Lead or Manage

AI is a fascinating thing because it demands a complete rethinking of what “work” is. Truly unleashing AI’s potential cannot be achieved through management or consulting because, by definition, they are forced through shareholders or fees to focus on rationality, risk, returns, and metrics.

For large companies (Fortune 500), the incentive structure does not allow real change: shareholders demand legible risk over actual transformation (too risky), this forces the CEO to optimize for defensibility. He cannot justify intuition or conviction to the board; ergo he outsources decision-making to metrics, consensus (,and AI itself) which in turn creates a perfect market for consultants who can sell change management as a liability insurance, not transformation.

The next 10 years will show that the only companies that will win aren’t those with the best AI strategy or change management frameworks but the one’s whose leaders simply feel, see, understand what’s coming and reorganize everything around that vision (consequences be damned).

We already have a selection filter for who will succeed with AI: in the first category are CEOs who have risen through the system, they have learned NOT to trust intuition, NOT to make bold moves, NOT to lead through conviction. The system promotes these people who are really good at managing consensus and hiring consultants. The second category (the winning category) are CEOs who can actually lead this transformation. They can ignore the consultants, move faster than their boards are comfortable with (if they have one), rebuild from first principles and lead from intuition. The second category will save companies and turn SMBs into Fortune 500 companies. They will look chaotic, unreasonable, and like failures for years before the world catches up with what is inevitable.

However, not every large corporation is doomed. Those CEOs who have majority voting rights (dual-class shares, founder control) are in a unique position compared to anyone else in the Fortune 500 lists. That is also why everyone is looking at Mark Zuckerberg, Sergey Brin, Larry Ellison, Elon Musk, Jeff Bezos, Jensen Huang, or Marc Benioff. Almost all are founder-led tech companies – almost none of the other traditional Fortune 500 have this structure. Many of these other traditional companies are up for a big surprise because they will not be disrupted by their peers in their respective index, rather by SMBs.

Medium sized businesses have inherent structural advantages in this AI era, because they have decision speed, no board presentations, existential clarity, closer to actual work and their customers, less to lose.

What might happen is that founder-controlled giants will continue to outperform beyond what we currently believe is possible while traditional large-cap companies are getting hollowed out and disrupted – simply because they are too slow, too consensus driven, too addicted to consultants to be able to match founder-led startups and SMBs.

Today, SMBs have an asymmetric opportunity. In corporations, there is a big fat layer between “we should use AI” and someone actually building a real workflow and implementing and using it productively and creatively. In SMBs, the person who decides is the person in charge of implementation (or one conversation away).

The mistake most SMBs are making is they think: “How do I use AI to do what I already do, but cheaper/faster?”. That is the efficiency play the consulting companies are selling to the numbed CEOs. Yes, it helps margins, helps increase competitiveness against those who don’t implement it, but it doesn’t create moats. The real opportunity for SMBs is the question: “What can we do NOW that was impossible before?”

In a very first step, SMBs need real leadership. A leader who asks: “What business are we actually in, now that AI exists? What would we build if we started today?” – not an operational CEO who says: “Let’s pilot AI in production or marketing, measure productivity gains, then roll out if ROI is positive.” Today – more than ever before – the CEOs actual job is articulating what the company can become, not what it should optimize. To create space for employees to experiment radically, use their intuition and creativity, to act boldly, fail, then rebuild. The task is to kill traditional processes, roles, systems that prevent this new kind of “work” to evolve (in other words throw away any MBA management book).

Yet none of this is possible without “destroying” the old company, while simultaneously building the new one. Some roles will disappear entirely; some people can’t make this transformation. Some revenue streams must be abandoned to free up focus for new ones. Most SMB CEOs can not stomach this. They want transformation AND stability. They want the new moat WHILE keeping things as they are. This leads to nowhere (because nobody is leading). Now more than ever, CEOs of SMBs must transform their organization so they attract and can select – through leadership – those employees who can operate this way. These employees have high agency, they take responsibility and develop and pursue AI strategies for which they’d otherwise pay consultants expensive money for.

But – again – AI is little about AI strategy but about whether you can attract the humans who don’t need one. The startups and companies who are building billion-dollar moats right now aren’t “enabling” their teams to use AI. With visionary leadership, they are continuously rebuilding their teams entirely – meaning they are selecting and attracting people with high agency that “change management” is not necessary, because their leaders and the people they attract are the change.

Most CEOs of SMBs will laugh and pretend these people don’t exist. First, this tells more about the CEO than about “non-existent” talent, and second, they – of course – do exist. They are currently trapped in corporate jobs or building with AI at night only waiting for the leader who speaks their language. They will join companies if they offer at least three things: (1) “impossible” problems (not use AI to improve efficiency by 15%), (2) the permission to fail forward (real ownership and agency, no inconclusive meetings), and (3) visionary leadership through authentic conviction (not consensus-building); a vision so clear they’d be crazy not to join.

If you are asking “how do I enable my current team to use AI?” you have already lost. You must ask: “Am I building the kind of company where the most talented people on earth would actually want to work?”

The answer lies not in your AI strategy. The answer lies in your decision: lead or manage?