Category:

There's another reason why human leadership has become so crucial to organizations these days. With the rapid onset of artificial intelligence (AI) and generative AI (GenAI) in the workplace, an increasing number of repetitive and analytical management tasks such as market analysis, project management, budgets, customer service, decision making, and fact finding will be handled by AI algorithms, assuming the software keeps improving. If you are a traditional leader who's great at numbers, planning, and scheduling, your job might be threatened. Going forward, the differentiating factor will be human leadership that gives people a sense of purpose and inspires them, and that cares about who they are and what they're thinking and feeling. Many employees today believe that much of the technical and analytical guidance they need is more easily obtained from AI solutions. A survey conducted by the research firm Potential Project found that employees already have more confidence in AI than in their human bosses in certain areas of leadership and in the management of certain tasks. Why not, if they can get the job done without feeling neglected or abused by their manager?

Tapping into AI alone, however, will not lead to high performance. What employees really long for in their leaders is development, experience, care, and wisdom. The best companies know that leadership—to put it pointedly—is about more than management; it is also about embracing the human element. They will combine the analytical advantages of AI with leaders who have excellent people skills to drive their organizations to new heights. AI can offer a twofold benefit. By supporting or replacing analytical and technical tasks, it can free up more time for leaders to spend on human leadership. Second, AI can provide analytical and results-oriented insights on the effectiveness of human-centric leadership, giving leaders constant feedback on the effectiveness of their human leadership style, on how they're leading from the inside out.

A leadership approach that balances financial performance, AI/GenAI, and people can not only help CEOs succeed in their jobs but can also pay dividends. That's because when human capital is managed the right way, the results translate straight to the bottom line. According to a 2023 McKinsey Global Institute study of eighteen hundred large companies across all sectors in fifteen countries, those businesses that focused on human capital development in addition to financial performance were roughly one and a half times more likely to remain high performers over time and have about half the earnings volatility. In fact, when the COVID-19 pandemic hit, they maintained profitability and grew revenues twice as fast as companies that focused mainly on financial performance.

* * *

In this book we explore how CEOs should lead themselves and then lead others through personal and organizational change. Learning, growth, and self-reinvention start with introspection, and the CEOs we portray in these pages have embarked on a profound exploration of who they are and what they stand for. Their stories reveal what they learned over the course of their careers, and how they've applied those teachings to real-world situations. Many of these stories come from our Bower Forum sessions, where typically three to five CEOs from noncompeting companies deeply engage with one another, privately share experiences and aspirations, and challenge one another on topics and offer advice, including how to lead from the inside out. These sessions operate under Chatham Rules, providing CEOs with a safe place where they can drop their public face and work through problems with peers who understand what they're going through. (We obtained permission from attendees whose stories appear in the book and disguised identities in a few cases when necessary.) A few select McKinsey senior partners act as Bower Forum faculty, and two experienced former CEOs cohost each event. (For more detail about how the Bower Forum works, see the appendix on page 248.)

* * *

The insights you'll read about in more detail in this book, which have come out of not only the Bower Forum but also from McKinsey's leadership practices, include the following:

* To combat the fact that no one would tell him bad news, the CEO of a media company cultivated "truth tellers" at every level of the organization.

* A CEO mustered the courage to feel that she belonged in a male- dominated industry.

* The head of a pharmaceutical company used a deep learning technique to predict the severity of the COVID-19 pandemic, which gave his company a jump on producing a new vaccine.

*The president of a large foundation overcame impostor syndrome, where she had struggled with doubts about her own abilities.

* To enable better decision making, an admiral who led U.S. special operations forces trained his teams to respond to changes in the terrain rather than to stick to a preconceived plan.

* The head of a major hospital found that the best way to lead is to connect with employees on an emotional level.

* By humbling himself and treating his employees like family, a CEO turned a manufacturing company around and then weathered the 2008 financial crisis without layoffs.

* The CEO of an auto supply company grew it into a global powerhouse by figuring out how to leverage the tricky psychological balance between motivating people and pressuring them to make the numbers.

* The leader of an industrial, aerospace, and defense company learned to become more versatile in order to build the new skills he needed to navigate a fast-changing world.

* Before coaching his top executives, a CEO of a global auto company took the time to learn more about their life stories and personal issues.