High CEO turnover reached a new peak in 2024 with record departures according to Russel Reynolds. Shareholder activism and AI caused these exits says the report. Link to the report is at the end of this post
Businesses are being forced to rethink their business models. The Board is impatient because they want the CEO to drive the transformation in the shortest possible time. The shareholders want quick returns on their money and they want increasing payouts every time.
The human side of change needs time
- Employees
- New Skills: While AI may automate some tasks, it also creates new roles that require human skills like creativity, critical thinking, and emotional intelligence. The challenge lies in effectively reskilling and upskilling the workforce to fill these new roles. This can range from basic digital literacy to highly specialized AI/ML expertise.
- New Ways of Learning and Implementing: Even without complete job displacement, AI will likely change the nature of many existing jobs. Employees will need to focus on tasks that complement AI, such as problem-solving, decision-making, and human interaction. That demands investments in learning. Traditional training methods may not be sufficient. Employees need to adapt to continuous learning, on-the-job training, and collaborative problem-solving.
- Emotional Impact: Change can be unsettling. Employees may experience anxiety about job security, fear of the unknown, and resistance to new ways of working.
- Customers:
- Acceptance: Customers need to embrace the changes and see value in the new products or services. This requires effective communication, user-friendly design, and addressing customer concerns. Creating a pull for a product requires investing in building a brand the customers trust and love.
- Willingness to Pay: Ultimately, customers need to be willing to pay for the new offerings. This depends on the perceived value, competitive pricing, and overall customer experience. That needs time.
- Pace of Adoption: As you mentioned, human acceptance is often slower than the pace of technological change. Companies need to be patient, persistent, and adapt their strategies based on customer feedback. That needs time.
And yes, when you look at the shareholder and board’s expectation, most CEOs underestimate the human side of the AI transformation. It is a complex task. You need to do it fast in order to win in the marketplace but you need to take the humans along.
https://www.russellreynolds.com/en/insights/reports-surveys/the-transformation-of-the-ceo
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