IBM: AI Challenges and Opportunities for Business Leaders

IBM Institute for Business Value's study shows the hard truths CEOs must face in the generative AI era
As businesses race to adopt Gen AI, IBM research reveals six critical truths leaders must confront to overcome workforce, cultural and governance obstacles

The rapid advancement of generative AI (Gen AI) has created a seismic shift in the business landscape. While the potential benefits are immense – from increased productivity to unleashing innovation – the road to successful adoption is riddled with challenges that business leaders must carefully navigate. A new study from the IBM Institute for Business Value has revealed six hard truths that underscore the workforce, cultural, and governance hurdles accompanying Gen AI implementation. 

The study of 3,000 CEOs across 30 countries identifies issues from people challenges to operations hurdles to data and technology limitations – all of which must be addressed to outcompete in the age of Gen AI. 

People and culture trump technology

According to the IBM study, 63% of CEOs in UK&I recognise that succeeding with generative AI hinges more on people's adoption than the technology itself. However, 64% admit to pushing AI rollout faster than some employees are comfortable with. 

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Inspiring a shared vision and facilitating collaboration between departments like finance and technology are critical for a smooth transition. Overall, CEOs say 35% of their workforce will require retraining and reskilling over the next three years – up from just 6% in 2021.

Workforce transformation on the horizon 

While 58% of CEOs are hiring for generative AI roles that didn't exist last year, over half haven't assessed the workforce impact yet. 35% anticipate reskilling or redeployment needs within three years. Attracting AI talent is challenging, with 50% struggling to fill key tech positions.

Governance gaps raise risks 

Although 75% agree governance should be built-in during design rather than after deployment, only 35% currently have robust generative AI governance. 71% say trusted AI requires effective governance, yet 64% are willing to take bigger risks than competitors to stay ahead. Balancing risks and rewards will be imperative.

Short-term focus hinders long-term innovation

While CEOs prioritise productivity and innovation, 44% would sacrifice operational efficiency for greater innovation. However, short-term performance pressures remain the top barrier. Finding the right balance between immediate goals and future transformation will be key.

As generative AI rapidly evolves, businesses face a profound shift in workforce needs, cultural mindsets, governance frameworks, and innovation strategies. Navigating these challenges proactively while capitalising on AI's potential will separate leaders from laggards in the emerging generative AI-powered economy.

“Our report features six hard truths for the CEOs who recognise they cannot run the business of tomorrow with the skills, processes or mindsets of today,” says Rahul Kalia, UK & Ireland Managing Partner at IBM Consulting. “For technology to transform the business, first the business must evolve. Success with Gen AI will depend more on employee engagement and a culture of innovation than the technology itself.”

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