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Leadership in an AI world

Real Conversations podcast | S5 E23 | December 14, 2023


Paolo Gallo is Adjunct Professor in Leadership & Organizational Behavior at SDA Bocconi University in Milan and has served as Chief Human Resources Officer at the World Economic Forum in Geneva, Chief Learning Officer at The World Bank in Washington DC, and Director of Human Resources at the European Bank for Reconstruction and Development in London.

AI has become the hot button issue of the moment. Highly respected professor and HR leader, Paulo Gallo, discusses the implications for management and how the move to machines must make us more human. 

Below is a transcript of this podcast. Some parts have been edited for clarity. 

Michael Hainsworth: There is little doubt that artificial intelligence will change the way we work. Paolo Gallo is the author of "The Seven Games of Leadership, Navigating the Inner Journey of Leaders" and he emphasizes the increasing importance of human qualities in succeeding in this world, arguing that empathy, collaboration, and caring are what make us truly human and can't be replicated by AI.  So how would he describe how artificial intelligence is changing the world of work, in which we live today, and will live in the world of tomorrow?

Paolo Gallo: Massively, in one word. But if I had to expand in a few seconds, I would say that the qualities that make us human are going to be more and more relevant going forward. What I mean by this is empathy, collaboration, understanding, caring, and the capacity to engage with people in a meaningful way. This is something that I believe is going to be more and more relevant going forward.

MH: This sort of speaks to the idea that artificial intelligence is going to take things away from us or take them off our plate as workers. But at the same time, there will always be something that an artificial intelligence machine learning algorithm cannot do, and it is empathetic, be collaborative and care.

PG: Absolutely. I mean, I will give you one story, which is a couple of decades ago an anthropologist called Margaret Walt was asked the question "When does civilization start? People said when they invented trade or currency people started to exchange goods and services. And she said about 50,000 years ago, they found skeletons where we found traces of bones being cured. After a certain moment in civilization, when somebody got injured, he or she was left alone dying, and there's a moment in civilization where we started to care. We started to take care of the people that were injured. This is the moment when civilization starts. Civilization starts when we start to care. And equally, you can say the visualization stops being there when we stop caring.
So, care is not just a condescending approach to humankind. It's understanding other peoples' viewpoint and understanding that perhaps all the people that think differently from us deserve to be listened to. Without that capacity, nothing will be solved, and I think we have seen ample examples of the terrible consequences when we don't listen to people that don't think the way we do.

MH: I find it tremendously ironic that as we talk about the next major leap in technology and the next major leap in the evolution of the workplace, that it's not about technical transformation as much as it is about the transformation of ourselves, because empathy, collaboration and caring are not things we're taught in business school to focus on. It's about being competitive. It's about getting the edge over someone else in the workplace. For generations we have been taught to always look out for number one.

PG: Michael, if I could, I would give you a standing ovation because that's exactly what I would say and what I did write in my own book. And I give you maybe a 30-second story and an emphasis on the word transformation you just used. I remember perfectly what my first day at work was. It was February 1st, 1989, at Citigroup. Okay? I was 23 years old; I was in New York and just graduated from Bocconi and I felt like the king of the world. And somebody entered and it was a bunch of people called executive trainees recruited from all over the globe. There were about 120 of us at that time. I remember I was the only one from Italy and our starting salary, I still remember was $24,000, which was not a lot of money even then. And the guy, the person that I met first, said, "Okay guys, think about your salary."

And we all thought about 24,000 because we all started with the same salary. Multiply by four, and if this is not your salary within two years, you're just a loser. And so, for the very first second, the idea was that success equaled making money, and I was 23 years old. And so, I got an injection of competition first day of school if you want. Now fast-forward 35 years later, I'm a 60-year-old guy and I believe that that input was completely wrong. I'm not saying that money is not important, but I think that we need to understand that competition and elbowing others is the recipe for disaster, stress, burnout, and fundamentally for societies that don't work. So, what we need to do, and you've used exactly the word I used many times in my book, is to understand the difference between change and transformation.

Change is something that occurs outside you and change management is not easy. For example, when you change house, you change jobs, you change country, you need to go through a process of adaptation. Transformation, you need to change. And to understand the complexity of what's happening around you, the first thing that you need to transform is yourself. So, the book that I wrote, the Seven Games of Leadership, is focused on understanding the different phases of a transformation that we must go through to develop ourselves as an individual. And only and exclusively if you do this, you're a credible leader. If not, you're just a person in power.

MH: So, when leaders are navigating this transforming world and they themselves are dealing with change and they must transform themselves, how do you develop yourself as an individual? How do you go through those personal growth phases to step away from that previous generation attitude of competition and pivot towards collaboration?

PG: There is a phase, I call them games because there are some rules that govern every single step in your journey. It's called the crisis game. And the crisis game occurs to everybody. I jokingly say, listen, the crisis is like Easter, you don't know the exact date but it's coming, okay? And what I mean by this is sometimes around the early to mid-forties you scratch your head, you've already played half of your professional life in a certain modality with competition, great determination, and hard work, and you still have probably 20 if not more years in front of you. And you go through a crisis. Crisis is a Greek word that implies the necessity of a decision.

How you deal with this crisis defines the difference between navigating or just floating or thriving and continuing to grow as an individual. To me, the element that allows you to grow as an individual is understanding that a crisis is a wonderful moment of reinvention and the losses that you have incurred in your life. And when I say losses, I mean not financial losses, but difficult moments, which are an integral part of your growth as an individual. Not something that you have to avoid, deny, or maybe just go back to regression by pretending to be a 30-year-old person when you may be 50. So, I think I have had the good fortune to work with hundreds of leaders, and the ones that I believe are true leaders are the ones that have mastered this capacity to manage the crisis in a meaningful way.

MH: Well then in the age of artificial intelligence, what are the responsibilities of leaders for the future?

PG: Well, I think the responsibility of leaders is to understand that they have a responsibility. What I mean by this is there's a lot of debate about delegating tasks, many things that will be done by artificial intelligence are fair enough. And maybe certain tasks are fine to delegate machines to do it. But the ethical dimension of decision-making has to remain with the leader, has to remain squarely within the mind and the DNA of a leader or a leadership team in organizations. And so, to me understanding leadership is equal responsibility, it's not equal power or compensation, is not so obvious in the mind of many leaders that I met in my life. fact, I don't consider these people as leaders, I just consider people who end up being in a power position, but they're not leaders at all.

MH: You've told me that when it comes to being a leader of the future, you have to be optimistic, but we need to define the term optimism differently from what we might normally assume it means.

PG: I mean the overall idea in the conventional truth is optimism is things will go the way you hope. And even in my own country, Italy, during Covid, everybody said, [in Italian], "everything will be fine." That would be wonderful to think that that would be the outcome, but we learned that this is not the case. So, optimism is not things will go the way you hope they will go.
The optimism of a leader is to say we will find a meaningful solution, whatever happens to the organization. And a meaningful solution is not necessarily what we thought of at the beginning, but it's something that you built along the way with the people that you collaborate with. So, optimism is not like [in Italian], everything will be great, but to say we will find a solution together if we have the decency, the integrity, and the time, and the depth to discuss it and to work together for building and shaping something different that now perhaps we don't even imagine.

MH: This brings us back to something we had talked about a little bit earlier. You say that finding meaningful solutions requires collaboration. That again is something that we were not necessarily taught when one became a leader. This attitude of a top-down approach to decision-making within an organization and as a way of directing individuals is something that you're saying that we need to sort of set aside and recognize that collaboration is the key, not a dictatorial response from above.

PG: Absolutely, Michael. I appreciate your question because in my book I try to explain it in two different ways. And the first one is to say, if we look at the way we are developed, when we're born, we are in a dependency mode. We depend on our parents to take care of us. Then sometimes as a teenager or later, you start to think that you can be totally independent. Of course, we know that this is not the case when you are 15 or 18, and I'm going to say this because my daughter, she's 18, so that's exactly the moment that we're living right now. It's a beautiful moment. But eventually you end up being independent financially or logistically, etc, and you think, yeah, I'm an adult. I'm now independent. Okay? But then the real maturity of a leader occurs when you understand that while you're not dependent anymore, you need to become interdependent. Interdependent means you need to collaborate with different individuals, so different parts of the organization, in order to succeed in your role.

The other dimension is understanding that in the past most of the problems it would be nice to collaborate and solve were very, let's say, complicated problems. And a complicated problem requires technical expertise. So, if tomorrow, for example, my TV is broken, I need to get somebody who knows how to fix it. It's a complicated problem for me because I have no idea how to fix it and I need an expert that is very good at fixing TVs to solve it. The point is if you think about Covid, artificial intelligence, the jobs, the war in Palestine, in Ukraine, and climate change. All these problems are not just complicated, they're complex. And complex implies there are different elements in the part, all of them with a part of the solution and the solution occurs exclusively if you collaborate with people around the table.

Collaborating doesn't mean that you love each of the people around the table, but it means that you must sit down and listen to find a compromise that is meaningful for everybody involved. If you don't listen to anybody's part and you think that you own the truth and everybody else doesn't, you're not a leader. You're not a leader. In my view, you're just something different that doesn't work.

MH: But there is a perception that adoption of artificial intelligence in the workplace means that AI is going to make the decisions for us, and that collaboration isn't relevant because we've got this machine that's spitting out the answers for us. We just need to follow the machine.

PG: Well, if a leader abdicates decision-making, they in my view should not be considered a leader and should be removed immediately. Or you can say, listen, there are some decisions that it's fine to me for artificial intelligence to make. There are some that I want to retain. And maybe let me give you a very stupid example. When I drive, I put YouTube and YouTube knows the songs that I love, and next thing I know I listen to Bruce Springsteen, Bob Dylan on YouTube and Pink Floyd because the system will learn that that's the music that I listen. And that's fine for me to delegate YouTube to choose my songs.

But do I need to delegate artifice intelligence a decision about who to fire, who to hire, who should be promoted, who should be my ally maybe in a synergy in my own company? If a leader believes that that decision is not pertinent to him or to her, but is pertinent artificial intelligence, frankly the person should stand up and leave the chance to somebody else. Leadership is about responsibility and accountability. It's not about power and money.

And in my book, I try to explain the difference between visibility and credibility, and these are two different things. And so, credibility to me is mostly related to ethical behaviors, the stuff from decision making.

MH: Accountability and responsibility. What about ethics? What role does that play in being a leader in a world where artificial intelligence is going to try to take more of my day-to-day life off my plate so that I can focus on other things?

PG: In a way I may be naive, but I like to think that if artificial intelligence is removing, let's go into this way, the operational dimension of my role, I can focus on something more strategic and foresight and human, I welcome artificial intelligence. So, in a way, I don't need to waste time doing stuff that is repetitive and laborious and maybe tedious. And I have atrocious attention to detail. So, it's probably a very welcome dimension, that allows you to think a little bit more about all the stuff that is more relevant.

MH: So, as we've talked about the evolution of leadership in an artificial intelligence world to be more focused on empathy, collaboration, caring, accountability, responsibility, and the ethics associated with it. What about the flip side? What about the employee side? What about those underneath the leadership pyramid? What role is there for loosening control over those employees, giving them the ability to take greater responsibility for the evolution of the workplace? Every time we talk about taking responsibility off the plate of a leader, some might push back saying, well then, I'm no longer in charge if I am focusing on these other aspects. If I am loosening that control, if I'm giving the employees the agency to make decisions for themselves, what's my role in all of this?

PG: Again, another fair and meaningful question, Michael, and I appreciate this and perhaps I can dust off my former role as an HR director for maybe too long, for 17 years. And I met thousands of people from completely different sectors and nationalities, and political or sexual oppression, for instance. So, I had a large variety of conversations over the years. No? And I really believe that we are also accountable for our own professional growth. Okay? Yeah, of course the manager, the organization, provides hopefully the investment, that safe space or the psychological safe space to do it. But the responsibility to grow professionally is mainly related to the behavior and the mindset of the individual. And in my book, I try to provide, I wouldn't say a magic formula because it's nothing magic, but a bit of common sense to help people to navigate in that specific dimension.

And I keep on asking people, say, how do you increase your professional value? And people start to think about my salary. So okay, I'm making a hundred thousand, I want to make 150. How do I make an extra 50K? To which, if the question is do you want to earn more money, the answer is yes. But this is the wrong question. The right question should be how to increase my value, how to increase the value that I provide to the community that I serve, to my colleagues, to my clients, and how I continue to be relevant regardless of what's happening in technology, or artificial intelligence. Personally, and believe me, this is not something I figured out yesterday, but it's something that I've been thinking and watching studying and debating for three decades. I think there are three elements that each of us should focus on clearly to continue to be relevant in the job market.

The first one, what I call knowledge capital, is the knowledge that you have as an individual, but knowledge has to be translated into something concrete. And I jokingly say, listen, if I were to say to you guys that I know by heart every recipe of the Italian cuisine, you'll be impressed. But if I were to say I never cooked anything, you would be less impressed. What I mean by this is whatever knowledge you bring, you must prove that it provides some value to the people that are eating, not just theoretical knowledge.

The second one, I call it relationship capital, which is fundamentally the number of people who know you and the number of people who trust you. Knows you - I make the difference between visibility and credibility, not about the number of people following you on LinkedIn. It's more about the number of people that know you are a trustworthy individual, and they call you back if you call them or vice versa. So how many people do you have that fully trust you? And how many people do you have that you fully trust? This is a huge, let's say, capital that you have.

Now, if you put the two together, and you sum it up, you have to multiply by your reputational capital. And reputation, as I said earlier, is what people say about you when you're not there. The reason why I'm in this form, as I share in my book, is because if your reputation is zero, it doesn't matter how many people you know and how much you know because the reputation is zero. So, protecting your reputation is essential. And don't forget that what is legal is not necessarily let's say acceptable. So don't confuse reputation with legality because reputation is something more profound related to human qualities.

MH: So then when it comes to the skill sets that are required for an employee to remain relevant in an AI-assisted workplace, is it just a matter of, well, sorry, you got to go back to school, you got to get yourself another degree?

PG: No, not necessarily. Whatever decision you take, try to understand who the people or the organization are that will be impacted by that decision, and then reach out to them to find a meaningful solution for everybody involved. And let me give you a practical example. I've been head of human resources for many years, and once per year, I needed to go to the board to propose salary increases. Okay? Well, I need to talk to the board, everybody on the board. I need to talk to the unions. I need to talk to the chief financial officer. I need to talk to the leadership team and to the president. I need to have salaried service. I need to talk to my competitors, and I need to understand why people accept or decline job offers.

So, what I'm trying to say here is there is a moment where being a technical expert is no longer sufficient. You really must understand if I were to take the decision, who would be impacted and then immediately reach out to them. Because there are studies that demonstrate that when people are involved in the decision, the decision is digested, is implemented. If people are just imposed a decision, the decision doesn't stick, doesn't work. So, to me, a positive mindset is to say, it doesn't matter the sector, the level of seniority that you have, try to think how whatever you do has an impact on others, reach out to them, invest quality time to collaborate with them, develop trust. And this investment that initially can be considered as a waste of time in reality is a beautiful investment that will pay off going forward.

MH: It sounds like you need to have a mindset of intellectual curiosity to succeed and survive in evolving workplace environments as AI changes everything.

PG: Yeah, I mean, this is something that I also discuss with my daughter, and also for many years I interviewed more than 8,000 people in my life, given my role. And for many years I have always asked, what is the most important thing that you've learned in the last 12 months? And to me, the answer to that question gave me a sense that the person was intellectually curious or not. Or maybe somebody said, yeah, I've learned that there is a better parking lot on the right side of the building. That to me was not a great answer. No? But if somebody said, listen, I'm learning. I've studied economics and behavioral economics, a new discipline, and I found it fascinating, and that's what I'm trying to understand. I developed a new marketing strategy based on the books that I read from Danny Kahneman or whatever. That implies that a person has a mindset of intellectual curiosity that will continue regardless of the role.

So, it's not an accumulation of diplomas, it's about a mindset of humbleness. And perhaps as my father used to say, "Paolo, if you feel like an idiot, you're probably learning." And so, I'm asking people try to feel like an idiot at least twice per week and I say it respectfully. And idiot of course is not meant as an insult, but the awareness that you've not yet fully grasped a given subject. That gives you the curiosity to go deeper into that subject. And so, if you have that mindset, I think you will be probably fine, if you have the optimism that we discussed before to progress.

MH: We've discussed repeatedly over the course of our time together the word collaboration and how that needs to be an evolution in our own minds as either employees or as leaders. But also, what about collaboration across industries? Do we need to rewrite our programming on how we collaborate with those who for generations we've considered to be competitors, and those that we're trying to overcome as opposed to work with?

PG: No. Here I can give you maybe an example from sports and one from business. You remember when Federer and Nadal played the last game together, they held hands and they started to cry. And I think it was a beautiful, beautiful scene because both of them said, "You know what? Actually, I would've not become the player that I became without Roger or Rafael." And this is to me a beautiful example that collaboration can be done through competition if competition is done in a fair, transparent, and meaningful way. So, I'm not saying the competition is wrong by any means, but I'm saying that it can be shaped in a way that improves both parties if collaboration is honest and intellectually meaningful. Okay? So, this is the first one.

The second one, and I want to provide an example. Sometime ago I facilitated a meeting with about 50 people in the room. Three of them were minister of finance, three of them were minister of education, three or four minister of health, a couple of deans from university, a few CEOs, head of unions, students, unemployed people. So, there was a large variety of people in the room. And the question is, what does it mean when life expectancies go from 70 to 90? Okay?

And all of a sudden, I remember a minister of finance said, "Shit, I don't have money to pay pensions." And the dean of the university said, "I cannot expect to give a degree to kids aged 23. They will die at 90 and they have maybe 70 years in which they don't study. What can you do to constantly help them to keep on growing long after they leave university?" And the minister of health said, "Jesus, I mean, I spend 95% of my budget on people that are 60 years old and above, and if now the average age is going to be 90, I have no money left to pay for the people that are below 50, so let alone young people."

So this to me was a beautiful example that how something has a systemic, let's say, consequence on every single element and all these people needed to sit down and collaborate to say, how can we find a solution that allow us to train people, recruit people, to retain people, to curate people, and to make sure that even the elderly, we care about them and will not just forget them somewhere and will let them die.

And this to me was a very watershed moment where everybody understood other people's viewpoint and they started to collaborate. And so, collaboration again is not just a cute verb that you put on job descriptions. It's something that is an essential element of leadership and behavior of every person working in a complex organization.

MH: So, to bring this conversation full circle, are you pessimistic or are you optimistic that AI and humanity can work together, and that leadership role will flourish?

PG: I would define myself as a concerned optimist. I'm a concerned optimist. I'm concerned because it's fair to say that legislation usually comes five or 10 years after something is implemented. And therefore, my concern is related to the speed of our society to shape and to frame meaningful policies that regulate something that is still far away. But I believe I remain optimistic because you need to keep faith in humankind.

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