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Do you feel like a surfer staring at endless waves as you contemplate the ocean of business possibilities from generative AI?

You’re not alone. The latest iterations of generative AI, from ChatGPT to GitHub Copilot to Stable Diffusion and others, have leaders contemplating three options for their next move. You can 1. stick your head in the sand; 2. try to invest and capture value from every aspect of generative AI; or 3. insightfully select the right options that serve your customers, improve your operations and make best use of your personnel.

Unless you have unlimited capital and resources, I recommend Option 3.

In Option 1, John notes that “My Dad started this business 40 years ago without generative AI. I’ve run it the last 20 years without generative AI, and I can run it another 30 years.”

That will lead to ruin. Eventually, the tide will come in. John’s business will drown. I give John 5 years max.

Option 2 looks enticing, and even I have to contain my excitement at the possibilities. A recent McKinsey analysis, “The economic potential of generative AI: The next productivity frontier,” examined 63 use cases and concluded that generative AI could add $2.6 trillion to $4.4 trillion in value annually. And generative AI can play in any sector – the McKinsey report detailed use cases in retail and consumer packaged goods, banking, pharmaceuticals and medical products.

But that wave likely leads to a wipeout as well.

Susan may think her organization can handle everything, but few enterprises can afford to hire enough people and throw enough money at the massive quantities of computational power required to train generative AI with the however many billions of parameters necessary to tailor it to every aspect of your operations. And today’s high interest rates preclude going into massive debt.

OpenAI spent a staggering amount of money to develop ChatGPT, and the world’s most famous large language model costs a bundle to operate. Estimates for OpenAI’s daily spend are all over the map, from $100,000 a day to $700,000 a day. And the company may have lost a staggering $540 million last year, including $89.31 million on staff.

Earlier this year, Microsoft confirmed it has invested billions in OpenAI. Unless Susan’s business can tap into some of the billions of dollars venture capital is pouring into generative AI, her enterprise will burn through its cash reserves before seeing enough benefits.

After all, if you look closely at the McKinsey report, 75% of generative AI’s total impact will come in customer operations, marketing and sales, software engineering, and research and development. The potential for generative AI in manufacturing and supply chain functions is much lower.

Supply chain and manufacturing still will benefit from AI, according to the report, but that benefit will come from “numerical and optimization applications that were the main value drivers for previous applications of AI.”

So Felicia, who picked Option 3 for her consumer packaged goods firm and concentrated on automating key functions in customer service, marketing and sales, will be the likely winner.

For leaders, the right strategy is to transform your business into an AI enterprise. The danger is staying onshore or trying to ride every wave you see. I think 50% of businesses will be like John, 40% like Susan and 10% like Felicia. Insightful Leaders will follow Felicia’s path and select the most lucrative generative AI waves to ride. Make sure your organization is on the right wave.

A new day. Another report. And more data to prove business will never return to the “old” normal.

Virtual working has permanently altered business travel, according to CNBC. The sector has stagnated, and many of those who fly are choosing economy class over fancy business and first-class digs.

This, obviously, forces airline leaders to rethink any strategy that banked on high-flying business travelers. For the rest of us, when I look back, I wonder what I was thinking for the previous 40 years.

A world of virtual, remote and hybrid work clearly was possible before the pandemic. Skype has been around for 20 years – almost old enough to legally buy a cocktail. Internet chat debuted in the 1980s. Many of the tools were there. The only things lacking among the executive set were Insightful Leadership and imagination.

As I wrote in Insightful Leadership, for 40 years I spent 3-5 nights and 40-plus weeks a year in airplanes, airports and hotels. That wicked pace of travel has dropped to about 3-5 nights a month. Beyond that, I’m not commuting to an office – unless you count walking up the stairs a commute.

What has this “disruption” done to my productivity? It has easily doubled.

I’m not the only one. CEOWorld Magazine mentions numerous studies that show remote work beats in-office productivity. This research comes from august institutions like Stanford University and the National Bureau of Economic Research, not the feelings of a Tik Tok star. From IT to finance to consulting to software, case after case abounds showing that remote employees are happier, more productive and more satisfied with their work-life balance.

And yet leaders still have their heads in the sand. Headline after headline reports that executives want their charges back in the office, under their thumb. And the U.S. Survey of Working Arrangements and Attitudes shows a continual decline in the percentage of hours worked remotely, from more than one-third at the beginning of 2022 to 28.4% last month. When I downloaded the data, I did note that hybrid working arrangements have ticked up to 31.5%, so that’s a positive.

Look, I’m not necessarily here to tell you how to run your business – but of course, if you connect, I’m sure we will have productive conversations. But I’ve started multiple enterprises since 2020. All have been fully remote and capable of sourcing talent from across the globe, not just those within commuting distance. I’m astounded at the results and continue kicking myself for not realizing we could have had the “new world” years ago.

The choice is yours.

It’s nearing the summer of 2023, and companies worldwide continue trying to return to pre-2020 – the Old Path of leadership.

Unfortunately for them, two irreversible conditions prevent that possibility: the reinvention of work and demographic change.

First, despite leaders’ desire to lure/encourage/mandate workers back into the office, the Old Path of commuting to work for a 9-to-5 is dying. Forbes reported that 50% of executives want their charges back in the office. But only 12% of employees want to be back in the office full time. While big tech companies are laying people off, smaller, more nimble enterprises are offering flexible or remote arrangements to lure talent.

Second, aging baby boomers who leave the workforce take institutional knowledge with them. But they are living longer, and many really do not want full-time retirement. The Wall Street Journal recently had an excellent set of interviews with baby boomers who plan not to retire. The great majority enjoy contributing and consider the continued mental stimulation preferable to sitting in front of a TV, atrophying in body and mind. As Nancy Murphy told the newspaper: “I’m enjoying the human interaction and learning. With the new flexible workplace – one of the few positive outcomes of the pandemic – spending time with family, traveling and many of the joys of retirement are now available to the working.”

Options for remote and hybrid work, flexible schedules, fractional executives and gig work can keep many of those baby boomers around as they onboard the next generation of leaders.

The Old Path of forcing them back into the expensive city or into lengthy commutes will push them out the door. That goes double for younger workers, because as I noted in Insightful Leadership, many view a corporate 9-to-5 as living death. Entrepreneurship exploded during the pandemic, and new business applications are showing signs of a significantly higher baseline than pre-2020.

On the other hand, the New Path of Insightful Leadership embraces both the reinvention of work and the need for change in the face of demographic realities.

Just because your team is not one in the same conference room does not mean your team is not together. Video conferencing, chats, communications technology and even the old-fashioned phone call can keep everyone connected. In fact, since executives do not have to spend their days on the road and their nights in hotels, productivity can increase while quality of life goes up – a win-win.

Changing how you used to lead may require you to also embrace coaching and training, leadership and organizational redevelopment and organizational transformation. But such a New Path is the only way forward.

The pace of disruption has required an increase in the pace of innovation.

Unfortunately, the pace of innovation means leaders seem to spend much or all of their time fighting the fires of disruption, slowing your ability to innovate and create. Can you as a leader relate to the situation below?

A strange thing happened Tuesday in the supply chain planning department of ABC Company. Between 2:30 p.m. and 3:30 p.m., there were no crises, no fires to fight. Everything worked. The leaders took a deep breath, looked up from their computer screens and thought: “What now”? It had been several months since their pants were not on fire.

John checked his LinkedIn account and found 143 messages and 47 invitations to connect. Mary peered into her data science reports that she had not had a chance to review for several months. Bob dove into his file cabinet and eliminated a whole trash can of files. Now, once again, he can file things without his fingers sticking between the folders.

And then there was Anna, who stared out the window and reflected on the old days of 2019 and before. Prior to the advent of perpetual disruption, Anna spent several hours a day trying to innovate and create enhancements in productivity and customer satisfaction. She reached for her innovation folder and discovered that she had not touched it in 9 months.

Do you recall the good old days when you had time to be innovative and creative? When on a regular basis you actually worked on making your company better? That seems like so long ago.

Everybody agrees innovation is important – here are 13 good reasons alone from The Business Journals. And here is some information from Forbes on how to encourage employees to innovate.

But for yourself as a leader, why don’t we just pretend that between 2:30 p.m. and 3:30 p.m. today (or next Tuesday if today’s calendar is already booked with fires), there are no crises – that we actually have the time to THINK about innovations and how to add value.

I know, a weird thought, but it may be interesting to give it a shot. You may turn an hour of thought into a solution to a problem. Not having that problem next week will actually create two hours for innovation. Just like the good old days.

A friend of mine told me he recently lost 50% of his team when 7 out of 28 found new jobs.

The math, at first, did not make sense – last time I checked, 7 was not 50% of 28.

“Yeah Jim, but those 7 who left contributed 50% of my team’s productivity,” he said.

That’s a conundrum facing employers everywhere these days. As Business Insider just reported, despite all the hubbub about how employers seemingly are back in charge, companies simply do not have enough talent for the tasks they need done.

Yet we still get articles like this, discussing how “the bosses” feel more empowered to claw back some of the power they had before the pandemic-fueled remote/hybrid work explosion. Even worse in my opinion, The Wall Street Journal’s Chip Cutter notes, companies are laying off people without laying them off – shifting back to requiring workers back in the office, reassigning employees to other projects or even other locations, requiring managers to give employees poor performance reviews – in general, treating employees poorly enough that they want to quit.

Besides that, entire sectors seem to have settled on an arbitrary percentage of workforce reductions. For tech CEOs, it seems to be 6%, even though the companies in question have different business models, income statements and balance sheets. It’s like industry leaders are just following the herd, as Fast Company magazine reported.

Look, I get it. Dire economic predictions abound, and the economy of early 2023 is not like the economy of 2022, 2021, 2020, etc. You want to keep investors happy; you want your company to increase efficiency; you do not want unnecessary costs, employee or otherwise.

But arbitrarily picking a headcount and driving people out the door is, frankly, dumb, dishonest and can backfire.

How do you think I feel about how you just treated Charlie? I’ve worked next to him for 10 years. We’ve secured multiple deals and run many a successful project together. You’re going to make him move from Chicago to San Francisco to keep his job?

Seeing this, I might start looking for my own exit. Others on Charlie’s team might feel the same way. Cohesion and institutional knowledge fly out the door with key team members, and that stellar team’s performance plummets. That’s how you lose 7 out of 28 people and half – or more – of your team’s productivity.

To be fair, these reports do note that risk – your highest-performing employees are often the ones who can easily find work elsewhere. And in a world of “known uncertainty,” finding people who can do the work is still a struggle.

So do not follow the herd. Look at your balance sheet, cash flow, productivity, what projects your teams are handling, and make a decision. And if you must trim your workforce, do it honestly.

Do bosses realize the world has changed?

Everywhere I look, from The Wall Street Journal to CNBC, managers – I hesitate to call them leaders – are demanding that knowledge workers return to the office. After years of freedom and flexibility, employees are, not surprisingly, pushing back.

From Alaska to Florida, from Disney to Apple, employees believe they are more productive, have better work-life balance and are happier with remote or hybrid options. And you know what? The data backs them up. Fortune reports that productivity jumped when offices abruptly closed in 2020, stayed high through 2021, then dropped in 2022 when bosses started ordering their charges back to the office.

Face it. The definition of work – how we get things done – has changed. So the definition of leadership has changed. Therefore, leadership’s role has changed. Remote leadership is a different beast than leading everyone in office/cubicle world, so leaders must adapt. Remote work begets higher productivity and less time on meetings and commuting. The definition of work is different; therefore the definition of leadership must be different.

My latest book Insightful Leadership has an entire chapter on this (“Paradigm Shift: Sorry Boss, Your Office is Dead to Me”). At Tompkins Leadership and Tompkins Ventures, we have onboarded two companies virtually in the last three years.

I long ago came to the conclusion arrived at by Fleetcor CHRO Crystal Williams. She told Chief Executive magazine that the “‘five-days-a-week, nine-to-five in your office’ cubicle model is dead – or at least, it’s dying. If you don’t provide some flexibility, you’re not going to attract the best and brightest.”

I want the best people in the best roles, unlimited by geography or commuting time. Today’s technology allows that. Really, remote/hybrid work could have accelerated years ago if the bosses had allowed it.

Work-life balance is not about the hours at the office vs. the time at home, but about the harmony and satisfaction people have both in work and personal domains. It is a balance between home and family, health and well-being, career and community. Spending hours commuting does not fit that model, and the free coffee and doughnuts at work do not change that equation. Free coffee vs. your family? Get real.

Many of the company executives interviewed by Chief Executive’s C.J. Prince seem to have it right. See what you can learn from AllState, Embrace Pet Insurance, Blue Yonder and others.

At home, I can wake up, prepare for meetings, fix tea, have breakfast with my family, and then walk back to the office. That’s a quality of life I did not have for years.

Tompkins Leadership, Tompkins Ventures and many other insightful organizations are not going back to the past. Neither should you.

The evolution of business has added another “R” to the Insightful Leadership playbook.

No, I’m not talking about the reading, writing and arithmetic many of us grew up with in the U.S. public school system. I’m talking about Retention – the ability to keep good, productive employees once you have found them, particularly if you are expanding your organization’s DEI (Diversity, Equity, Inclusion) efforts.

Since beginning Tompkins Ventures in 2020 and Tompkins Leadership in 2022, I attribute much of our substantial growth to our embrace of the post-pandemic virtual world. Our staff is spread across multiple states, and our partners cover every continent except Antarctica.

But first, let’s go back to the 20-year supply chain evolution of EERR, which in 2023 has evolved into EERRR:

• Efficiency: When coined in the early 1990s, supply chain’s entire concept was reducing costs.
• Effectiveness: By at least 2005, most organizations used visibility to work together, collaborating on sales, out of stocks, snags in deliveries, adding value to your partners and your customers.
• Respect: In 2020, when the pandemic, decades of digital innovation and geopolitical/financial crises combined to break the world’s supply chains, leaders gave supply chain the respect they deserved – respect, in this case, means paying attention to and elevating Chief Supply Chain Officers (CSCOs) to the C-level.
• Resiliency: In turn, those CSCOs are adding resiliency to their organization’s supply chains, aiming to handle the perpetual disruption mentioned above.
• Retention: The above 4 points of evolution matter not at all if you do not have the organizational muscle – RE, staff members – to get work done and serve your customers.

We have tackled staff Retention with a lot of the tried and true – treating workers as humans, not cogs, listening to their concerns, communicating through a variety of tools. But we have also embraced the virtual office, much to the pleasure of our staff. We could not have assembled our roster of international talent by requiring them to schlep to a downtown office every day. In my view, there are only three reasons to go back to office:

1. To entertain your boss. Bosses want people to boss around and micromanage.
2. To let your boss practice the ancient (2019) ritual of staff meetings.
3. To gossip and spread rumors.

I mean really, if you want to talk to me, isn’t 1-on-1 better? And can’t we do that on Zoom, Teams, Slack, Webex, etc.? Half the people you talk to will be on one of those platforms anyway, so it does not matter if they are in the office next door or half a world away. And if your workers require micromanagement, you should not have hired them in the first place.

Embracing this flexibility will be more important as organizations expand their DEI efforts. Data from Future Forum reveals that underrepresented groups desire more flexibility: “88% of Asian/Asian American respondents, 83% of Black respondents and 81% of Hispanic/Latin respondents report preferring hybrid or fully remote work arrangements, compared to 79% of white respondents.”

So if you want happier, more productive staff – not to mention wasting less money on office leases – look for ways to add more remote work to your organization.

What does good leadership look like in a world of perpetual Disruption? A study by Korn Ferry gives us some clues, according to The Wall Street Journal.

Leaders must build “a more caring and empathetic workplace” to thrive, according to the study, which blended the Drucker Institute’s statistical model for corporate effectiveness with 34 separate metrics and more than 20,500 psychometric assessments of CEOs and other leaders.

The results? As Rick Wartzman and Kelly Tang report, a list of 20 traits and 30 competencies deemed common to companies who rank high on the Drucker Institute’s model.

Important for an age where Assumed Certainty has transformed into Known Uncertainty, ambiguity now places in the top five for both categories. “Tolerance of ambiguity” still “had the strongest positive correlation … with the Drucker Institute’s best-scoring companies, just like it did in 2020’s top five traits. But “manages ambiguity” was a new entry in the top 5 list of competencies.

Other new entries in that top five list of competencies included “Global perspective,” “interpersonal savvy” and “instills trust.” They replaced “builds effective teams,” “drives engagement,” “communicates effectively” and “cultivates innovation.”

The report defines traits as “personality characteristics central to who a person is,” while competencies “are observable skills that come naturally to some but can also be attained and honed with experience.”

Personally, I think “cultivates innovation” remains a top competency. And I find it extremely interesting that “curiosity” replacing “openness to differences” was the only change among the top five list of traits.

Either way, the results are clear. In a world where Disruption is the new normal, leaders must be prepared to handle ambiguity.

The first month of the year always features a deluge of articles, news stories, blogs and podcasts looking back on the previous year – month-by-month comparisons of 2021 and 2022, benchmarks for the year, how to apply those learnings to 2023.

Hey, Hey – wait a minute! Have we forgotten the lessons of 2020-2022 already? 2023 will not be a repeat of 2022, give or take 3-5% for strategic planning purposes. As we know from my book Insightful Leadership, the future is a departure from the past, not a continuation. The Assumed Certainties of the past are now the Known Uncertainties of the future.

Today, Insightful Leaders need to use the foresight they have gained through their years of experience to develop insight into what Disruptions are going on to progress into Tipping Points, harness the power of those insights to identify paradigms that are no longer correct, developing a strategy to replace these obsolete paradigms, and deploy those insights to disrupt the status quo on the way to competitive advantage and major success.

So yes, look back at what happened in 2022 and years prior. It does give you a baseline. But unlike the past, that baseline does not give you 95% accurate assessments about your business plan and operations. A better figure would be 5% certainty, 95% uncertainty.

Don’t let the waves of Disruption sweep away your organization’s future. Take much of that time you would have spent on all the discussion of the past and invest that time in thinking about the future.

In leadership, subtraction can be its own reward.

I recently received two reminders that less is more from The Wall Street Journal: “Bosses Promise Jobs with a Coveted Perk: Boundaries” by Lindsay Ellis and “Why Bosses Should Ask Employees to Do Less—Not More” by Robert I. Sutton.

Ellis tackles a subject of increasing importance to leaders over the last few years: work-life balance – or, as my Tompkins Leadership colleague Julio Neto calls it “life balance.” Her article quotes numerous leaders, employees and potential employees to respect and enforce work-life boundaries.

This drive by leaders not to burn out their employees is essential. After all, Harvard Business Review reports that employee burnout costs organizations $125 billion to $190 billion a year in healthcare spending, and that doesn’t include the costs of lower productivity and higher turnover.

Yes, many organizations need to worry about The Great Resignation and Quiet Quitting. But you and I know that high-performing organizations still attract talent that wants to work, wants to succeed and wants to make a difference. Often, such talent needs to be reminded to take a break – for their own good and for the organization’s future.

For his part, Sutton’s article summarizes a lengthy body of research that shows how humans (bosses and workers) tend to equate adding more – more staff, software, meetings, rules, training – with creating success. Often, more just creates more bloat, bureaucracy, complexity and burnout.

His point is not that organizations need to do less, but that removing the unimportant excess frees your staff to spend more time on complex, important tasks. This is near and dear to my heart because it’s reminiscent of the Pareto Principle, a tenet of my industrial engineering education at Purdue University. In manufacturing (and many other venues of life) 80% of the errors can be corrected by fixing 20% of the causes.

Making sure your staff can concentrate on the vital few instead of the unnecessary many could be the key to success.

So the next time your organization hits a bump in the road, a thorny problem or an immovable bottleneck, the answer, perhaps, is to take a step back, remove some rules, and subtract instead of add.

A key to leadership is how a leader allocates time and resources. In today’s world, the norm of perpetual disruption challenges leaders every hour as competing activities force them to make tradeoffs on how they allocate time and resources for themselves and their organization.

Great leaders realize that focusing on Important, Long-term and Strategic activities will result in the greatest success moving forward, but it is extremely difficult to withstand the call from Urgent, Short-term and Tactical activities. Realistically, few have adequate resources and time to do all.

In addition, the Disruptions of the last few years (VUCA – volatility, uncertainty, complexity, ambiguity – lockdowns, hybrid schedules/remote office) have dealt an unprecedented rate of change to our leadership teams, making them less aligned than ever.

So you face a two-headed Leadership Quandary of capacity and alignment. If you slow down, contemplate and reflect, increasing your team’s leadership capacity is the only lasting solution to this Leadership Quandary.

Therefore, Leadership Development must be your organization’s No. 1 priority. This is an urgent need in a time where all organizations need dynamic, Insightful Leadership more than ever. Only by developing more leadership capacity can leaders handle all the challenges the organization faces while simultaneously harvesting all the opportunities before them.

In my view, internal mentors and internal development resources are inadequate for addressing this two-headed Leadership Quandary. Your leaders need true Leadership Development, not executive management training. Your leaders need coaches who develop their leadership abilities with insightful questions, not mentors who tell your leaders what to do.

Want to discuss this Leadership Quandary further? Amazingly, whenever I spend time with fellow seasoned leaders, we always end up discussing how our proudest, most successful moments in business came from when we dedicated our time to developing leaders and high-performing leadership teams. Happy to share with you more thoughts on Leadership Development, coaching, artificial intelligence coach-bots and more. Send me a message and we can find a time to chat.