We are at a turning point where the once-theoretical promises of artificial intelligence (AI) are becoming daily realities across industries. AI is transforming healthcare by revealing hidden data patterns that improve patient outcomes, revolutionizing manufacturing with streamlined processes that optimize global supply chains, and personalizing media content at speeds once deemed impossible.
However, the rise of AI is not without significant costs. In the past year alone, its deployment has led to substantial job cuts and a fundamental reorganization of companies, from Microsoft’s strategic shift to McDonald’s introduction of self-service kiosks. AI’s capacity to manage routine tasks and complex decision-making drives the trend toward flatter organizational structures, eliminating both middle management and entry-level roles.
As traditional corporate ladder rungs vanish, we must ask: What other roles can AI transform?
I can think of an expensive one, but your CEO won’t like it.
Ready or Not, AI Is Coming for Your CEO
It’s easy to forget that CEOs are employees, too. Often insulated by layers of middle management and cushioned by perks unavailable to most workers, corporate executives—especially CEOs—are particularly susceptible to human pitfalls such as bias, emotion, and risk aversion, potentially more so due to the high stakes of their decisions.
Despite the value of pedigreed business degrees and extensive experience in navigating market trends—skills crucial for negotiating with leaders or satisfying analysts and investors—the human elements that once made CEOs indispensable now introduce inefficiency and bloat at the highest levels.
Could AI, especially technologies like Generative AI (GenAI) and Large Language Models (LLMs), be the key to streamlining corporate leadership? Is it realistic to think your company could replace its CEO with AI?
Though not immune to errors, AI is powered by vast amounts of data and increasingly sophisticated algorithms. It has proven its worth in enhancing efficiency within corporate departments such as marketing, logistics, and human resources. By leading to more efficient and effective outcomes and minimizing the potential for error, AI makes a compelling case that, in many scenarios, it can be more reliable than a human.
As AI technology advances, its accuracy and speed are set to increase. This progression prompts a critical reassessment of the CEO’s role. If AI can make corporate decision-making more efficient, isn’t it time to consider restructuring our companies by optimizing from the top down rather than the middle out?
The Cost of Human CEOs
There’s an old 1970s IBM presentation quote that suggests, ‘A computer can never be held accountable, therefore a computer must never make a management decision.’ But are CEOs truly held accountable today? Examining modern incentive structures, the answer is clear: the market is growing tired of bloated executive compensation packages that don’t correlate to success, and even Elon Musk has to sing for his supper.
The financial burden of top executives is significant. CEO compensation packages often include multi-million dollar salaries, hefty bonuses, and extensive perks, significantly impacting a company’s bottom line. According to the Economic Policy Institute, in 2022, CEOs were paid 344 times more than the average worker, compared to 21 times more in 1965. The average CEO in 2022 made $16.7 million, while the average worker made $61,900. The question arises: would you rather have a sharply dressed man at the helm of your ship or 300 workers to row the boat?
Leadership failures have historically been costly, from Bob Nardelli’s aggressive cost-cutting at Home Depot to Carol Bartz’s financially disastrous tenure at Yahoo! Jeff Immelt’s time at GE was marked by acquisitions that led to substantial debt and a stock value decline, necessitating extensive restructuring.
Recent years have also seen CEOs who, despite presenting themselves as corporate visionaries, make questionable decisions and face serious allegations. Bobby Kotick of Activision was accused of failing to address sexual misconduct allegations within the company, and that’s putting it mildly. Andi Owen of MillerKnoll told her staff to ‘leave pity city’ in response to concerns about losing bonuses. Then there’s Balaji Srinivasan, the founder of multiple startups and the former chief technology officer at Coinbase. He was raised on an internet created by US taxpayers and now wants to purge San Francisco of political rivals and create a tech-governed city running on cryptocurrency and testosterone.
AI doesn’t solve the problem of eccentric tech gurus, but it does minimize an organization’s exposure to poor judgment, reputational damage, and the cost of expensive hires who are poor cultural matches. The systems require an initial investment followed by relatively low maintenance fees, offering a more cost-effective and drama-free solution. Generative AI applications, capable of producing human-like text and autonomously making decisions based on large datasets, have significantly increased productivity and profitability across sectors.
This new framework would allow organizations to rapidly adjust to market changes and consumer demands without the typical lag associated with human analysis and decision-making—and without the exorbitant CEO paycheck or severance payout when errors are made.
Empowering Workers and Managers Through AI
Last week, OpenAI, the artificial intelligence research company, announced ChatGPT-4o, an updated version of its wildly successful conversational AI model, ChatGPT. However, the announcement of ChatGPT-4o was quickly overshadowed by key leadership resignations at OpenAI. Ilya Sutskever, a co-founder of OpenAI and a leading figure in artificial intelligence, announced that he was stepping down from his role as Chief Scientist. Sutskever’s resignation was followed by the disbanding of OpenAI’s safety team, which was focused on mitigating AI’s long-term threats to humanity.
Even before last week’s news, there was a turbulent attempt in late 2023 to remove Sam Altman, the co-founder and CEO, from his role. Altman’s job security appears pretty strong for now. Is that a good thing? How focused are OpenAI’s employees on their jobs verus the corporate drama?
Replacing your CEO with AI shouldn’t just be a cost-cutting strategy—it could significantly enhance worker productivity. By decentralizing decision-making, AI has the potential to shift analytical and operational power directly into the hands of line managers and employees. The change could eliminate delays caused by waiting for executive sign-offs, as AI-driven insights from LLMs enable quicker, more informed decisions aligned with authority and security parameters.
Consider a scenario where the decisions related to corporate governance and strategy are solely based on the extensive data analyses conducted by AI. Although there might be some degree of personal biases or emotional influences of programmers or data sets, the AI itself could detect its own biases and provide predictions and deliver decisions to multiple stakeholders, including the workforce, that would surpass the speed and impartiality of any human.
Augmenting the CEO’s role with AI builds on the decades-long pursuit of workforce optimization, a movement that HR professionals and consultants like myself have been implementing for decades. AI enhances information flow, enables real-time collaboration, and allows employees to harness the best available data for making effective decisions, acting as a bridge between those executing tasks and those overseeing results and risk management.
A Modest Proposal: AI Replacing CEOs
Now, let’s be honest. Most businesses aren’t about to replace their CEO with an algorithm. Leadership involves more than data-driven decision-making. It requires emotional intelligence, ethical judgment, and cultural insight—qualities AI cannot fully replicate—just yet.
The debate around whether to keep a traditional CEO or replace them with AI is often oversimplified. It reduces the discussion to a choice between a micro-dosing tech baron or a computer overlord, which is unhelpful. A more nuanced approach would involve a hybrid model, where AI systems support and enhance human decision-making rather than replace it. This model allows for collaboration between humans and AI, leveraging AI’s analytical strengths while still retaining the human qualities of empathy and ethical reasoning. This creates a dynamic leadership structure that is better suited to modern challenges.
As companies continue to seek higher productivity and innovation, the role of the CEO will come under scrutiny. Just like other positions, it may be eliminated by implementing technology platforms and AI tools. While some may find this prediction unrealistic, others may see it as an opportunity for employees to have more input and better communication with shareholders and customers. In fact, 49% of CEOs believe that AI could effectively replace “most” or “all” of their own roles, and 47% consider it a good thing.
Whatever you think, we’re closer than ever to asking and answering an overlooked and provocative question in this era of corporate restructuring: Do we even really need a CEO?