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Why leaders need soft skills in the age of AI

Cláudia Custódio — Mon, 18 Sep 2023 09:30:27 +0000

Why leaders need soft skills in the age of AI

Cláudia Custódio Mon, 18/09/2023 - 09:30

18 September 2023

Emotions are not a weakness, but a strength. Learn how to harness yours to improve your leadership skills

If we were to meet someone who felt no emotion – no joy, sadness, anger, disgust, empathy or compassion – we might be concerned that a serious psychological condition was at play. And yet, this is exactly how classical economics sees us all operating – as homo economicus, economic actors who make decisions to maximise our own self-interest.

This characterisation frames people as purely rational beings, only ever considering the cost-benefit ratio of their options. Values, social norms and emotions don’t influence homo economicus, with the exception, perhaps, of one fear: the fear of risk.

How Seinfeld exposed the flaws in traditional economics

To imagine real people behaving with such exaggerated selfishness and rationality is, frankly, comical. Discussing her book Seinfeld and Economics on NPR’s Planet Money podcast, Professor Linda Ghent made this point. “He will not do anything if it doesn’t benefit him,” Ghent said of the character George Costanza from the 90s sitcom. “In some ways, he really is the true economic man.” Through Jerry Seinfeld and his fellow self-centred characters, we see the comic absurdity of treating empathy and mutual aid as inconveniences unless they provide a direct personal benefit.

And just like the world of Seinfeld, economics treats emotions and the actions that stem from them mostly as a deviation from the optimal, even as it increasingly recognises their importance. Even in behavioural economics, emotional actions are not seen as “normal”. Rather, they are viewed as psychologically and socially influenced departures from rational economic behaviour, or biases.

This shift also prioritises the skills that are least likely (for the moment at least) to be delegated to artificial intelligence

This view of humanity extends to elements of leadership thinking too. Agency theory, for example, deals with the relationship between principals and agents, and presumes that, when the former contracts the latter to perform a task on its behalf, both will behave in a self-interested way, rather than working towards mutual benefit. Agents require incentives (for example, a bonus for good performance) to make decisions that also benefit the principal, as they are fundamentally viewed as selfish, lazy robots.

What COVID-19 taught us about leading with empathy

Thankfully, this is not how real people operate and, as a result, these traditional models can only offer very general guidance about how to lead and motivate human beings. Making optimal decisions without being influenced by emotions might be useful in some circumstances, but effective leadership has more to do with the human side of the manager and their interpersonal or “soft” skills.

To inspire, a leader has to be able to communicate effectively, listen actively, and express ideas persuasively. They also need to resolve conflicts and manage change with empathy and understanding. The COVID-19 pandemic, for example, presented managers with a series of emotional and practical challenges, not least keeping their remote teams unified and motivated. More recently, the cost-of-living crisis in the UK has increased individual and team-wide uncertainty, anxiety and stress, requiring emotional understanding and care from managers.

Although functional (or “hard”) skills are important, it is soft skills that differentiate successful executives

The purely rational metrics and processes that could effectively manage homo economicus are not up to these challenges. Of course, in a world informed by the granular detail of large-scale databases and swayed by the automation of large language models, this nuance might easily be lost. However, there is evidence that companies are increasingly prioritising soft skills in their senior managers.

Falling demand for hard skills

A recent paper by researchers at University College London, Harvard Business School and Cornell University explores the evolution of interpersonal skills in top executives. The authors argue that, although functional (or “hard”) skills are important, it is soft skills that differentiate successful executives.

They break soft skills down into two categories: human resources and social skills. The former refers to the skills required to motivate employees, while the latter refers to the skills required to empathise and persuade. Over time, the authors document a fall in demand for skills associated with financial and material resource management, and a rise in demand for soft skills, and social skills in particular. This is especially the case for CEOs in relation to other C-suite positions.

Even in behavioural economics, emotional actions are not seen as “normal”

Clearly, companies are increasingly on the lookout for executives with the ability to interact with, relate to, and persuade others at the most senior levels, with less emphasis on traditional operational and administrative capabilities. These are generalist skills that can be easily transferred across firms and industries, for which firms are typically willing to pay a premium. This shift also prioritises the skills that are least likely (for the moment at least) to be delegated to artificial intelligence.

This suggests the business world is becoming aware that developing and retaining executive talent with strong interpersonal skills is crucial, both to improve operational performance and to prepare for future challenges. Homo economicus may once have been a useful economic tool, but, much like George Costanza, he doesn’t represent a modern, complex workforce – so he has no place in the C-suite either.

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"UK lags behind EU in authorising new medicines after Brexit": Financial Times features research co-authored by Professor James Barlow

Evie Burrows-Taylor — Mon, 18 Jul 2022 12:57:41 +0000

"UK lags behind EU in authorising new medicines after Brexit": Financial Times features research co-authored by Professor James Barlow Evie Burrows-Taylor Mon, 18/07/2022 - 12:57

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The Times quotes Professor Ramana Nanda on COVID-19 vaccines and innovation

Evie Burrows-Taylor — Fri, 03 Sep 2021 13:35:36 +0000

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Delivering brand resilience in the digital era

Omar Merlo — Thu, 29 Apr 2021 14:41:08 +0000

Delivering brand resilience in the digital era

Omar Merlo Thu, 29/04/2021 - 14:41

17 May 2021

Brand resilience is a term used to describe how strong brands can withstand external pressures through difficult times. If properly cultivated, brand resilience will ensure your brand stands the test of time – time and time again

In the digital era, brands are subjected to increased scrutiny. Online reviews, social media and intensified competition mean things can go wrong quickly, with any issues amplified.

In this context, building brand resilience is essential – even more so after the events of the last year.

Credit built up in good times can help brands endure the bad, from PR gaffes to global pandemics.

Customer participation is key to brand resilience

Brand resilience may be built through strong customer relationships. These can be cultivated over time through strong customer-brand connections and distinctive brand value propositions.

Brands can also strengthen customer relationships and build up resilience through customer participation and brand transparency, strategies which my Imperial colleague Andreas Eisingerich and I (alongside others) have researched.

Increased scrutiny may make some unwilling to invite customer opinions. Brands should resist this temptation and do exactly the opposite.

We have found that brands which invite feedback, reviews, suggestions, and even complaints, develop strong customer relationships. This has tangible results, including brand loyalty and improved sales.

Brands that go further, openly sharing positive and negative customer comments and feedback, gain even more. Transparency, we found, can increase purchase intention and willingness to pay.

Continued below video

We’ve even come across reports of developers building minor bugs into software, which they then fix publicly as customers report them, showing engagement, responsiveness and transparency. This approach is a little extreme, and not something we would encourage, but reflects organisations’ increasing awareness of the benefits of customer participation and transparency.

Conversely, organisations that merely pay lip service to customer engagement, treating it as an unwelcome chore, will not enjoy the benefits.

We have found customer participation drives a greater sales uplift than the much-coveted word of mouth, which arguably prioritises new over loyal customers. Ultimately, the latter is perhaps best left to grow organically. Customer participation can be a more active process.

Honesty can be the best policy

Credit can be built up during good times, but brands can also show off what they’re made of during difficult ones. The current pandemic has merely amplified ever-present realities related to brand transparency.

Brands that have responded well during the pandemic, with transparency and integrity, will have built up good will among customers. Others, seen to have been evasive and greedy (certain budget airlines may fit the bill), will see their resilience tested.

While brands may be unwilling to show weakness, admitting the last year has been difficult may resonate with customers, who have also had difficult years. Many praised the way (the now late) Marriott CEO Arne Sorenson handled his honest but contrite admission that he would have to lay off staff.

Trying to sweep issues under the carpet will weaken customer relations, eroding trust.

As a cautionary note, we must add that customer participation must not be allowed to negatively impact employee relations. Employees’ well-being, participation, and protection from customer negativity all contribute to brand performance. A balance should be sought between internal and external participation.

How to build brand immunity

Building strong customer relationships can help confer brand immunity, protecting brands from negative information that might otherwise be fatal. Remember Volkswagen’s emission scandal in 2015? Somewhat surprisingly, the company bounced back in 2016 to become the world’s top-selling car manufacturer, only being overtaken in 2020 by Toyota (which itself recalled eight million defective vehicles in 2008).

I am part of an Imperial London research team exploring ways in which brands can actively prime immunity to negative information. We have found that brands can do this by stimulating specific psychological processes among customers.

For example, merely asking customers how they would feel about a brand if it were hit by hypothetical negative information can boost future brand immunity. This suggests that, besides building strong relationships over time, there may be more immediate ways to build brand defence mechanisms, at a time when these are most needed. This is a very promising and timely research area.

Developing marketing talent to navigate difficult times

The MSc Strategic Marketing programme at Imperial Business School covers customer engagement, brand strategies, and building brand resilience across multiple modules and perspectives.

As well as academic researchers, provision comes from those with frontline experience. The crisis management module in our online programme, for example, is taught by a colleague who led American Airlines’ brand recovery strategy after the 9/11 attacks and other brand crises.

To anyone wondering whether this is a good time to enrol in an MSc in marketing, the answer is unequivocally yes. The skills to generate and analyse market intelligence and develop customer-centric strategies will be essential to brands’ survival.

Customer-centricity will be more pivotal than ever in the post-pandemic world. Brands must strive to hold a distinctive and relevant place in consumers’ minds (no, not all publicity is good publicity). This must be married to a narrative: a positive story that connects prospective consumers with the brand.

I’ve previously written (with Professor Eisingerich) that brands should not sacrifice marketing budgets post-pandemic, and that they need to find ways to adapt. Those who prosper will be those who manage to invest strategically. And highly skilled marketing talent may be the best investment of them all.

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France 24 quotes Dr Marisa Miraldo on crisis facing British hospitals in wake of COVID-19 (in French)

Evie Burrows-Taylor — Mon, 18 Jan 2021 10:03:40 +0000

France 24 quotes Dr Marisa Miraldo on crisis facing British hospitals in wake of COVID-19 (in French) Evie Burrows-Taylor Mon, 18/01/2021 - 10:03

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UK will emerge from the pandemic with "very damaged" economy, Professor David Miles tells CNBC

Evie Burrows-Taylor — Mon, 04 Jan 2021 10:26:02 +0000

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Professors Carol Propper and Nelson Phillips on the "disastrous confusion" of the UK government’s response to COVID-19 in Forbes

Evie Burrows-Taylor — Mon, 04 Jan 2021 10:00:47 +0000

Professors Carol Propper and Nelson Phillips on the "disastrous confusion" of the UK government’s response to COVID-19 in Forbes Evie Burrows-Taylor Mon, 04/01/2021 - 10:00

16 December 2020

Healthcare management and policy

"How much did the COVID-19 lockdown really cost the UK?": The Guardian covers recent paper by Professor David Miles

Evie Burrows-Taylor — Mon, 14 Sep 2020 14:30:03 +0000

"How much did the COVID-19 lockdown really cost the UK?": The Guardian covers recent paper by Professor David Miles Evie Burrows-Taylor Mon, 14/09/2020 - 14:30

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The COVID-19 recession seems to be hitting lower income and more vulnerable groups, argues Professor Carol Propper in BBC Future magazine

Evie Burrows-Taylor — Tue, 18 Aug 2020 09:36:15 +0000

The COVID-19 recession seems to be hitting lower income and more vulnerable groups, argues Professor Carol Propper in BBC Future magazine Evie Burrows-Taylor Tue, 18/08/2020 - 09:36

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"Pretty optimistic” to assume output could return to pre-pandemic levels by next spring, Professor David Miles tells Financial Times

Evie Burrows-Taylor — Tue, 11 Aug 2020 13:24:08 +0000

"Pretty optimistic” to assume output could return to pre-pandemic levels by next spring, Professor David Miles tells Financial Times Evie Burrows-Taylor Tue, 11/08/2020 - 13:24

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COVID-19

Why leaders need soft skills in the age of AI

Emotions are not a weakness, but a strength. Learn how to harness yours to improve your leadership skills

How Seinfeld exposed the flaws in traditional economics

What COVID-19 taught us about leading with empathy

Falling demand for hard skills

Monthly newsletter

"UK lags behind EU in authorising new medicines after Brexit": Financial Times features research co-authored by Professor James Barlow

The Times quotes Professor Ramana Nanda on COVID-19 vaccines and innovation

Delivering brand resilience in the digital era

Brand resilience is a term used to describe how strong brands can withstand external pressures through difficult times. If properly cultivated, brand resilience will ensure your brand stands the test of time – time and time again

Customer participation is key to brand resilience

Honesty can be the best policy

How to build brand immunity

Developing marketing talent to navigate difficult times

Monthly newsletter

France 24 quotes Dr Marisa Miraldo on crisis facing British hospitals in wake of COVID-19 (in French)

UK will emerge from the pandemic with "very damaged" economy, Professor David Miles tells CNBC

Professors Carol Propper and Nelson Phillips on the "disastrous confusion" of the UK government’s response to COVID-19 in Forbes

"How much did the COVID-19 lockdown really cost the UK?": The Guardian covers recent paper by Professor David Miles

The COVID-19 recession seems to be hitting lower income and more vulnerable groups, argues Professor Carol Propper in BBC Future magazine

"Pretty optimistic” to assume output could return to pre-pandemic levels by next spring, Professor David Miles tells Financial Times

COVID-19

Why leaders need soft skills in the age of AI

Emotions are not a weakness, but a strength. Learn how to harness yours to improve your leadership skills

How Seinfeld exposed the flaws in traditional economics

What COVID-19 taught us about leading with empathy

Falling demand for hard skills

Monthly newsletter

"UK lags behind EU in authorising new medicines after Brexit": Financial Times features research co-authored by Professor James Barlow

Share

The Times quotes Professor Ramana Nanda on COVID-19 vaccines and innovation

Share

Delivering brand resilience in the digital era

Brand resilience is a term used to describe how strong brands can withstand external pressures through difficult times. If properly cultivated, brand resilience will ensure your brand stands the test of time – time and time again

Customer participation is key to brand resilience

Honesty can be the best policy

How to build brand immunity

Developing marketing talent to navigate difficult times

Monthly newsletter

France 24 quotes Dr Marisa Miraldo on crisis facing British hospitals in wake of COVID-19 (in French)

Share

UK will emerge from the pandemic with "very damaged" economy, Professor David Miles tells CNBC

Share

Professors Carol Propper and Nelson Phillips on the "disastrous confusion" of the UK government’s response to COVID-19 in Forbes

Share

"How much did the COVID-19 lockdown really cost the UK?": The Guardian covers recent paper by Professor David Miles

Share

The COVID-19 recession seems to be hitting lower income and more vulnerable groups, argues Professor Carol Propper in BBC Future magazine

Share

"Pretty optimistic” to assume output could return to pre-pandemic levels by next spring, Professor David Miles tells Financial Times

Share