A wake-up call for leaders

Change used to happen as a breeze. Now, it feels like a category-5 typhoon. A Tech Supercycle is underway, with a staggering investment in dollars, data, and processing power. AI is converging and multiplying in ways that will transform the global economy, scaling equity market capitalizations potentially to $200 trillion by 2035. If the war in Ukraine placed a spotlight on energy security and decarbonization, the pandemic accelerated digitalization and AI. AI adoption by companies over the next ten years will continue to grow exponentially, creating tremendous upside as newcomers leverage hyper-automation, decentralised leadership, and AI to boost profitability and deliver more business value. To put that into perspective, digital e-commerce giant Shein would now be worth the same as SpaceX, H&M, and Zara if these were combined. 

This is the new leadership logic: algorithms as a labour force and a winner-take-all effect. Welcome to leading in the ‘New Meta,’ which is like changing the rules of chess halfway through a game. It’s no longer organisations versus organisations: It’s return on intelligence because AI radically lowers an organisation’s cost base while augmenting human capability to address its most urgent and immediate business priorities, such as tackling low productivity. Imagine spending 30% of your week doing tick-boxing tasks with little or no value. This is the sobering reality for many of us. With AI as a co-thinker, it’s possible to automate low-value, routine tasks and reclaim more time to focus on problem-solving, strategic thinking, and high-growth initiatives that MIT researcher Cal Newport calls ‘Deep Work’ rather than ‘Shallow Work.’  The challenge for leaders is that you can’t scale an exponential human-led, AI-enabled future with linear thinking. Consider this scenario: If up to 30% of hours worked by employees today could be automated by 2030 with the adoption of AI, leaders must think differently. 

Like a phoenix – the mythical bird – leading at the speed of AI is about rethinking and renewing in cycles to create sustained value for today while remaining agile for tomorrow.

Making the Impossible, Possible

In GatesNotes, the blog of Microsoft co-founder Bill Gates, he writes: “Artificial intelligence is as revolutionary as mobile phones and the Internet.” AI is a code red for accelerated reinvention because it’s utterly transformational, a secular and structural megatrend, delivering breakthrough ideas and discoveries across domains that have never been possible. Take the drug discovery and development process, which can take over a decade and cost $2.8 billion. Adopting AI technologies led by companies such as AI-first biotech Insilico Medicine can yield “time and cost savings of at least 25–50%” in drug discovery up to the preclinical stage. This Cambrian Explosion is driven by visionary capital, staggering processing power, computer chips, and large language models (LLMs). 

The Cambrian Explosion refers to how life grew exponentially 500 million years ago and changed everything. We know the vital Cambrian eras of the last 500 years: Gutenberg’s printing press, the scientific and medical revolution, the industrial revolution, the mobile and internet, and now this moment. Frontier technologies such as AI require ‘frontier leaders’ who can adapt, improvise, and take concrete steps to adopt and operationalize AI while managing its associated risk.

Disruption starts at the edges and speeds up, impacting organisations on both the supply and demand sides. AI can replace large parts of an organisation by digitising and automating processes and tasks and re-platforming to the cloud. Companies are sitting on a goldmine of diverse data that is becoming more significant daily. AI will enable these organisations to move from spreadsheets to self-service analytics and data silos to speed-to-learning, ultimately reducing the time to prepare analyses and make decisions. Palantir Technologies is a data analytics pioneer whose early years focused on detecting fraud but has since moved into military intelligence and healthcare. Now, it is betting big on AI to escape macroeconomic headwinds. With its staggering leadership in AI and data analytics, there’s no reason why it could not disrupt the $700 billion global accounting industry. At the same time, text-to-video like OpenAI’s ‘Sora’ film generator could be the next Hollywood disruptor. Leaders can’t assume business as usual anymore. 

Disruptive forces akin to the ‘Amazonification’ of the global economy become the norm, leading to the rapid shrinking of companies, products, or job life spans and the need to embrace evolution continuously. Industry disruption is universal; any firm can drop from hero to zero regardless of market share and scale. The new reality means that leaders are now competing on Amazonification principles. Like the perennial disrupter Amazon, leaders must learn at the speed of the customer, crush bureaucracy, and embrace what the Austrian economist Joseph Schumpeter called “the gales of creative destruction.”

Amazonification principles:

• Economies of scale to economies of learning
• Supply chains to AI-driven supply brains
• Vertical power to horizontal trust
• Growth at any cost to humanity and ecology
• Fragmented control to networked resilience 
• Cultures of conformity to cultures of curiosity 

Imagine if Apple used its software muscle to disrupt the $2.86 trillion automotive industry or ChatGPT-Search upends Google’s multi-billion-dollar search business. Now, the disruptors are even being disrupted. Everything the internet did to music and newspapers now happens to every other industry. We’re operating in a world of venture-backed unicorns and decacorns like ByteDance’s TikTok and Stripe, transforming markets as varied as EV cars, fintech, and healthcare. 

To lead at the speed of AI, every leader must pay attention to the baseline fallacy, which is the assumption that the current leadership or business model is a low-risk bet until it isn’t, at which time it is too late to do anything. Remember when Netflix shares fell over 70%, wiping billions off its market cap? Longer-term sustained success becomes harder and rarer, and the risk of organisations being derailed by the baseline fallacy increases as disruption grows. Whether it’s the platformization of consumer financial services or the rise of the Tokenization Society, the disruptive trends driven by AI will only multiply. 

Leaders should always be cautious of hype cycles. Remember the Metaverse, Web 3.0, and NFTs? Contrast that to smartphones, e-commerce, and the race to the cloud, which have had much more lasting impacts on investment, the labour market, and the broader economy. How do we capitalise on these emerging disruptive forces and shape the future with bold intentionality?

Excerpted with permission from the publisher, Wiley, from The Upside of Disruption: The Path to Leading and Thriving in the Unknown by Terence Mauri. Copyright © 2024 by John Wiley & Sons, Inc. All rights reserved. This book is available wherever books and eBooks are sold.