AI Leadership Compass

The leadership tasks surrounding AI can be divided into 4 areas or compass directions of leadership in order to give concrete recommendations depending on the individual leadership task. The areas are: 

1. Strategic Management (AI for Executives) 
2. Operational team leadership (AI for Leaders) 
3. HR Management (AI for HR) 
4. Self-leadership for managers (AI and I) 

1. Strategic Management (AI for Executives) 

Keeping Investments in Balance 

Many top managers are currently carefully weighing investments in AI technologies against other strategic priorities. AI activism is just as damaging as a restrictive wait-and-see attitude. The use of AI is currently very expensive. License prices for AI add-ons are currently 3-4 times more expensive than a basic license for office software per user per month. In addition, intensive use of company-owned AI systems (CompanyGPT) results in high costs per prompt. Clearly defined pilot deployments in the company are recommended in order to be able to make the deployment decision based on your own data. It is often precisely this trade-off between time savings and quality gains in service provision vs. IT costs. However, such pilots have to be repeated constantly, as technical possibilities are developing rapidly. 

Promoting Executive AI Thinking 

Today, top managers must have a deep understanding of artificial intelligence technology, the business models behind it, and the strategy of AI providers. However, it often proves difficult to involve top management in typical learning situations. At WU Executive Academy, we offer a moderated, regular exchange on AI topics. These sessions are entitled "Executive AI Thinking." Such formats provide a platform for sharing knowledge, discussing innovative ideas, and developing strategic approaches on an equal footing. 

Creating AI Categories in the Company 

One result of the Executive AI Thinking described above can be the strategic structuring of the AI landscape in the company into 3 categories: 

1. Pure office productivity tools such as Microsoft Copilot, which increase overall efficiency and productivity in everyday office life. 
2. Company- and industry-specific special systems that address specific challenges, such as money laundering prevention, medical technology and forecasting systems with machine learning. 
3. AI-driven robotics for production, maintenance and manual customer service that optimizes and automates operational processes. 

This clear division into three parts enables targeted planning, implementation and optimization of the respective AI systems in the company. 

Monitoring the (AI) Competition  

AI increases the risk that your own product or service will be substituted and that new providers can more easily penetrate your own industry by using AI in research, production or sales. The following industries are currently particularly affected by an increased risk of change: 

• Financial Services : AI-driven fintech companies offer faster, more cost-effective and personalized financial services.  

• Healthcare : AI can diagnose faster and often more accurately than humans. New companies specializing in AI-based diagnostic and treatment procedures could challenge traditional medical device providers.  

• Retail : The use of AI in e-commerce improves the customer experience through personalized recommendations and optimized supply chains. Whereas products used to be "displayed" on the Internet using SEO (Search Engine Optimization), today the first companies are thinking about how to optimally position their products in AI tools using GEO (GenerativeAI Engine Optimization).  

• Manufacturing and Production : AI-driven automation and predictive maintenance can significantly increase efficiency. New market participants who use or offer these technologies could put traditional manufacturers under pressure to increase speed, quality and costs. AI-driven androids that can take over all manual tasks in production are already available from China at a unit cost of USD 16,000. BMW is currently testing the use of humanoid robots at the Spartanburg plant. 

• Logistics and Transport : Self-driving devices such as drones and optimized supply chains through AI can revolutionize the logistics industry.  

• Media and Entertainment : AI can create customized content. The AI techniques for quickly creating high-quality content and distributing it to target groups without news presenters, journalists and actors are getting better every month and hardly differ from their real-world predecessors.  

• Education : EdTech companies are using AI to create personalized learning platforms that meet the individual needs of learners better than traditional didactics. Creating learning videos with AI and, above all, keeping them up to date has become a real alternative. 

Bringing Cybersecurity to AI Level 

In collaboration with IT, it is the responsibility of management to further improve the company's cyber resilience. Typical first measures include the use of AI tools to facilitate prioritization of the thousands of cyber attacks that occur every day and thus be able to address the most dangerous situations. AI is also revolutionizing cybersecurity by analyzing user behavior and detecting system anomalies to identify suspicious deviations in network activity and uncover insider threats. Example: “CEO fraud” with voice clones or AI avatars in video conferences: Fraudsters use AI technologies to deceptively imitate the voice and appearance of a CEO in order to manipulate employees or business partners in fake video conferences or telephone calls. This technology enables the fraudsters to create the impression that they are giving authentic instructions from the CEO, which allows them to obtain sensitive information or initiate unauthorized transactions. Such attacks use the high credibility of AI-generated visual and auditory signals to gain the trust of victims and deceive them. 

EU AI Act Compliance 

A legally necessary task of top management is to ensure AI compliance for the EU's already adopted AI Act now in order to prevent later measures under organizational stress. This requires a thorough inventory of all existing AI systems in the company and documentation of the ethical considerations that were taken into account during their implementation. This preparatory work makes it possible to classify the systems into the four risk classes of the AI Act, which will be legally required from 2025 and 2026. As a positive side effect, internal company AI guidelines should be developed in cooperation with the human resources department to ensure the ethical and responsible use of AI technologies throughout the company. (See “AI for Executives” above) 

Merging Data Silos 

A special form of AI's promise of productivity for top management is the easier merging of existing data silos. Data harmonization and processing are cost drivers in IT and specialist departments and should soon be a thing of the past. Initial AI applications show a sensible blending of data from different sources and with different structures. This development (synthesis AI) needs to be observed and tested; in a few years it could mean a strategic competitive advantage for companies and organizations. 

2. Operational Team Leadership (AI for Leaders) 

Addressing Concerns, Taking Critics Along 

The increasing integration of artificial intelligence into everyday work is making many employees fear for their job security. It is the job of managers to take these fears seriously and to actively discuss them. Transparent communication about the role and benefits of AI in the company is crucial. AI should be seen as a tool to support and not as a replacement for human labor. At the same time, it must be made clear that AI will be one of the productivity drivers for any form of knowledge work. Those employees who take care of developing their AI skills and create a training plan for themselves together with HR and their direct supervisor will benefit. 

Promote Curiosity and Motivation to Learn  

In order to motivate employees to use AI, it is important to promote a culture of curiosity and learning. Team leaders should regularly agree on company training courses and workshops as part of staff development in employee discussions. The manager who continues to educate themselves is of course the most authentic here. An open and supportive environment in which questions can be asked and ideas tried out encourages active engagement with new technologies. This not only increases acceptance, but also strengthens the company's innovation potential. In concrete terms: AI Friday : A simple approach to promoting the use of AI in the company is to introduce a weekly "AI meeting", e.g. on Friday. On this day, employees spend an hour presenting AI tools or use cases that they have discovered or applied. This promotes the exchange of knowledge and experience within the team and inspires others to try out new technologies. Through regular presentations, the entire team is continuously trained and stays up to date with the latest technological developments. The team leader should develop an editorial plan here so that all colleagues can play an active role in peer learning over the weeks. 

Wild West Use of AI

The uncontrolled use of AI systems can entail significant risks. This particularly concerns the leakage of internal data and the violation of personal data protection. Managers must be aware of the AI guidelines mentioned above, implement them and monitor compliance with them. See also: AI for HR, “ AI guidelines” 

3. HR Management (AI for HR) 

Hire for Attitude, not for Skills 

When hiring employees, the focus is on the desired attitudes and behaviors (e.g. entrepreneurial, adaptable, stress-resistant) combined with AI skills that make it easier to learn new job roles. This trend is confirmed by the Work Trend Index 2024 (30,000 respondents): 66% of executives say they would not hire someone without AI skills, 71% say they would rather hire a less experienced candidate with AI skills than a (technically) experienced candidate without these skills. 

Provide AI Training 

To ensure that staff are familiar with the latest technologies and processes, training and further education should be offered on a regular basis. This training can include both technical and soft skills to ensure that staff at all levels are well prepared and can work efficiently. Based on the experience of the WU Executive Academy, a format ("triad") is proposed to enable cost-effective and individual training in AI skills even with a larger number of employees: 

• Asynchronous webinars and learning paths, such as those offered by mytalents.ai, enable participants to build knowledge individually, flexibly and independently of time. 

• Synchronous, on-site or online knowledge exchange formats such as the "AI Friday Hour" offer the opportunity to interact with others in real time and deepen knowledge. Managers can attend special programs such as those at the WU Executive Academy: AI Transforming Business: executiveacademy.at/de/programme/weiterbildung/digitalisierung-technologie/ki-transforming-business/ 

• 1:1 sparring with a peer or expert on call offers targeted support and enables more individual, needs-oriented knowledge transfer. 

AI Skills are Mandatory 

All companies and organizations must train their employees in AI skills from February 2025 (Article 4 of the EU AI Act). Detailed regulations are not yet in force, but companies are already starting to train their employees depending on how much they come into contact with AI. Especially with the widespread use of AI, as with Microsoft Copilot in everyday office life, it is the responsibility of the HR department to offer cost-effective and relevant learning paths for all employees. More information from the Austrian AI office: https://www.rtr.at/rtr/service/ki-servicestelle/ai-act/ki-kompetenz.de.html 

Define AI Policy with Top Management 

Establishing a clear AI policy in collaboration with top management is essential to provide clarity and thus reduce the psychological stress of using AI. According to the Work Trend Index, 75 percent of knowledge workers worldwide now use AI at work (Germany: 69 percent, Europe: 65 percent). 78 percent of these AI users (Germany: 71 percent, Europe: 80 percent) bring their own tools to work: Bring Your Own AI (BYOAI). As a result, many companies are currently missing out on the benefits of strategically using AI on a large scale and are exposing company data to the risk of leakage to AI systems on servers outside the EU. Internal voluntary policies, ideally developed in a participatory manner with employees, can help remedy this until the responsible use of AI has become the norm for everyone in the company. Today, and even more so in the future (e.g. EU AI Act, see “AI for managers” above), compliance with legal and regulatory requirements is crucial for the smooth operation of a company. HR compliance support can protect companies from legal problems and penalties and reduce the burden of mandatory reporting. 

Optimize Recruiting, Payroll and Employer Reputation Management with AI  

As in any specialist area, AI-specific applications can also be used in HR in recruiting, payroll management, the production of learning formats or employer reputation management. AI-based systems are already being used today to identify the best talent on the market or to generate optimal training paths. 

Example of recruiting with AI: JetHire.ai, led by Austrian co-founder Peter Jeitschko, makes recruiting easier through an innovative AI approach that goes far beyond conventional keyword matching systems. The platform analyzes resumes semantically and holistically, similar to a human recruiter, and evaluates not only skills and experience, but also the cultural fit of a candidate. This data-based, objective approach saves companies a lot of time in the pre-selection process while reducing unconscious bias. JetHire.ai thus promotes fair recruiting practices that both meet the requirements of EU regulations and meet the growing market needs for ethical and precise solutions. 

Prepare Organizational and Process Optimizations 

Long-term thinking: Many large companies are designed to handle repetitive processes through hierarchical team structures. After pandemics, economic crises and digital upheavals, AI is another driving force for smaller, autonomous units to meet constantly changing market demand. By preparing HR for future organizational and process optimization, companies can remain flexible and adaptable. The continuous analysis and improvement of internal processes with the help of AI and other technologies makes it possible to identify and exploit efficiency gains and innovation potential. 

Outlook into the Future: The Cloned Leader 

In the future, trained AI avatars could act as representatives of the manager. These clones would be available to team members at any time to discuss operational suggestions and offer support in their daily work. This would enable a new level of interaction and support when real contact with the team leader is not possible. Reid Hoffman, one of the founders of LinkedIn, has already tried out this technology. 

4. Self-Management (AI and I) 

AI also offers opportunities for personal development as a manager: 

Personally Save Time 

AI helps with the creation of concepts, presentations or speeches and makes it easier to get started with the subject matter and to carry out research. With structures, unexpected ideas, metaphors and motivating analogies, management communication becomes easier and more effective. AI now helps like a human assistant: dictations are processed and texts are generated. The formulation of sensitive emails is supported. Thanks to AI, the minutes of a meeting and the to-dos of all team members are available for approval by the manager three minutes after the end of the meeting. 

Using AI as Your Own Coach 

Tools such as PI.ai or GPT-4o Advanced Voice Mode are excellent sparring partners for managers and executives. How do the prepared arguments come across to the target audience, what steps do I need to take to defuse a conflict? How can I strengthen my reputation? The personal advisor is always available on your smartphone and can also be used for an inspiring dialogue while driving with a hands-free system or with headphones on the train. 

Try out AI Tools and Stay up to Date 

Only those who have tried out Microsoft Copilot for PowerPoint creation or have worked with a translation tool know the limits and potential of the tools. Trying things out yourself is the basis for a well-founded AI dialogue with employees and strengthens the authenticity of the manager. 

Building Business AI Competence 

Managers in all areas have to decide on the use and configuration of AI tools for use in the company. Only those who know the logic of the business models and the trends in the provider landscape can have a say here. An analogy would be a marketing manager who has no idea how an agency works but has to decide on a collaboration. 

What to Do With Your Free Time? 

Based on a one-year self-test conducted by the author, managers who are AI-savvy can save around 5 hours of time per week. But how do you use the time saved? The opportunity to be available to employees for discussions outside of day-to-day business and to think about the further development of individual team members would be a sensible, human-centered investment made possible by the use of AI. 

In summary, the use of this technology seems to provide a boost for managers to individualize leadership, improve the performance of the entire company, open up new career paths and also provide more humanity in real-life interactions with colleagues. Whether this becomes a reality is not decided by technology, but by us as managers in the company. 

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