July 2025

The Leadership Advantage: What AI Can’t Lead

Why leadership development is the linchpin of the AI-era organization

Generative AI (GenAI) has taken center stage in business strategy. Across industries, CEOs are moving fast – deploying models, automating tasks, and driving transformation. Shareholders expect speed and boards want results. The playbook seems straightforward: whoever moves first, wins.

Yet, the hype masks a deeper risk, and the stakes are rising. By 2030, according to the World Economic Forum, 70% of workplace skills will change because of AI, including most tasks like research, summarization, and analysis. IBM’s 2025 CEO study echoes this: 69% of CEOs say their success now depends on sustaining leadership with strategic depth, and less on technical superiority. Forward-thinking leaders are doubling down on leadership development as a critical differentiator as GenAI gains speed – these are the organization’s capabilities that can’t be automated.

Now, the pressing question is not just about how to integrate GenAI – it’s about how organizations will lead beyond it.

Leadership Is the Competitive Edge

C-suite leaders understand the value of GenAI, even in the broadest sense. To date, the key advantage continues to be enabling capacity: when AI manages repetitive processes, the workforce gains time for complex problem-solving, relationship-building, and innovation, the human-centric work that drives growth.

The technological and process work to realize the capacity advantage is well underway. The World Economic Forum reports that half of U.S. companies are redesigning jobs around AI, automating aspects of some roles and supplementing workers’ abilities in others. Yet, few are retraining leaders for the leadership skills AI tools can’t provide. A recent study found that while 63% of enterprise leaders have deployed AI pilots in areas like content creation, customer service, and research, only 12% are actively reskilling their teams around what’s needed when those tasks become automated.

Six Leadership Capabilities AI Can’t Replace

In a world where GenAI is eventually commoditized, leadership will be the advantage. GenAI can generate text and optimize workflows in ways we’ve never seen, but it can’t align a team, coach a struggling colleague, or communicate strategy in a way that both educates and inspires.

Future-focused firms are prioritizing leadership development – no longer considered “soft” skills – as they move through GenAI transformations, with an eye on improving performance.

Talent alignment. Emerging AI tools can scan resumes, but they can’t assess fit. Exceptional leaders know how to match talent to strategy and culture, which are nuances algorithms can’t grasp. As AI shifts the nature of work, the leader’s role in talent assessment and management becomes more significant and will never be a “data-only” task.
Coaching and development. As AI becomes the default source of information, the value of human-led coaching and development increases. AI can provide data-driven feedback or even suggest training modules, yet it lacks the depth of experience to guide teams on how to navigate ambiguity, decide under pressure, and mentor others. Leaders who coach and develop exceptionally well can unlock far more value through performance and retention.
In-person engagement. This may be the skill that has not fully recovered post-pandemic. At the same time, Microsoft’s 2025 Work Trend Index found that 73% of employees trust leaders more after in-person contact. As GenAI assumes more intellectual labor, the in-person meeting will regain its status as a trust-building tool and a way to strengthen engagement. Leaders who prioritize in-person time treat it as a strategy versus logistics.
Strategic communication. GenAI produces solid first drafts of memos and excels at summarizing. In contrast, strategic leadership communication – clear, human, and situational to business strategy – moves people to action. If leaders fully outsource memo writing to GenAI, for example, they miss the bigger point, risking misalignment and lack of engagement. A well-crafted and delivered message – written, in a town hall, or through a podcast – can align, inspire, and redirect, something no chatbot can replace.
Productive dissent. GenAI simulates consensus as a default. Relatedly, with GenAI creating content at the speed of thought, the risk of groupthink increases. Experienced leaders know that high-stakes decisions require constructive debate. Leaders can reward productive deliberation, disagreement, and dissent as a foundational part of better decision-making and foresight.

How The Best Leaders Are Responding

The more advanced firms are treating GenAI as an overall organizational transformation, investing in leadership with the same intensity they apply to tech. If leadership skills are the linchpin of the AI-era organization, companies seeking a real advantage will refocus on the three key leadership capabilities to help take them forward in the GenAI era.

Transformational Leadership: GenAI integration presents one of the most complex leadership challenges in recent business history. It changes how people work, decide, and collaborate. Yet tech alone does not transform organizations – leaders do. Firms are learning that scaling GenAI depends less on technical readiness, and more on whether people understand the purpose, feel engaged in the process, and trust those leading it. Enabling leaders to navigate what is next emphasizes transparency around talent tradeoffs, ongoing communication with employees, and visible sponsorship at the top.
Human-Led Coaching: In fact, the gap between what AI can do and what organizations need is widening – and leadership development is front and center. In the context of GenAI, human-led coaching is a multiplier; AI can generate information for teams, but it cannot help them make judgment calls in the face of nuance, emotion, or risk. Today’s investment in leadership coaching advances leadership capabilities – strategic thinking, emotional intelligence, communication, and decision-making –that will only become more critical to performance as GenAI accelerates.
Strategic Readiness: GenAI is defining an era of constant disruption. While AI systems can identify patterns and optimize decisions, they can’t weigh ethical implications, assess reputational risk, or choose between competing stakeholder interests. That makes foresight more valuable. Scenario planning – often a quarterly exercise – is now continuous. Leaders must be prepared for more than one future, which begins with developing highly adaptable and principled decision-makers. In a world defined by data, judgment will be an organization’s most vital asset.

The Window to Lead

In the age of algorithms, the advantage comes from what algorithms cannot do. As AI manages most information-driven tasks, leadership capabilities will be performance differentiators. In fact, 80% of C-suite executives believe AI will kickstart a culture shift where teams are more innovative. Companies that act now will shape this shift, knowing that technology can be bought, and leadership must be built.

About Council Advisors

Council Advisors is a leading advisor to the C-suite of high-performing companies, bringing together strategic counsel, operational performance improvement (SSA & Company), executive talent development (The Miles Group), and strategic communications (High Lantern Group). We work with top leaders from the largest public companies as well as some of the most vital mid-market and growth investment-backed companies.