AI’s impact on workforce and culture: Strategies for board directors

The rapid development of generative AI has transformed the way many of us deliver and execute tasks. In a webinar facilitated by Stela Solar MAICD, director of the National AI Centre, panellists discuss the risks and opportunities of AI.

“Generative AI has triggered this transformation in terms of jobs, skills and workplace culture, and it has put an additional spotlight on the importance of leadership, both at the company director and executive level,” Stela Solar MAICD, director of Australia’s National AI Centre, an organisation hosted by the CSIRO, told a recent AICD webinar.

In terms of jobs, AI is driving growth and decline in different areas of business and industry, with some roles being disrupted and others being augmented or created. “It's a shifting dynamic that organisations need to get on top of so that their workforce can be highly effective, productive and competitive in the broader ecosystem,” said Solar.

Webinar panellist Claudine Ogilvie GAICD, a non-executive director at Cuscal Limited, said that to deliver good AI outcomes, organisations need good data. To date, she added, only “a few companies have invested in their data and data skills as though they are a strategic asset”.

“The top three issues that organisations think are preventing them from leveraging the full value of their AI is a lack of data skills, low availability of capability and, thirdly, poor data quality and governance. Boards should start to consider whether they need to reset and reframe their talent strategies,” said Ogilvie. “They also need to understand whether overcoming these challenges will be a net positive for their workers and how it is going to impact the culture.”

A healthy culture matters because it drives strong performance, she added. “There are some really exciting changes ahead for companies that are leaning into this proactively, but if that cultural change and the potential fear around these changes isn't closely managed, there are also some risks.”

Australians are more nervous about AI than any other nationality, according to Ipsos’ new Global Advisor survey in 2023. The survey, which examined responses to AI across 31 countries, found that 69 per cent of Australian respondents feel nervous about the technology.

Globally, about half (52 per cent) of all respondents said they were nervous about AI – a significant increase on the previous Ipsos survey, conducted 18 months ago. Just 40 per cent of Australians said they were excited about AI, well below the global average of 54 per cent.

Panellist Louise McGrath, head of Industry Development and Policy at Australian Industry Group, said the successful rollout of AI, particularly in a business-to-business environment, requires two interrelated skill bases. “One being the technical skills involved in the design, implementation and integration of digital technologies into the business, production line or whatever it is.”

“The second – equally important – skill base is operational skills,” she added. “The analogy we like to use is the road system. We need engineers to design the roads and constructors to build them. We also need to train auto mechanics to keep the cars on the road, as well as drivers. Now all those different skill sets have different ways of learning, different criteria and different sorts of qualifications, but all are essential if we're going to keep things moving.”

Building trust and confidence

There's uncertainty around how AI is being used across organisations, said Marc Washbourne, co-founder and CEO of ReadyTech. “It's something we've thought about extensively with the board,” he said. “We took the decision as a management team to dedicate a week to AI to give people space to learn and play and experiment. It was mostly about building a baseline understanding, but also about developing confidence in people. I think AI can be a little scary.”

Washbourne said the exercise helped to build trust, along with “having a really open dialogue with our teams about the impact of AI”. “We also started to really address a lot of the risks,” he added. “In that week, we ran an introductory course on ethics that every single person across the organisation attended.” He said people were curious and “crying out for leadership”.

“Employee engagement went through the roof in the weeks after. It helped to shape our culture; I think we became somewhat more clear-eyed and it helped us craft a vision and direction for the company around AI.”

Communicating benefits and risks

McGrath explained that getting organisations to appreciate the impact of digitalisation and automation can be a major hurdle. She recommends having conversations to address fears regarding job loss and a focus on the improvement of job quality.

One approach is to use a division of the organisation that touches all other areas to show the benefits and test the risks. “Having a few days where safety officers have all the different AI tools that can be used to improve workplace safety has manifold benefits,” said McGrath.

“The first is that safety officers are often the most conservative in a business,” she added. “Safety includes all staff, so it's also a way of getting people comfortable with AI tools and including everyone, but also, fundamentally from a board's point of view, it should reduce your risk on safety and improve safety outcomes, which makes it an easier business decision or business investment to make.”

Ogilvie said when considering regulatory expectations from a leadership and board perspective, “human accountability, leadership and conduct have risen to the top in an AI-driven environment”.

“These are questions that boards need to start asking themselves in that context,” she said. “Do my people have the right scope and capabilities to make decisions within those values and ethics frameworks? How are you translating the operation side of AI into the strategy, and who should be making decisions about how AI is used and its impact?”