What Mattered in Leadership and Management in 2023

The world of work, and thus demands of leaders, is changing fast, so let’s recap what happened in 2023 (Harvard Business School wrote this prologue to 2023 of trends to watch…did they hold up?).  These stories help us make sense of how leaders are struggling or succeeding at adapting to the new geopolitical, economic, environmental, and cultural climate.  Emphasis here will be the US context.  

Artificial Intelligence Takes the Spotlight

AI stormed into 2023, with more updates like multi-modal large language models, the firing and rehiring of OpenAI's Sam Altman, and Google's announcements around its research discoveries breakthrough and its new model Gemini. More below:

OpenAI’s drama with CEO Sam Altman, from Forbes:  “Within the space of a week, the firm’s chief

executive and co-founder, Sam Altman, was sacked by the board, hired by Microsoft, and then promptly reinstated after more than 95% of OpenAI’s staff threatened to quit and join him.”  The Board had not assessed the implications of their decision and saw swift consequences to their actions.  What played into this drama?  For better or worse, one factor was that the Board was committed to principles over profit, and Sam Altman believed in a more profit-motivated vision.  Further, his vision seemed to outpace the Board: “The saga underscores a recurring theme in technological innovation and visionary leadership,” says Monica Arés, executive director of the IDEA Lab at Imperial College Business School in London. “Visionaries like Altman possess a unique ability to envision a future that others may not yet see, driving ground-breaking advancements but also creating friction within organizations. Their clarity of purpose and rapid pace of execution can outpace their teams, leading to tension and a need for balance.”  And an important lesson is that the employees were a powerful force. 

AI is driving efficiency and you guessed it…job cuts:  (From CNBC) According to a study by ResumeBuilder, "more than one-third (37%) of business leaders say AI replaced workers in 2023" and collaboration software company found in a survey that "Employees say that 29% of their work tasks are replaceable by AI.

A report from a cybersecurity research firm found that 28% of organizations say their companies expressly permit the use of generative AI, 10% say a formal comprehensive policy is in place, but between 40-75% of employees are already using generative AI.  Some major companies like IBM had layoffs or held off on hiring due to AI-driven efficiencies.  From products like Microsoft Co-pilot to OpenAI’s GPT-4, these AI tools are giving us more time to focus on higher-value work, and even enhancing our current capabilities such as creatives.  None of us can predict what the future will look like, but all we know is that change will only accelerate here, and you better be surfing the wave.

Other Big Topics:

Businesses and Institutions are Struggling to Take Public Stances:  

Back in 2022, 2 major events marked an increased expectation of businesses and executives to take public stances - the first were major companies and their response to Russia’s war on Ukraine.  The

second was the disastrous response of Disney’s former CEO, Bob Chapek to the so-called “Don’t Say Gay” law in Florida.  2023 this became even more super-charged, with business leaders and university presidents getting caught up in the Israel-Palestine conflict.  Leaders like Elon Musk must understand their social media posts are public stances and can be held accountable.

The All Else Equal podcast covered this topic well, saying, “The idea that we always know the truth is a fundamental mistake…people should just imagine right now, how many beliefs that they currently hold that they are certain to themselves, that 100 years from now, people are just going to laugh at.”  Their point was that universities should not weigh in on what they think is the truth.  

Labor Unions found their footing in the US, from Yahoo! Finance:  

“The public broadly supported unions through a volatile economy, and a wave of high-profile strikes won significant bargaining victories for workers, signaling a resurgence of the US labor movement.

The nearly 50-day strike by the United Auto Workers against the Big Three Detroit automakers won

workers substantial pay increases and cost-of-living adjustments…[and even]... counted President Joe Biden, who joined the picket lines at a General Motors (GM) facility in Michigan, as an ally.

Entertainment industry professionals led their own monthslong strike against Hollywood studios, eventually claiming higher pay, improved compensation for streaming productions, and guardrails around the use of artificial intelligence.

From the start of the year through mid-December, workers have organized strikes nearly 400 times, according to the Labor Action Tracker from Cornell University’s School of Industrial and Labor Relations. “Workers are striking and forming unions because the US economy has churned out radically uneven income growth for decades, stemming from unbalanced bargaining power in the labor market,” said Margaret Poydock, a senior policy analyst at the Economic Policy Institute.

Return to Office is here: 

90% of companies report forcing a return to office, according to CNBC. According to an Owl Labs State of Remote Work report, while 10-13% of organizations globally are embracing fully remote work, up to 60% and 45% are hybrid and fully in-person offices, respectively.  Different leaders have made strong stances they believe would give them a talent advantage.  Workers are increasingly resisting and advocating for having a balanced life that allows them the flexibility to structure work around their lives, instead of the other way around. 

• Pro Remote: "If a company doesn’t go remote, they’ll steal your most talented people." - Chris Herd Founder & CEO @FirstbaseHQ

• Pro Hybrid: "Going back to the office every day doesn’t seem attractive. And never going back to an office again seems tragic.” - Evan Williams, Co-Founder of Twitter

• Pro In Person: "There really is some benefit to getting people together on a regular basis to drive relationship-building, mentorship, and collaboration.” - Brian Elliott, executive adviser and Founder of Future Forum

State of DEI - Mixed Picture: 

According to the Pew Research Center, on average, there are more positive than negative views of

diversity, equity, and inclusion initiatives.  2023 brought a continued pushback on DEI and similar initiatives, with the word “woke” encapsulating the demonization of all efforts to do positive environmental and social good. 

From Inc.: "According to the Paradigm report, fewer companies have budgets dedicated specifically to DEI (down 4 points from 2022) and fewer have DEI strategies (down 9 points from last year).  The report also highlighted a decrease in the number of companies with active DEI programs, including initiatives designed to assess company-wide inclusion, pinpoint disparities, and identify corrective measures. Particularly marked was the decline (a 12-point decrease) in the number of companies collecting employee feedback on DEI efforts through surveys or focus groups.

Employers are also promoting fewer individuals of color into leadership positions. The Wall Street Journal reported yesterday that in 2022, Black professionals of both genders were promoted into their first leadership roles at substantially lower rates than White professionals, according to new data from consulting firm McKinsey & Company."

There is also more legal scrutiny, again from Inc.: "The DEI slowdown comes at a time when diversity efforts have fallen under scrutiny. Following the Supreme Court's recent decision to ban affirmative action in college admissions, conservative activist groups, including the American Alliance for Equal Rights and America First Legal, began filing lawsuits against VC firms, companies, and governments with DEI programs."

Budgets were a mixed picture. From BusinessWire: "According to Capterra’s new research, a majority of HR leaders say their company has invested more money in DEI software and training this year than it did in 2022". Big Tech firms, though, were not a pretty picture (from CNBC) - for example, with Google, "By mid-2023, DEI-related job postings had declined 44% from the same time a year prior, according to data provided by job site Indeed. In November 2023, the last full month for which data was available, it dropped 23% year over year.".  This trend was similar to Meta.  

Conclusion

With 2023 in the rearview mirror - we look forward to another year of continued economic uncertainty, a rough geopolitical backdrop and the unstoppable rise of AI. Any predictions for 2024?

For Learning and With Love,

Chris