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Leadership
In the age of AI we need magicians, not managers
As knowledge rapidly loses its shelf life, leadership is no longer about what leaders know, but what they can make possible. The answer lies in “magic-making,” not technical mastery.
Rapid read:
- AI is reducing the value of accumulated knowledge, shifting leadership from expertise to enablement: leaders must focus less on what they know and more on creating conditions where new ideas and value can emerge.
- Traditional “inside-out” management is inadequate; leaders must adopt an “outside-in” mindset: success depends on responding to external opportunities, customer needs, and disruptive change rather than relying on legacy assumptions.
- Leadership’s role is evolving from controller to “architect of flourishing”, empowering people, fostering creativity, and building adaptive organizations where innovation can scale, recognizing that technology enables progress, but humans create impact.
Pianist Herbie Hancock once said of jazz genius Miles Davis: “He took musicians and turned us into magicians!” In the newly emerging world of AI, this is the secret of leadership that we will all be searching for.
We are likely on the eve of an era of supernova-scale innovation: new technologies, new industries, new value propositions, new business models, opening up opportunities we have never thought about before. We need organizations that can handle this challenge: new ideas, fast responses, more exciting value propositions. The concern is that our present organizations and leadership models are unprepared for what comes next.
Today, with AI, the challenge is that the ideas may be unlike anything that we’ve ever prepared for. More than 200 years of mass consumption and mass production have institutionalized our reliance on high-profit ideas. Typically, these originate in market averages or generalizations (to use David Weinberger’s words), which frequently favor extrapolations from the familiar: take a popular product, like a smartphone, add a camera, and treat it as an innovation.
AI’s genius, or at least the hope for AI-generated opportunities, lies in the notion that it does not instinctively court mass-market themes, nor start from a legacy foundation, but originates, instead, from a fresh slate, without pre-imposed rules, to seek out the best alternatives. Think of what this means from an enterprise-building perspective. If you have built your organization on the basis of long-held beliefs and traditions, what if the next opportunity is completely orthogonal to these?
We need outside-in thinkers, not inside-out ones
It is important to realize that today it is ideas, not technologies, that change the world.
But ideas can’t survive on their own.
In today’s modern economies, complex organizations are the vehicles that give birth to these ideas, develop them, and then disseminate them. If we are candid, our world is littered with too many unrealized good ideas. Ideas lacking sufficient organization and leadership support to achieve any impact. Perhaps this is because the arc of management thought over the past two centuries has been to hire managers and keep them thinking as managers; not as magicians?
Thinking like managers is completely inside-out; management thinking is typically driven by their own experiences and existing conventions rather than external realities.
The action in the market, however, is driven by what is happening outside-in. Your disruptive rivals are outside; so are your customers, and their expanding customer experience expectations.
When you look at your organization, in which direction is it facing, outside or inside? Which do you spend most of your time on?
While steam, then electricity, and now digital, were the essential scaffolding that any new ideas were built around, they were just scaffolding, not magic-making.
Digital is not magic-making, people are
Two centuries ago, the application of steam changed the way organizations worked. One hundred years ago, it was electricity that changed our organizations. In each case, such change was imperative, and organizational transformation was called for. It was exotic, difficult, and costly, but what we remember today is not the transformation, but what changed among the people working in such organizations.
The leaders who prevailed were typically not the engineers who pioneered the disruptive technology, nor were they managers who successfully ran factories powered by older ideas. James Watt launched the Industrial Revolution with the invention of the steam engine, but Richard Arkwright changed the way that cotton was spun with water-driven engines and “created a vision of the machine-powered, factory-based future of manufacturing.” Watt, for all his technical genius, had a primarily inside-out view of the world: “What can my engine do in this situation?” Arkwright saw the situation outside-in: “How do we change the way work is done?”
Thomas Edison invented the phonograph, but Eldridge R Johnson envisioned mass entertainment by building the Victor Talking Machine Company – producing record players, cutting records, signing artists, and integrating the entire music value chain.
So, while steam, then electricity and now digital, were the essential scaffolding that any new ideas were built around, they were just scaffolding, not magic-making. Magic making requires a holistic vision of how technical ideas connect with customer dreams: creating opportunities, embracing risk, taking chances, suspending disbelief, and learning from it all.
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Leadership’s emerging role
Steve Denning, who has been an important voice in appraising transformational change within enterprises, tells us that we need leaders who promote growth mindsets, delivering new ideas as they arise, who are neither linear nor deterministic; and who promote empowerment and collaborative networks.
Edmund Phelps, Nobel laureate in economics (2006), used the term “flourishing” to describe the surge of innovation in some economies between the 1820s and 1960s. He argued that this was driven by modern values, such as the desire to create, explore, and meet challenges, which unleashed a large-scale generation of new ideas. At the enterprise level, Phelps thought that flourishing results from managerial choices that encourage “the experience of the new: new situations, new problems, new insights, and the ideas to develop and share.”
In other words, leadership that is oriented “outside-in.”
Boundaryless’ Simone Cicero has referred to the achievement of “flourishing” at the enterprise level by using fermentation as an analogy: “People often imagine flourishing as a process of adding: more freedom, more resources, more trust, and more energy… Fermentation taught me something slightly different.” It is not all about adding this and that, leadership also has a shaping role. “Part of organizational design consists of shaping the conditions under which healthy coordination can emerge autonomously,” if self-governance is to be scalable. Leadership for the future should be about creating an organizational environment where such flourishing can occur naturally, championed by all levels in the organization.
In a world where AI makes knowledge highly perishable, leadership’s role should not be that of a specialist, planner, or evaluator. It is not about knowing more than those who know the most. It’s about putting talented people in a position where they can outperform even their own conceits – where they can recognize those ideas which are worthy of success and then help bring them to fruition.
Annika Steiber has referred to leadership’s emerging role as one of architecture, noting that the question for today’s CEO is not how to control the organization, but how to architect an intelligent system that continuously learns, adapts, and remains accountable. “The CEO of the AI era is therefore less a commander and more a system architect – orchestrating human and machine intelligence, cultivating adaptive cultures, and embedding governance mechanisms that make intelligent systems trustworthy.”
Today’s leader should not be trying to do it all by themselves, but should be creating space and authority for others better suited to take on responsibility for action. The role should be that of architect, cheerleader, license-giver, or partner-maker.
Fast-moving environments shorten the shelf life of accumulated knowledge.
How best to equip tomorrow’s leaders
In sizing up how best to prepare our leaders for the future, the central question must be how much emphasis to place on digital and AI versus other leadership capabilities, such as judgement, creativity, and organizational leadership.
The central leadership challenge for organizations of the future is to assemble and empower people with dynamic mindsets capable of delivering performance in a world that may diverge sharply from what we currently know or assume to be true.
Fast-moving environments shorten the shelf life of accumulated knowledge. What leaders know today quickly becomes outdated. Learning, therefore, becomes more important than knowing; less a phase, more a continuously developing capability.
This has profound implications for how we prepare leaders. Educational programs that over-specialize in any one particular facet of change, whether in digital technologies or any other domain, run the risk of increasing knowledge perishability by narrowing attention rather than expanding it.
Far better to equip tomorrow’s leaders with enduring fundamentals, such as business basics, as well as emphasizing the humanities, if we are to provide a wider field of vision, and the social sensitivities needed to build bridges among diverse stakeholder communities, foster ethical reflection, and steel our leaders with the courage and self-confidence to champion eccentricity within their organization.
Tomorrow will not be an extension of today. The future will not reward those who extrapolate from what they already know, but those who can respond to what they have not yet seen. Leadership, therefore, is no longer about possessing answers. It is about creating the conditions in which better answers can emerge. It means creating space for decision-making, distributing authority, and trusting others to exercise sound judgment in real time.
Technologies like AI are only ever scaffolding. They enable, but they do not create.
In the age of AI, leadership is not about knowing more. It is about making more possible. More magic, less management.
What matters is whether leaders can build organizations in which ideas take root, combine, and flourish – where people are positioned not just to perform, but to explore, imagine, and discover.
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