deliver measurable AI gains within the next two years. All this is according to the new Global AI Confessions Report: CEO Edition produced by the platform Dataiku. “The skills to lead the organization through AI transformation may not be skills the current leader has,” says Shanda Mints, vice president for RPO analytics and implementation at Korn Ferry. 

To be sure, CEOs can feel vulnerable; in fact, a Korn Ferry study found that seven in ten have so-called imposter syndrome. But AI creates a new degree of pressure: With companies pouring billions into the technology, stakeholders are increasingly demanding to see results. Problem is, the technology, despite its high cost, isn’t likely to provide financial returns in one- to five-year horizons, says Paul Fogel, a sector leader in the Professional Search, Software practice at Korn Ferry. “There are a number of CEOs who are in trouble, and they’re right to be concerned,” he says, adding that boards will eventually hold leaders responsible.

As a result, many leaders are stuck in a no-win situation. On the one hand, AI presents a fantastic opportunity to reengineer processes and strip costs and redundancies from systems. But it also might not work immediately or smoothly. “There’s the theory, and the practicality of doing it, and a gap between the two,” says Chris Cantarella, global sector leader of the Software practice at Korn Ferry. If a CEO doesn’t make the workforce reductions enabled by AI, the firm could be beaten by competitors; but if the CEO shrinks the workforce, and AI doesn’t live up to expectations, they’ve got expensive problems. “There’s going to be a lot of waste, and you don’t want to be on that side of the curve,” says Cantarella.

One enormous hurdle is time. Gen AI has only been around for a couple of years. “This is playing out at a pace faster than we would have predicted even a year ago, and it isn’t yet translating into much quantifiable business benefit, which is causing frustration,” says Bryan Ackermann, head of AI strategy and transformation at Korn Ferry. Over the last several months, he says, executives have widely accepted that gen AI is not going anywhere, so they have shifted focus to how the technology will change their products, services, and industry. Yet best practices still aren’t in place for projects into which firms are funneling billions of dollars. Another hurdle is that many projects in the works will be redundant in two years. “CEOs know this, and it causes anxiety,” says Cantarella.

Experts advise that leaders hedge their (enormous) AI bets by surrounding themselves with the best possible advisers—people with diverse capabilities extending far beyond one type of engineering. Discussing these projects with everyone from contractors to fellow CEOs is the path forward, say experts. And above all, leaders need to end their longstanding practice of delegating technology shifts to tech executives, and instead spend their sleepless hours making themselves AI literate—a new level of expertise now essential for most CEOs. “This is a dangerous one to delegate,” says Ackermann. “These are profound leadership decisions.”

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