AI & Leadership in Contemporary Organizations

AI & Leadership in Contemporary Organizations

In this week’s post, Senior Business Advisor, Organizational Change Consultant, and Doctor of Business Administration (DBA) student, Jivi Saran, discusses the impact artificial intelligence (AI)—specifically the development of humanoid robot leaders—is having on the field of leadership and the practice of leadership in organizations. As a helpful resource for leaders exploring this area, Jivi has generously shared an annotated bibliography on relevant publications. Click here to access this bibliography. The School of Leadership Studies would like to extend our thanks to Jivi for sharing these resources and writing the post below.

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The integration of artificial intelligence (AI) into contemporary organizations is reshaping leadership, driven by Industry 4.0’s emergence and the subsequent focus on Industry 5.0, emphasizing intelligent machinery (Adel, 2022). Advanced AI technologies, embodied by humanoid robots like Sophia by Hanson Robotics, have transformed human-robot interactions, but they bring complexities tied to cognitive biases and emotional nuances (Arslan et al., 2022). Although AI excels in data analysis, its lack of interpersonal and soft skills underlines its role as a complementary tool alongside human leader (Abasaheb & Subashini, 2023).

Research on social robot-human partnerships demonstrates the potential for AI to boost productivity despite challenges like presenteeism, where employees work while not in full health, incurring hidden costs for organizations. Social robots engage with individuals, offering cognitive, motivational, and emotional support to help manage health and cope with job demands. They also complement interventions by human agents, enhancing productivity and vitality in the workforce. This highlights the therapeutic role of robots in human interactions (Lopes et al., 2023). In contrast, financial decision-making shows a preference for human finance advisors in high-stakes consultations, emphasizing the fine balance leaders in financial institutions must strike between efficiency and customer trust due to AI’s impact on consumer behaviour (Northey et al., 2022).

The disruptive entry of AI into industries has introduced novel considerations for leadership. Cichor et al. (2023) found that human reactions to robot leaders, like Pepper, are influenced by technological understanding and leadership style. Pepper was programmed to demonstrate both transformational and transactional leadership styles in a brief presentation. It was found that robots with transformational leadership styles are more readily accepted than those with transactional leadership, highlighting AI’s influence on how humans perceive robot leaders. Henderikx and Stoffers (2022) noted that digital transformation disrupts organizational structures, prompting middle managers to enhance digital intelligence and soft management skills. This includes coaching, motivating, and empowering employees, adding a human-ethical judgment to AI’s data-driven insights. AI reshapes leadership, emphasizing ‘altro-centric’ styles that prioritize collaboration, stakeholder connections, and meaningful delegation. These leaders act with maturity, integrity, and empathy, valuing relationships and interaction.

Der Val and Yan (2018) emphasized the transformative potential of AI in political governance, prioritizing rational decision-making. However, ethical concerns necessitate a robust legal and ethical framework. In contrast, Yam et al. (2022) highlighted potential drawbacks of anthropomorphizing robots, particularly in delivering negative feedback, stressing the importance of considering implications in workplace design and deployment.

In essence, AI is catalyzing an evolution in what leadership means, demanding leaders adapt to changes brought about by the introduction of robots in the workplace. Leaders must become agents of change in a VUCA (Volatility, Uncertainty, Complexity, Ambiguity) environment (Csombók, 2023), necessitating a “learning from the future as it emerges” mindset (Scharmer, 2016). Leaders must also redefine their roles within AI-integrated environments to collaborate effectively with advanced machines (Adel, 2022).

Based on these profound insights, visionary human leaders should diligently cultivate a versatile and dynamic skill set for better integration of robots within a hybrid human-robot team. The meticulously chosen acronym, ‘LEADERSHIP EFFECT,’ symbolizes the essence of leadership excellence, encapsulating the 16 pivotal characteristics that underpin success in this transformative era:

L: Learning Culture (Promoting Continuous Learning)

E: Ethical & Legal Awareness

A: Adaptability

D: Digital Strategy (Technical Acumen)

E: Emotional Intelligence

R: Relationship Building (Collaboration)

S: Strategic Planning (Strategic Thinking)

H: Holistic Innovation (Innovation and Experimentation)

I: Intuitive Leadership (Spiritual Intelligence)

P: People-Centered Approach (Including customers and employees)

E: Evolutionary Leadership (Forward-Thinking)

F: Flexibility (Adaptability)

F: Focus 

E: Empowerment (Leveraging Complementary Skills)

C: Change Leadership (Change Management)

T: Team Synergy (Collaboration)

References

Abasaheb, S. A., & Subashini, R. (2023). Maneuvering of digital transformation: Role of artificial intelligence in empowering leadership - An empirical overview. International Journal of Professional Business Review, 8(5), 1–18. https://doi.org/10.26668/businessreview/2023.v8i5.1838 

Adel, A. (2022). Future of industry 5.0 in society: Human-centric solutions, challenges and prospective research areas. Journal of Cloud Computing, 11(1), 1–15. https://doi.org/10.1186/s13677-022-00314-5

Arslan, A., Cooper, C., Khan, Z., Golgeci, I., & Ali, I. (2022). Artificial intelligence and human workers interaction at team level: A conceptual assessment of the challenges and potential HRM strategies. International Journal of Manpower, 43(1), 75–88.

Cichor, J. E., Hubner-Benz, S., Benz, T., Emmerling, F., & Peus, C. (2023). Robot leadership–Investigating human perceptions and reactions towards social robots showing leadership behaviors. PLoS One, 18(2), https://doi.org/10.1371/journal.pone.0281786  

Csombók, J. (2023). Challenges of transformational leadership in the digital age: The role of moral trust in maintaining transformational approaches [Thesis, Universitätsbibliothek der HSU /UniBwH]. https://doi.org/10.24405/14925 

Der Val, Z. V., & Yan, Y. (2018, October 17). Could robots do better than our current leaders? World Economic Forum. https://www.weforum.org/agenda/2018/10/could-robot-government-lead-better-current-politicians-ai/ 

Henderikx, M., & Stoffers, J. (2022). An exploratory literature study into digital transformation and leadership: Toward future-proof middle managers. Sustainability, 14(2), 687. https://doi.org/10.3390/su14020687  

Lopes, S. L., Ferreira, A. I., & Prada, R. (2023). The use of robots in the workplace: Conclusions from a health promoting intervention Using social robots. International Journal of Social Robotics, 15(6), 893–905. https://doi.org/10.1007/s12369-023-01000-5 

Northey, G., Hunter, V., Mulcahy, R., Choong, K., & Mehmet, M. (2022). Man vs machine: How artificial intelligence in banking influences consumer belief in financial advice. International Journal of Bank Marketing, 40(6), 1182–1199. https://doi.org/10.1108/IJBM-09-2021-0439  

Scharmer, C. Otto. (2016). Theory U: Leading from the future as it emerges (2nd ed.). Berrett-Koehler Publishers.

Yam, K. C., Goh, E.-Y., Fehr, R., Lee, R., Soh, H., & Gray, K. (2022). When your boss is a robot: Workers are more spiteful to robot supervisors that seem more human. Journal of Experimental Social Psychology, 102. https://doi.org/10.1016/j.jesp.2022.104360