Every Leader's Identity Is About to Break. The Question Is Whether You Break It First.

Yeah. You made it.

I had made it. Um, but of course it was just the beginning of the journey and, um, the, the, the roles and the responsibilities that you have as, as a, as a partner in a, in one of the big four is significant.

hmm.

and that hit me so hard. I had no idea that this was gonna happen. That linear trajectory of continued success and, and, and improvement was suddenly, you know, taken from me

Hmm.

alongside 30 other equity partners that, that were also restructured at the same time.

Was this restructuring, uh, in itself a, a response to ai?

So a few things had happened. So of course, you know, a few years back, COVID happened. Best times in consulting, huge growth, revenue

Hmm.

So, yeah, that was the first part of the perfect storm. You know, my own identity crisis and re-imagining that. I think the second part had been, uh, the A large part of my last four years had been leading big transformation projects, uh, tech transformation projects, of course, AI being part of that and, and watching firms make huge investments.

hmm.

So that really led me to think what is, what is the reason for this? Why are leaders making so many bad decisions and not learning from those decisions?

Hmm.

And the third element of that perfect storm was, was really from the advent of AI and watching two divergent paths happening. One is that shortsighted approach of leaders looking for cost cutting and efficiency gain,

Hmm.

and using AI to replace tasks and processes and therefore cut people.

Hmm.

And they, they are typically a lot of the tech organizations, but it's not only limited to technology firms. We're seeing, you know, huge cuts at firms like UPS, Nestle. Um, and then of course, you know, tech firms like Microsoft, Salesforce, IBM today, uh, I saw 30,000 jobs going at another one of the big tech, uh, SaaS providers.

I, I think it in the, in the race logic, that is a lot of why we race towards task automation because it's very clear, it's quite linear in terms of the path to return investment, and you don't really have the time as the average leader to think about the second and third order consequences.

This is a, a big question. So I think if we go back to the basic learning architecture of most organizations, they typically have a COE Center of Excellence for Learning, often not always sitting within the HR department, and they've gone through generations, uh, all from the digital, sort of, even sometimes industrial revolution, but certainly the DI digital, um, uh, period of we need a filing cabinet, which is a learning management system.

Hmm.

And that was definitely a step forward. But what has never really happened is transition from learning, let's say in this filing cabinet to learning in the flow of work.

Yeah, exactly.

The organizations that are really starting to stand out, I think from a learning space, are ones that are moving from that carrot and stick approach to, ah, you've made this mistake.

And it's interesting, especially now in the, in the age of ai, because to me at least, it's not a. First off, it's not a, a, a one time and you're done kind of thing given how, how fast the technology is changing and the, uh, the way that you adopt the technology successfully is changing. Uh, so you can't really check the box in that sense.

yeah, absolutely. It makes me think of, of an example. So, um, I used to work for the company that was responsible for all of the training at Lehman Brothers,

hmm.

and watching an institution disappear overnight, uh, was was of course just incredible.

Yeah. Absolutely.

A week ago, or well a month ago I'd never even heard of openclaw

Hmm,

within a week of the announcement Anthropic then creates NEMO and is now available on everyone's desktops. The level of of change in the speed of advancement is, is extreme. And so for an organization to react to that level of change is really requires, uh, a very open mindset to, to learning and to accepting that knowledge is now democratized.

Hmm,

That control of, you know, that comes in a hierarchy, that I'm more senior, therefore I know more. Therefore, you do as you're told, that completely needs to disappear..

Yeah, absolutely. Uh, it's gonna be fascinating to see 'cause from, from the academic space now. I do hear more about, okay, we need to rethink organizational design, for example, and, and challenge the assumption of traditional hierarchies. I haven't seen it in practice yet. Uh, so, so we all kind of know. And this in general, I think it's so interesting now in the age of ai, the same was true when we started talking about like agentic systems.

Yep, '

cause it's been unchallenged since the 1850s.

Exactly. Absolutely. Yep. The, the, that were built based on standardization, so let's do more of the same faster. And then of course the digital revolution happened, which is more of the same thing, faster at a global scale with technology behind.

Hmm.

and they're trying to cut that to four.

Hmm.

So whether that ends up being successful, we, we don't know.

Hmm

Um, we've gone through various, uh, stages of organizational transformation org design, uh, from, you know, from, you know, scrum and Agile squads, and then teal and all these different approaches. And some have created disorganized chaos or organized chaos.

Whether that is successful, we, you know, we're still in the early stages of, of watching those types of things happen. I've been in strategy for forever, like 15 years and, uh, over those, uh, not forever, but for 15 years, over those 15 years. I would say that strategy completely without AI became more and more cross-functional for every year. And strategy horizons were, uh, shrinking in, in time horizon as well, and like plan planning cycles.

I would say it's is very similar to values and vision of a company. It's up on the wall. This is our, these are our values. Whether they're lived is a very different question. And I think the same thing would be from innovation, learning from failure. Um, they, most organizations say, yes, we want to learn, we want to iterate.

Yeah.

The reality, however. Is often very, very different.

Hmm.

And I think, you know, earlier in this, this conversation you, you talked about the shortening cycles of, you know, leadership. I think if you just look at a average tenure of a chief executive, I think it was around seven years, it's now dropping on average I believe to around two years.

Hmm.

And so if that's what's happening, there is an increase pressure on the quarterly and of course annual cycles

And culture is

And then you add on top of that the geopolitical instability,

Yeah. Absolutely.

the exponential improvements in technology, plus the huge investments that most firms are plowing into ai.

hmm.

And so that, that in itself is another perfect storm of pressure on organizations that, that, that then says, well, that five seven year cycle that we know is what is going to take time for the culture change, but yet we don't have time 'cause we've got shareholders, we've got our annual meeting and we need to show improvement.

Yeah, and I think it pivots us really nicely. Also, a little bit more concretely into to your book as well, because you talk a lot about. Traditional leadership behaviors in the human sense. For example, judgment is like the role of leadership doesn't change that much, but some things are increasingly amplified.

absolutely. Perfectly, perfectly explained. So what I did is I took it back to what I believed are those universal leadership

mm.

All leaders have always needed those. Whether they've had them is a different question and they are going to continue. But in the AI era where there is more data, more pressure, less time, uh, more information, um, more ambiguity, uh, and, and greater levels of, of uncertainty and change, how a, how a leader shows up and demonstrates those universal truths. Of course needs to adapt. And so I, yeah, so judgment by itself sort of transitions to judgment under ambiguity because I no longer can verify the probability this outcome, I can't verify the data this has come from because agents have perhaps given me this data or because I'm making a decision now that in the next month or two, the, the, the rationale for taking that decision could have changed.

Hmm.

to one of trying to assure the organization but not having certainty, not having absolutes. And I think that is a huge transition for most leaders to be comfortable with that level of ambiguity and change.

Yeah. 'cause you have most of, of the current generation leaders, and I'm not sure if most is accurate, but at least a lot of current generation leaders that became leaders as a consequence of being a deeper subject matter expert in my role. Uh, and I thought it was very interesting in your, in your book you mentioned it as there's a set of conductor capabilities, and I like the, the idea of leadership becoming more and more of a conductor in the H of ai.

you, you're absolutely right. I think in, in the past we look at those silos and then you, we could even call them kingdoms. So I'm the CFO, I'm responsible for my budgets within finance. I'm responsible for the team within finance and how we do our job. And that is measured based on a certain set of metrics.

Yeah.

And so the idea of conductor capabilities is exactly as you would imagine, that conductor creating incredible music with the orchestra. And the idea is that every single leader needs to move from that functional excellence to one that creates enterprise value.

what, what does stewardship mean in that context?

So I think that that maybe even comes back to the difference between a manager and a and a leader. Because a manager will tell people to do things, to do tasks and to be the the person who says yes or no to, to those, those roles. And, and, and a and a and a manager will often take credit when things go well or blame when things go badly.

hmm,

The difference for me with a leader is somebody who is guiding the team, who is wanting them to be better than themselves, wanting collective ownership within the team. And I think trust for me sits within that, that bucket that you are a steward of other people's trust. You cannot demand trust.

Hmm.

by saying and doing the same thing without the, the, the mixed messages. And I think learning has always been critical.

So, uh, kind of translating that over to the idea of the traditional manager being the subject matter expert, perhaps also being the least curious, which is super interesting now in the age of them, curiosity becoming a hyper skill and adaptive learning and, and kind of challenging, is this leader the correct steward then, uh, for, for this transition?

yeah. No, I love, I love that idea. And, and, and exactly as you say, I mean, most of those functional experts have got into a leadership position based on their knowledge. And now that that knowledge is democratized, I could be an expert in legal field, in hr, in psychology, in in finance quicker than I can get time in my manager's diary.

Yeah.

is no longer important, that the 20% that they need to be that real steward, that real, you know, leader who uses the judgment correctly under ambiguity, who is not trying to control who's, who's constantly adaptive to the, the changes that are happening, who is using judgment despite ambiguity. That is the type of leader who is going to remain and I think will reveal themselves as a great leader versus those who hold onto control and say, well, you need to, I need to approve this and you need to tell me where this data has come from. And that's the legacy management sort of type of, uh, uh, of manager that doesn't have the curiosity that you are, you're talking about.

Yeah. And it's super interesting as well. You can almost think about it as like the, the clock frequency or, or the heartbeat of an organization. So one of the things that is happening a lot quicker is like, how quickly can we get to a point of a, um, uh, like this is a new direction where a frontline level team wants to take a product or service or something like that, but they, they quite.

anthropic's a good example, they're, they're now doing weekly releases,

Yeah.

not annual, not quarterly, not monthly. Now, the risk of that, and we've certainly seen in the news in the last week, lots of, uh, leaks of code. So even if you've got incredibly competent workforce and you're working to, you know, to, to, uh, you know, using AI in the best potential that it was designed for, there's still gonna be governance, guardrail, control breaches and issues.

Yeah.

and those three things need to work in sync. So you can't just say, I've got a new idea. Go and do. Jeff Bezos a great idea. I think his number two said to him, you've got so many ideas you could break.

mm

So think about how you filter those through to the organization so that operations have time to catch up.

And then people have the ability to understand, you know, your creativity and your ideas. I'd love to bring in your, uh, SPAR Spar, uh, concept from the book. Can you explain what that is?

you know, a lot of companies go straight to the solution. They say, okay, AI is the answer. Let's implement AI and let's just change the organization.

Hmm,

And that's just, that's why we are seeing from MIT Gartner, various other pieces of research. The huge levels of failure, anywhere between 70 and 95% of all transformations don't, don't return the, the investment that, um, that the firms have put in.

Um,

So the partner with intelligence is using AI to improve yourself and to improve your team. And to think through very different perspectives that your team can, can and yourself. You know, you the leader, can work through collectively and transparently.

hmm.

Uh, and this is then sort of really tying into coordination, uh, shared ownership and making sure that you are not, uh, just working in, in a sort of functional excellence that we, we talked about.

Hmm,

And then the last stage of spa is then for flow. So how, once you've got all of those principles in place, how do you really reshape the organization? How do you have return readiness into results?

hmm,

And at the last part of this book, I, I worked with, uh, an incredible professor, Howard Yu, from IMD Business School in Switzerland, to work with him to understand from his research, what does a ready organization look like?

there's interesting things in all of these buckets. Uh, to me, let's begin with the identity question as leaders and, and again, asking you through the lens of AA learning and development, uh, professional where, where you think a lot about how can we scale behavior change. And to me, identity is such a personal question.

So, lemme give you a few examples now. I'll start with the personal and then maybe move to, to the enterprise because I think unless each leader works on themselves, the enterprise doesn't stand a chance. So if you look at pretty much any knowledge role, knowledge role at a task level that might between be between 30 and 50 tasks, that that role has

Hmm.

up to probably 70% of the majority of those tasks can probably be automated.

Correct.

So if that is the, the situation, I'll give you a really good example of a, uh, a lawyer I spoke to recently.

Hmm

He said, I love your book. It's absolutely brilliant. I love everything you're saying, but this is not, this is not important for me.

hmm.

He's an immigration lawyer. And where he saw his identity was in the fact that he knew absolutely everything about the laws that he was dealing with, about the, the, the potential, um, hurdles and loops that you need to go through to approve the, uh, the, the, the mobility, uh, process.

Hmm.

he realized that he fundamentally needed to change his mindset.

Yeah.

I couldn't get the last 10% right?

Hmm.

So I had to go to a really good friend of mine, a designer,

Yeah.

but the 10% is uniquely critical, and only a human can do that at this point in time.

Yeah. And I think what's exciting about that as well is 'cause, because most people that I speak to have a tendency to become quite afraid of the idea of 90% of, of the value that I bring is, is disappearing or, or becoming commoditized or, or price, uh, is, is approaching zero or the cost of compute. To me it's a little bit different.

Hundred percent. Hundred percent. So that's why I've called my company Elevate Potential. 'cause I believe empowerment is so much more energetic, fulfilling, and hopeful, as you say, rather than being like this lawyer where, yes, I think fear and the blinkers to say, I don't want to change.

Yeah.

That's unempowering. So I think two, two things I'll, I'll, I'll say to to, to this. I think first of all, a really good way of thinking about every single job role is what are those tasks that are going to be automated? AI can do your point about the PowerPoint slides or Excel spreadsheets and so on, they're disappearing.

Hmm,

And then I think to your point around hope and empowerment and agency, I thought I absolutely love is if you can make yourself 1% better every day, just spend half an hour learning, reading, playing with agents, playing with ai, thinking about your role, just 1% better per day that compounds over a period of a year to

Hmm.

actually mathematically to 38%.

Hmm.

so how are you gonna make yourself better in those areas? That I think is, is incredibly empowering to, to think about.

Yeah, absolutely. I lean on a similar framework that I, uh, stole or got inspired by Eric Brynjolfsson at Stanford, and he has this two by two matrix where he looks at task complexity. On one and, uh, the level of human judgment needed on the other axis. And then you get these four quadrants where bottom left with low complexity and low human judgment.

Yeah.

And

So you, you mentioned bias. Um. AI has its own bias. Humans have their own bias. And you know, if you are, take it to the very simple prompts, which is, I have this strategy, this is what I would like to do. Do you agree? Of course the prompt is gonna tell you, you are amazing. This is really good. Like how you think, and it might give you a little bit of challenge.

It's really important to learn that, that, that the bias is to kind of agree with you.

Absolutely. Yeah, yeah. Um, that is dangerous. Really, really dangerous.

uh, so, so one of the big kind of hidden use cases for AI is actually emotional support, right? So we've started seeing reports coming out of, of, um, the US where they see, uh, divorce rates increasing. And part of, of the explanation as far as I've heard it, is that spouses, they get emotional support on, on, on either end from the a from ai, and they start using their ais to communicate to each other.

Exactly.

Yeah.

Absolutely. So, so individual sparring is around being aware of those biases and asking for challenge.

Yeah.

I have this strategy. Tell me five things, why this won't work. Number one, use it for challenge. I talk about artificial ignorance,

Hmm.

incorrect, and it was all AI generated. So the person that we would've done that report would not have been able to argue their recommendations.

Hmm.

another one of the other chapters is on, uh, strategic decision making, and I bring in the, the idea of using four different voices into each of those, uh, decisions that you are, that you are making.

Yeah.

if I make this decision, okay, yes, I'm going to cut costs by reducing people, but actually what knowledge am I losing? What customer value am I losing as a result of that decision? And that's the, that's the, the rigor, um, that I'm advocating that every leader takes.

Hmm.

I, I think AI can be used, um, quite dangerously.

think it's Rory Sutherland, the, uh, British marketing guy. He has this, um, idea of that we kinda misunderstand the value of some roles when we look at it from this kind of cost cutting perspective. And, and the example that he'd bring is, is the doorman at a hotel. And this is probably a well known example, but I think it's very like, clear.

Yeah,

a sudden risking as well?

absolutely. And, and they're the hidden things that most organizations don't measure trust, uh, emotional impact, uh, empathy, psychological safety, decision making, uh, or trade-offs. You know, those are the things that humans are doing. And I, so I loved what Jensen Huang said, the chief executive of Nvidia, I think just a week or two weeks ago, he said, the leaders who are chasing that path, one, the, you know, the ones who are coming in and firing the, the doormans cost cutting automation, efficiency gain, what they want as leaders is more from less.

Yeah.

They want more profits, more revenue, more growth from less people, and by automating his reflection on that is that those types of leaders lack imagination.

mm.

He wants to double the headcounts. In Nvidia, he says that he imagines a future where one person is gonna manage, it's gonna manage a hundred agents. So if that is the way that he is opening, you know, an expansive mindset, which is I actually want to hire more people and I wanna automate all of the tasks, but I want those humans to be exceptional at those critical human skills. So your doorman, I need that doorman because without him or her, I've lost the trust, I've lost the connection with the customer.

yeah.

That is where AI can be used,

Hmm.

not just purely automation.

I've had similar conversations in the client work that I do at Grail as well, that it's fundamentally a lack of imagination that comes when we only see the, the path one in, in, in your words, uh, the, the automation. And, and yes, we need to do that. But what fundamentally is exciting to me is what used to be a scarce resource that suddenly isn't anymore?

And I think what they, they, when you have those opportunities, what you need to do is step back

Mm.

to consider the end goal. What is the value we are bringing to our customers? How are we creating the experience that we wanna create as a business without just saying, okay, we need to cut costs here, or we need to make this investment here, or we need to acquire this company.

how do you think about the kinda talent management question here? Because one of the things that I see a lot, or, or this is more like informal, uh, discussions that I have with like close friends to mine that are thinking about their, their careers at this moment in time and, and.

So I'll give you a, a an example just recently. So I spent nearly three months talking to a commodities trading business. And what they wanted me to do was to help them to bring the message to, to a town hall about the importance of learning of self-improvement, of career pathway conversations with your manager about trust in the organization and about using AI to make yourself better. And this is. This has been a conversation, I'd say nearly for three months. At the same time, this organization has invested over 10 million in copilot licenses, change management, telling people to use ai, telling people that they will be better with it. Now let's track your usage out. You are in the low, uh, distribution of usage.

hmm.

Two days before my presentation,

Hmm.

they called me to say, Peter, we need to cancel the presentation with tomorrow.

Hmm.

the impact on the business, firstly to those who are being restructured, but then secondly, to everyone who has left in the organization for a year, they have heard AI is good for you.

Yeah.

You are going to be better. You are gonna be smarter. You are gonna do your job quicker.

Hmm.

The entire culture of the organization. Literally in one decision like that. And then maybe the corridor whispers a month before the termination or the, the restructuring happens.

Hmm.

But then you take an individual perspective who is in that situation. To your point, they will say, this is not a business I wanna stay in.

They could be a high performer,

Hmm.

unknown to the leaders who make those decisions. Your high performers are then looking in the market for their next job.

Hmm,

Name it. Be transparent.

Yeah.

60%. I think. Well, the world economics said that at least 40% of what you are doing now is no longer relevant in four years time.

Yeah.

It could even be more. So we then, as leaders, have a responsibility to guide those people over that 1, 2, 3 year period to say, look, your role is fundamentally changing. You cannot think about your identity being roles and responsibilities.

It's such an interesting interplay between individual responsibility and organizational responsibility. 'cause I, I've been thinking about say that. Assume that it's correct, and I think it's correct that your role is changing, right? In one scenario, you're completely reactive as the individual. You're opening yourself up to the, the kind of, uh, cost cutting individual that comes with a clipboard and, and looks at your role as the doorman, uh, like reduces it down to something that's, that's easily measurable.

I, I would say to that chief executive, don't automate for the sake of it. Don't just invest because everyone else is investing and you're worried about being left behind. I had a conversation with a leader in an NGO, so a non nonprofit,

Mm.

and they were really worried that they're behind the curve. I said, it's the opposite.

mm

Um, but I would take it back to first principles, which is how are you bringing customer

mm.

value? How is your existing workforce doing that? And how can AI then be used to improve that experience and the value? So avoid isolated excellence.

hmm.

I can onboard the entire recruitment process. But if the data that sits there doesn't then transition to moving the right person around for new job opportunities and new skill building, if it doesn't go into the performance management of who should be rewarded for the right values, the right behaviors, and the right performance, if it doesn't go into, um, the learning team that then says, okay, these are, these are the skills that we need to hire.

whenever you work on strategy with a lot of companies, they, they like to point out the change that they need to make in order to become more competitive or something like that.

Yeah. Really good example. I, I, I, I spoke to, to one chief executive executive who had just literally acquired this business under huge pressure by the investors to cut costs. And he went exactly as you say to those first principles. If I automate this, I have lost the legacy of that relationship and the customer service, so I'm only going to automate part of it rather than the entire process.

Yeah, and I think there'll be a price premium on just humans moving forward as we automate more and more stuff. I had this really good conversation with a, a, uh, chief Revenue Officer where he said that when we look at how should we bring in AI to our sales and marketing organization, I see two paths. One path is kind of the traditional sauce playbook where we start to, you can, you can buy the service directly from the web.

Yeah. The, the example I mentioned earlier, this, this pharmaceutical business spent a billion dollars implementing a CRM.

Hmm,

Five years later, they are, they found that there is poor behaviors from the sales and the marketeers who are not inputting the information into the CRM. So no behaviors.

So, Peter, this has been absolutely fascinating. If you were to suggest maybe two or three Monday morning questions, things from the book to really bring with you into your kind of weekend reflections or your Monday morning meeting, what would that be?

I think firstly it would be to be proactive about your future. Be curious. Take the time to pause, take the time to reflect on your current identity. How AI is going to fundamentally change the roles that you're doing and therefore the identity that you, you have. and to give yourself that space to proactively think about what part is going to change, what's, which is gonna be automated, what should be augmented, and where you bring that unique value.

How would one go about doing that process? 'cause I could see two paths. One is AI might actually be a great thinking partner. You enter, I'm a marketing manager today. Let's deconstruct my role into tasks and look into like what should get automated and so forth. On the other hand, this feels like an exercise that you do on top of a mountain as well, like in, in complete digital isolation, just reflection.

I think it is a combination. I think you do need to pause. I do think you need space to do this because if we're all frenetic meeting to meeting no time to pause, you just keep doing what you've always done. 'cause that's got you there. Back to the very beginning of this conversation. That's what I was doing.

Hmm.

I just kept doing the same because it was a self-fulfilling prophecy. So yes, it is that top of the mo mounting experience of taking the time and the space. But it all is also going back to the basics, which is, okay, I am a marketing manager, this is what I'm currently doing at the moment. And actually why is a client coming to me?

Mm-hmm.

that human intervention,

Yeah.

rather than him holding onto his identity.

Hmm.

Don't accept that this is my role, this is what I've been hired into. Be proactive and think about how you can ask for a small budget or a sandbox to play.

Yeah.

Look at what you're doing, try to automate it. Create an agent. You can, everyone can just code their own agent, you know, within the constructs of the organization's security.

Yeah. Fantastic. And, and so, so lead with ai, stay human. Where can you find the book?

So you can order it in any bookshop. Uh, it's available globally. Uh, and then of course on Amazon and many, many online areas. And then@peterwhaley.com. you can also ask the book any questions, so peter

that, that that was

Yeah. Good. Thank you very much. I'm glad you enjoyed it. It's, um, yeah, it's, it's basically an experimentation myself to then say, look, this is, this is an open dialogue. You know, this is not read the book and now I'm an excellent leader. This is a continual process and you need to apply your real business challenges to the story that I've created.

Fantastic. Peter, thank you so much for coming on. It's been a pleasure.

Yeah. Really enjoyed it too. Thank you very much, Johan.