Why is it important for leaders to acquire practical AI knowledge?

A McKinsey report reveals that business leaders with a solid grasp of AI fundamentals are 50% more likely to succeed in their AI strategies.

While data can reflect an objective trend, one might wonder what underpins this 50% increase in AI strategy success.

I identify two primary factors:

First, the ability to identify high-impact use cases: Although business leaders are often aware of potential areas for improvement within their organizations, the key to recognizing the most impactful solutions lies in the depth of their technical understanding. For instance, if a leader’s conception of AI is confined to tools like ChatGPT or Gemini.ai, their exploration of business optimization will be limited to the narrow functionalities of those applications. In reality, such tools represent less than 1% of AI's true potential, as they are pre-built solutions with highly specific, constrained applications.

In contrast, when leaders understand AI's foundational principles—such as the value of leveraging data, the power of image recognition, trend prediction, and pattern identification—they gain a broader perspective that enables them to assess use cases across every facet of their business. Our cognition tends to be guided by the known information, and when a leader's understanding of AI is either limited or skewed, it impedes their ability to recognize the most transformative AI applications that could provide long-term competitive advantages.

Second, effective execution and management: While most senior leaders and executives do not directly oversee technical projects, a lack of in-depth AI knowledge can lead to illusive expectations and a failure to recognize inherent risks. This knowledge gap can place an undue burden on middle managers, who must bridge communication gaps between senior leadership and technical teams, leading to burnout and, ultimately, project failure as technical complexities and shifting priorities escalate during execution.

A leader with a sound understanding of AI is better equipped to assess the feasibility and risks of a project, allowing them to empathize with their teams, anticipate long-term impacts, and make more informed decisions. This cognitive advantage enables leaders to set realistic goals, manage scope with agility, and provide valuable emotional support to their teams.

In conclusion, exceptional leaders are lifelong learners. Sporadically consuming news or social media posts is not genuine learning—it is merely information consumption. True learning requires dedicated time to systematically study a subject, grasp its fundamental concepts and terminology, and integrate that knowledge through real-world application.

---

Do you want to become an AI-savvy leader and empower your executive team with this capacity?

Check out my Leadership AI training program to equip you and your executive team with practical AI knowledge.

Not sure if you are ready?

Take a free online AI knowledge assessment 

Find my suggestions useful? Connect with me on Linkedin.

Atelier PMO empowers SMB leaders to craft actionable AI strategies through customized training in AI knowledge and a distinctive process of collaborative team co-creation.