Navigating the AI Revolution in People Leadership: Secrets of a Chief People Officer

Artificial Intelligence (AI) has rapidly transitioned from a futuristic concept to a present-day reality, impacting every facet of business, including HR. As Chief People Officers (CPOs), we're no longer just overseeing talent and culture—we're at the forefront of a technological revolution that promises to redefine how we work. The AI conversation is not only relevant; it’s imperative for the future of people leadership.

Why This Matters Now: Insights from the Frontlines

Over the past several months, I've had the privilege of attending multiple round-table discussions with fellow CPOs and technology leaders, where the topic of AI dominated the agenda. These conversations, held under Chatham House Rules, revealed the breadth and depth of both excitement and hesitation among leaders. It extended to some organisations investing significantly in use cases on multiple levels — how they can improve the employee experience and bring efficiencies in delivering this —t o some organisations watching on the sidelines, focused solely on the challenges that today’s economic climate is bringing to operating costs.

Additionally, my recent deep dive into various podcasts—featuring insights from thought leaders like Josh Bersin — further highlighted the urgency and complexity of AI in the workplace.

All of what I am hearing isn’t just theoretical. According to McKinsey’s?The State of AI in 2024?report, AI adoption has skyrocketed from 55% to 72% of companies within just a year, largely due to Generative AI tools like ChatGPT and Co-Pilot. Yet, despite this rapid uptake, many organisations are still in the early stages of understanding AI’s full implications.

But the conversation extends far beyond how HR can leverage AI. As CPOs, we are not just stewards of the people function; we are strategic leaders within our organisations. This means our engagement with AI must encompass its wider implications across the entire business. AI is set to redefine job roles, organisational design, and even the fundamental way our companies operate. The shift isn't just about automating HR tasks—it’s about reshaping the enterprise to harness AI's full potential.

CPOs must lead the charge in understanding how AI impacts everything from operational efficiencies to customer interactions and employee experiences. Our role involves asking critical questions: How will AI-driven efficiencies be reinvested to create additional value for both internal and external customers? What new ethical considerations arise as AI becomes more embedded in our decision-making processes? And how do we ensure that the human element remains central as AI takes on a larger role? The latter two I have been spending time discussing with the founders of Sprout AI Studio , who have this at the very heart of their manifesto.

These questions are not just pertinent—they are crucial as we navigate this transformative era. As business leaders, CPOs need to be at the forefront of these discussions, ensuring that our organisations are not just adapting to AI but thriving in an AI-driven world.

The AI Opportunity: Beyond Efficiency

While the efficiency gains from AI are undeniable, the real question CPOs should be asking is: What value does AI create, and at what cost? The insights from these round-tables suggest that AI's true potential lies not just in streamlining processes but in transforming the way we approach work. However, as we tread this path, it’s crucial to balance automation with the human element, ensuring that AI complements rather than replaces human interactions.

For instance, SAP's recent restructuring, which involved cutting 8,000 jobs while simultaneously creating new roles focused on AI-driven business areas, illustrates the double-edged nature of AI advancements. This move, aimed at aligning the company with future needs, underscores the importance of reskilling and repositioning the workforce rather than simply reducing headcount.

The Human Factor: Addressing Employee Concerns

The insights from the round-tables also echoed a growing concern among employees regarding AI’s role in HR. A SurveyMonkey study found that 54% of workers are uncomfortable with HR using AI, and 45% worry about job security. These concerns highlight a significant gap in communication and education within organisations. As CPOs, we must not only advocate for AI but also demystify it for our teams, ensuring transparency and ethical use.

Ethical usage of AI is a critical component of this dialogue. Employees are rightfully concerned about how AI might be used in decision-making processes that affect their careers, from hiring and performance evaluations to promotions and terminations. The risk of AI perpetuating biases—based on the data it has been trained on—is a significant ethical issue that CPOs must address head-on. This brings a whole new skill set to the HR function, which we must learn how to do correctly.

To build trust, CPOs should ensure that AI tools are transparent and that the data driving these systems is robust, unbiased, and ethically sourced. Moreover, it’s essential to maintain a human-in-the-loop approach, where critical decisions are always reviewed by a person to mitigate the risk of AI making errors or reinforcing systemic biases. It’s not just critical decisions either— for example it’s also about correctly applying employee right, policies, procedures and complying with local laws. There are some remarkable use cases emerging, such as organisations using agentic AI to allow employees to ask questions about policies, procedures, and their rights. However, training that agent to answer questions correctly is key. One organisation I spoke with has had success here in the UK, but again, it’s a whole new skill set for the HR function to ensure that the agent is trained at the level needed and that its knowledge is maintained.

Furthermore, CPOs should be proactive in establishing clear guidelines and policies on AI usage, emphasizing fairness, accountability, and the protection of employee rights. Regular audits and transparency reports can also help in reassuring employees that AI is being used responsibly. Engaging with employees directly—through workshops, forums, and open discussions—can further demystify AI and address the ethical concerns that often accompany its deployment. Many organisations are setting up AI working parties with a cross-section of employees that report into the Executive team and Board on a regular basis on their findings and progress.

Rethinking Job and Organisation Design: Lessons from SAP

AI's impact extends beyond efficiency gains and touches the very structure of our organisations. SAP’s restructuring strategy is a clear example of how AI can drive both the elimination and creation of roles, fundamentally altering job design and organisational structure.

However, it’s important to temper expectations about the future of work. While some might envision a future where robots and AI systems perform most tasks — an idea often associated with Elon Musk's vision of automation—this isn’t the full picture. As humans, we are inherently driven by purpose and the need for meaningful engagement. AI and automation will undoubtedly reshape our work environments, but they won’t replace the human desire for connection, creativity, and purpose.

In fact, the real challenge for CPOs lies in integrating AI into the workforce in a way that enhances human roles rather than diminishes them. SAP’s approach of balancing job cuts with the creation of new AI-focused roles is a step in this direction. It underscores the need for organisations to not just automate for efficiency but to redesign jobs that allow employees to engage with technology meaningfully, maintaining the human-centric aspects of work that are essential for motivation and fulfilment.

The conversations I've had with other CPOs indicate a growing need for hybrid roles, where AI and human skills work together to enhance the employee experience. This aligns with the desires of Generation Alpha, who value human interaction and social skills in the workplace. Therefore, CPOs must focus on creating roles that leverage AI for efficiency while preserving the interpersonal elements that employees value.

Preparing HR for the AI Revolution

To effectively integrate AI into HR, CPOs must take a strategic approach, recognising that this isn’t just about implementing new tools—it’s about transforming the entire HR function to align with the broader organisational goals. Here’s my insights on how to approach this transformation:

1. Baseline and Measure:?Start by mapping current processes and tasks to understand where AI can add value. This involves a thorough assessment of the HR functions that could benefit from AI, such as talent acquisition, employee engagement, and performance management. By establishing a baseline, you can measure the impact of AI over time, ensuring that any changes lead to real, quantifiable improvements.
2. Hypothesise and Experiment:?Develop hypotheses about AI’s impact on specific HR functions and test them through small-scale experiments. For example, you might hypothesise that AI-driven analytics can improve talent retention by identifying at-risk employees earlier. Running controlled experiments allows you to validate these hypotheses, refine your approach, and scale successful initiatives across the organisation.
3. Collaborate and Learn:?Engage with peers, employees, and industry experts to share insights and stay ahead of AI developments. This point cannot be overstated—collaboration is crucial. The pace of AI innovation is relentless, and no single organisation has all the answers. By fostering a culture of collaboration, both internally and externally, CPOs can ensure they remain at the cutting edge of AI integration. This involves not just networking with other CPOs but also engaging in cross-functional teams within the organisation, participating in industry forums, and staying informed through continuous learning. By doing so, CPOs can build a knowledge base that is agile and responsive to the rapid changes AI brings.
4. Reskill and Reposition:?Like SAP, invest in reskilling programmes to prepare employees for new roles created by AI advancements. As AI reshapes the workforce, the demand for new skills—particularly those that complement AI, such as data analysis, digital literacy, and complex problem-solving—will grow. CPOs must lead the charge in creating learning and development programmes that equip employees with these skills, enabling them to transition into roles that AI cannot fully automate. This proactive approach not only mitigates the risks of job displacement but also positions the organisation to thrive in an AI-enhanced business environment.

The Path Forward

As AI continues to evolve, so too must our approach to people leadership. The CPOs who succeed in this new landscape will be those who view AI not just as a tool for efficiency but as a catalyst for creating value, enhancing employee experiences, and driving organisational growth. But beyond this, CPOs must embrace their role as key business leaders—partners to the broader C-Suite—who are responsible for guiding the entire organisation through this transformation.

In this capacity, CPOs are not just the stewards of the people function but are instrumental in shaping the strategic direction of the company. This involves helping other C-Suite executives understand the wider implications of AI, from operational efficiencies to the ethical use of technology, and ensuring that the organisation's approach to AI aligns with its long-term goals and values.

By fostering a holistic understanding of AI’s impact across the organisation, CPOs can support their peers in making informed decisions that will shape the future of the business. This includes rethinking organisational structures, redefining roles, and ensuring that AI is integrated in a way that enhances the company’s ability to innovate and compete. The journey may be complex, but by staying informed, collaborative, and committed to our core values, CPOs can lead the way in navigating the AI revolution and ensuring that the entire organisation emerges stronger on the other side.

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