The New Leadership Test: What Makes Someone AI-Native?

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0:27David Rice: A growing number of executives say they're AI native. Very few actually are. And the difference is becoming easier to spot than people think. On today's show, I'm talking with JC Christian, president of executive search firm Christian and Timbers, about how the definition of executive credibility is changing and how fast the market is moving on leaders who haven't kept up. AI-enabled means you're using the tools. AI-native means you've rebuilt how you work around them. You're deploying agents, you're getting into business processes and workflows yourself. And you can describe in detail the problem you solved and how you solved it.

1:02David Rice: And that last part is the real test. Most executives can talk confidently about AI strategy. But when you dig into the specifics, what they built, what changed, what the ROI was, the story tends to get a little thinner. JC thinks within a year, AI Native stops being a differentiator and becomes a baseline requirement. not just for CTOs, for every seat at the C-suite table. The end state isn't a chief AI officer sitting alongside traditional executives. It's every executive owning the transformation of their own function. So today, we're covering the real difference between AI-enabled and AI-native at the executive level, why show versus tell has become the new credibility test, how executive search is changing around AI deployment experience, and why today's differentiators become tomorrow's baseline expectations.

1:50David Rice: I'm David Rice. This is People Managing People, and if fluency still feels like a nice-to-have in how you're thinking about leadership, this conversation shows you how quickly that's shifting. All right, well, JC, welcome to the show. Thank you. Very excited to be here today. We were talking before this. I think one of the distinctions that you made that I think is important is the difference between being AI-enabled and AI-native. And those terms, they get used interchangeably most often, but they are fundamentally different. And I'm curious, you know, like if you can kind of describe for the audience, what sort of separates someone who's genuinely AI native at the executive level from somebody who's simply using AI tools at that level?

2:33Yes, I think that's a great question, Dave. And in all candor, you answered it a little bit. I think the AI native leaders of today, it doesn't matter which function area you can be in. And you talk to a ton of CHROs frequently. You can have an amazing AI-native CHRO. You can have an amazing AI-native CTO. And really what that's going to come down to is how well they're deploying models in their workflows and how well that they're really targeting the automation of workflows with agents. So not using RPA, not using old school tools. I talk to people that are like, oh, we just started using Copilot and now we're AI-native.

3:09And it's like, no, unfortunately, you're not. like you're at the very beginning of the AI-enabled adoption curve, if you will. The real leaders are going to get their hands dirty using keyboards. Not that your hands get dirty using keyboards, but they're going to get into the problem set themselves. They're going to be very hands-on. It's almost impossible to be AI-native and be like an armchair or like anything. You have to really tackle the problems head-on, deploy agents as much as you can, and get into business processes and workflows. These are typically people that have great gravitas, great transformation abilities, and are at the top of their game, technically, and have that curiosity is what that formula typically looks like.

3:51David Rice: Hey, you never know. Somebody might get their hands dirty with a keyboard. I used to have a co-worker. His keyboard was a nightmare. I mean, I used to look at it. I've had several of those, yeah. Yeah, I was like, he used to give me chills looking at his keyboard. It was so dirty. That's a good point. I haven't really thought about that, but it's true. It's the difference between sort of prompting and asking it questions and sort of thinking about how you might write a company email as an executive versus fundamentally changing how you think about your work and what's possible and how you're going to model a certain type of behavior.

4:28David Rice: We've seen this before. There was a distinction back in probably about 10 years ago now, but it was digital literacy versus digital transformation. We talk about that. It's similar. You know, because anybody can open an LLM, but being AI native suggests you've rethought sort of how you're going to operate with it. And I think that becomes pretty obvious when you start asking somebody about the problems that they've solved. That's, I think, a fantastic litmus test. I'm glad you brought that up. A good general barometer for this is when you ask somebody how they solved the problem. Most people can't even, like, accurately describe the problem itself, let alone get anywhere near a solution.

5:03but if they're able to like take you in some level of depth into both the problem statement and the solution that's also a really good indicator and that's a red flag if they can't

5:13David Rice: so i think good point around that there a lot of executives can talk confidently about ai strategy right like we've heard a lot of things this year vendors implementation all of these kind of like frameworks for how you do that but when you dig into the details and like we're sticking with this idea of this problem that they've solved and what they've built and changed that's where of the story oftentimes lacks details or clarity. And I even find this, and people will pitch to me to come on this podcast, and then when you start to kind of grill them a little bit, it's like, well, what is the story here?

5:47David Rice: You know what I mean? So I'm curious how you, because you're working so closely with executives and trying to find the right people for the right roles, how has your definition of executive credibility changed over the last couple years as a result of this? Yes, I think there's a couple of things. Back to the deployment use case, walk me through what you've done before and how that affects things. I would say the other thing is whether or not that company has anything publicly that they've stated around like an AI native initiative that's generated ROI. Most companies, if you like listening to shareholder notes and calls, they are extremely eager to demonstrate, oh, we have this ROI or this thing, and those are usually already overblown.

6:33So if you have that limited in nature, typically the company is quite behind and hasn't adopted much nor has deployed much. So I find executive credibility to come from deployments and then how AI native the company is positioning themselves and really bragging about their wins because they overbrag, if you will. So if I'm not bragging at all, that's typically a red flag of not much has gotten done. And if you're the AI lead of deployment at a company and they don't have any AI ROI, it's pretty bleak for being able to claim your role there was a success.

7:05David Rice: It's an interesting shift, right? Traditionally, I think executive credibility sort of came from your ability to recognize patterns and sort of apply your experience. And now it feels like credibility is becoming more demonstrable, I would say. It's less like sort of tell me your vision and more show me what you did over here when this was a problem. Perfect, yeah. The show versus tell is exactly right. Are you seeing any other signals on your end for how CHROs or perhaps talent acquisition teams are looking at credibility with top leaders or others broadly that they're hiring? Well, I think they struggle sometimes with leaders.

7:43David Rice: It's a little bit easier when it's an engineer or it's somebody that you're building a team and you're looking for certain types of characters. And with leaders, if you're looking for use of AI, where we've only gotten into a place where I think now probably maybe half are actually actively using it. So like the traditional leader, you used to look at a resume, a LinkedIn profile, what sort of presence they have. And that's sort of how people would react to it. And now it's like, actually, maybe that stuff doesn't matter as much. What matters is, is like, how well can you dig into this tool and apply it to a big people problem?

8:23David Rice: And that's like much harder because, I mean, even like with HR data, it's a bit of a mess. So telling a good, clean story is not always the easiest thing to do. And well, you're probably seeing this. But I imagine that the interview process as much as the leadership profile is changing. The actual process of what are the right questions to ask this person? and what is the right test to administer to see if we're going to get what we want. That's an interesting component. I think a lot of teams internally actually haven't changed their interview process that much. I think it's mostly still a lot of gut checks.

8:57But a lot of these are pretty decent. If you go and talk to a large consulting firm, they'll give you a bunch of questions to ask. And there's a star formula and a bunch of other formulas that you can use to try to get these discrete examples and then weigh those. And hopefully you have enough evidence by the end of an interview where you're like, yes, thumbs up or thumbs down, or if it's not either of those, then you default to thumbs down or whatever. But I feel that most people still do some type of gut check and you're hoping for enough positive thumbs effectively from enough of the interview panelists that you have the conviction to make a decision.

9:31That is probably an area that companies are looking to improve as well. We often get asked, oh, what types of questions should we be asking? We typically don't want to present a question bank is that seems a little bit synthetic, but some of these things are hard to identify, I think, to your point.

9:48David Rice: It's interesting, too, from the CHRO perspective, right? Because a lot of folks within the industry were hesitant at first with these tools. They didn't trust them. They didn't believe the outputs were necessarily correct. They were slower to adopt it because they felt like people stuff was a little bit more sensitive and you didn't want to experiment too much. And you have some folks who just went out like they were frontiersmen and went crazy, right? There's a big sort of range of experience with it and experimentation with it. And I think what we're seeing is like, there's a lot of learning going on right now.

10:21David Rice: I think it has become more universal and people are starting to see wins and realize what they can do. Some of the early adopters, I think, have really been transitioning. I've noticed it a lot. Like when I look at my LinkedIn connections and a lot of people that I know that have either been on the show or done interviews with me. and they're transitioning into like operations-focused roles. They may even be the head of AI somewhere now because of some of the experimentation that they did. So there's like an evolving role for people leaders that are people who have been in HR. There's sort of like these evolving titles that they're sort of finding their way into, which I think is interesting.

10:59David Rice: Something that we spoke about before this and you brought it up was that leaders that are standing out today, They're not necessarily the deepest specialists. They're the ones that reinvent themselves multiple times throughout their careers. I would ask you, why is reinvention becoming such an important executive capability? I think if you go back to just technology in the world, we're having changes move faster than ever. And so the defensibility of being a specialist to one category and being somewhat static has had more staying power historically than it has today. hey, a thousand years ago, you could be in a profession, not that you live this long, but you could be in a profession for 200 years and a lot might not change.

11:41But today, 40, 50 years ago, you could stay at one company your whole life, get a Rolex at the end of it and call it a day. But that's becoming fewer and fewer, and it's not just, I think, socially for generational purposes, but I think it's also because different companies necessitate different things from the same title or the same kind of function leaders over time. there's this ebb and flow between maybe like human capital and like agentic or machine capital or other forms of capital that are coming to bear. So I suppose that people need to reinvent themselves more quickly just because the technology shifts are demanding it first and foremost.

12:21And we're seeing that absolutely within HR because most HR functions, they're shrinking. It's a cost center. Every cost center in a company is needing to transform. And HR is historically considered a cost center. But I like the argument that the composition of your talent is really the biggest leading indicator of your success as an organization. And most successful PE funds and public company leaders understand this. And of course, they try to staff those areas and the whole company as well as possible. But the need to justify oneself and one's org, I think, is larger than ever. people are looking for efficiencies all over the place.

12:59And now I think for the first time in a very long time, many cost centers are being able to reevaluate themselves as functions and say, hey, how do we now become an area that leads to revenue growth and revenue creation? And HR is trying to find ways to influence all sorts of areas of a company with like the chief AI enablement officer and other initiatives that we're seeing there. And then IT, it's the same thing like it used to be an absolute cost center and now it's like shifting to all about these performance improvements so it's like a very different muscle that you have to flex and i think that's just the name of the game and those that can adapt best are going to do best and

13:36David Rice: it's been that way it's the dawn of humanity but just at a much faster iteration clip now very much so and i'm glad i like that you said muscle right there because it is more muscle but i think 20 30 years ago reinvention maybe felt more like a midlife crisis or something you It's like something that happens to you once, and then you reinvent yourself and you go from there. And now, it isn't. It's very much a muscle that you have to build, and you're not going to be able to predict every shift, and your expertise has a much shorter shelf life than it ever has before. And so adaptability is more valuable than certainty or confidence, even.

14:14I didn't put that two and two together, but you're right. that used to be a midlife crisis or a life crisis that you hopefully, people fear having to reinvent themselves. And that means that maybe their job or their market is in difficulty. And now I think it is more of a, every couple of years, I would expect some level of reinvention or constant reinvention and constant learning, which I think is likely more typical.

14:38David Rice: Yeah, I think I saw somewhere recently that the average lifespan of a skill in the next five years will be about 12 months. And then that skill will be completely transformed by what this technology can do. And so when you think about skills and expertise, it's sort of, you need some and you need that context for how the organization is going to work and sort of like what these machines are doing, obviously. But I think at the executive level, yes, it's very much sort of being able to ask the right questions, being curious about the right things and being able to adapt with what the demands of the day are.

15:14David Rice: Historically, executive hiring, you know, it rewarded experience, like most things in the workplace, right? Like experience was a currency. You know, whether it's how many years you've led teams or how many transformations you've overseen, experience was extremely valuable. AI seems to be shifting the emphasis a little bit more towards agency. Have you actually built something? Have you experimented, learned, or created value yourself? I'm curious from your perspective, like, do you think we're redefining what executive experience actually means? I think you're poking and prodding at the right thing.

15:46So a lot of leaders say, hey, I have like a 20-something-year-old whiz kid who lacks gravitas and transformation experience completely, but has built all this cool stuff and knows AI best. And like, I'm considering, like, do I promote them and make them like my VP of AI adoption or whatever, or do I look externally? I think that is the rub. Most people, it's kind of funny that it's almost like the cutoff age is getting lower. They see these people that are really quite young and inexperienced in their career being the most aggressive and most ambitious with what they can build with AI. But there's no technical barrier for that to actually be the case.

16:26It's pretty easy to use. I think anybody that is curious and close enough to technology can pick up these things because they're typically non-technical roles. Like I know one company that is a, for most intents and purposes, a company that provides software for support and tries to automate a lot of the support function for businesses. They do about a billion a year. And they had some person that they hired into HR and like an ops role. And that person started automating like everything that was in HR. They took out supposedly like, I think they listed like 20 million in cost. Might've been an over-exaggeration as most do.

17:00But I think that's a representative of curiosity being more important than raw experience in many cases. However, the same considerations that existed 20, 10, 50 years ago are in play today, which are around transformation experience and in process technology people experience being just as critical, if not more important than technical experience. Like for a lot of the AI roles that we're doing, if you get somebody who's the best with tools and can build things themselves and lead others to build, great. but adoption is actually the biggest problem. The technology is an easier problem. It's more solvable.

17:38I think you need to get buy-in from all the other stakeholders in an organization. You need to have the gravitas to communicate these things appropriately and you need to have the people skills to build trust. And if you don't do that, adoption is going to be a mess. You're going to get zero value, maybe even negative value and just be a cost without much of an ROI at all to organizations.

17:57David Rice: Well, I'm curious because you talk to a lot of candidates trying to match them with the right role. like we said, have you come across any that, you know, and obviously don't have to name names or anything, but I'm curious if you had seen any stories that kind of impressed you where somebody did build something or experimented or created that value. Because I think like agency is sort of evidence that someone will continue learning rather than simply relying on what they've always learned. And I'm curious if you've seen any stories that really kind of caught your eye or you thought were really impressive.

18:26I have. Yeah. So the typical bar for me, really scale is impressive to me. A lot of companies that I talk to, they have little wins that are like a million dollars or so, but it doesn't really move the needle. I like stories where companies are able to enhance revenue or have some large transformation of a function entirely. So there's one business that's about a 7 billion revenue manufacturing company, and they had business process outsourcing with about 2 ,500 people. That was around the RFQ and RFP process. This is one of the beautiful use cases, I think, of agents in general as it relates to ERP, enterprise resource planning.

19:07Many companies will have 40 plus ERP implementations, like product lifecycle management implementations all over the place. What this does is it makes the process of generating a new quote for a customer very complex because they might need to ask all these different business units for information on inventory and availability for putting together an order and saying, hey, we actually can fulfill this order on behalf of this customer. And these are all the discounting mechanisms that are involved for all these other reasons and purposes. It sounds like a pretty simple software issue, but you basically have all these inconsistencies across all these different ERP implementations and adds sometimes a month to the process to even generate a quote, let alone make a sale to a customer.

19:53So very costly, 2 ,500 people in a BPO, and also parts revenue is the time to revenue in effect as well. So it's an important problem for a lot of businesses, especially ones that live in the world of atoms versus purely bits. There's one company that we've done some work with that they saved about$30 million in cost from taking this BPO-based process, making it entirely an agentic, harmonized layer. So I like to call that ERP harmonization with agents. And we see that as an amazing use case. Argentic workflows that absolutely hits the bottom line is absolutely amazing. And in this case, it also helps throw in recognition and probably also making more sales as well.

20:38Maybe not with this company, they have a bit more of a captive audience where they might just slow down the process to revenue. But for many businesses, if you can get out a quote in minutes versus a day, days, a week, a month, that's going to have better conversion and directly hit top line, which is amazing. So stuff like that is pretty incredible.

20:56David Rice: There's this tension right now. Some of the people, you mentioned workflows there. Some of the people building the most impressive AI workflows, folks in their 20s, they don't have necessarily the executive presence that organizations are expecting, right? At the same time, you've got a lot of seasoned executives who may be just now adopting AI. They have that executive gravitas, but they lack sort of the AI fluency that folks are looking for now. How are you able to kind of bridge that gap? Or how can organizations do better, I guess, with bridging that gap? In effect, there's a lot of demand for people that are in between those two groups in terms of, I would say, like proximity to the technology, but also with executive presence.

21:39And so you typically get people that have both that are likely between that age demographic. And in most cases, that are in highest demand. Because sometimes you want just an amazing transformation change agent who has seen decades of these things. And then you can empower them with a group of really strong FDEs and building an AI-native team around them. That's sometimes a solution. In other cases, you need to find somebody that has a good combination of both. is an up-and-comer in their career, but is strong enough from an executive presence perspective that it solves the problem as well. But I think most companies that end up trying to go the super rising star route with someone in their early 20s, they just can't build the trust and everything else.

22:23Those people are typically really good as like a second-in-command, like chief of staff to maybe sometimes even like a CEO or maybe like a chief people officer or whoever has an AI mandate of transformation. those are typically like really great people to work with but they tend to not be like as good as the cross-cutting cross-functional leaders we need to have all the things you'd want with someone

22:47David Rice: with very strong executive presence to your point i think it's like it underlines the point or kind of the the point that like they need each other actually you know like the the older somebody with a little bit more experience has seen a bit more of these things the gravitas all that they don't probably have time in their current role to really see these edge cases to pursue like, well, how could this look? And the other person does, but they don't necessarily know all the business context or understand why it is that we do this or that. The two need to feed off of each other in a way that's actually really encouraging because we've had enough generational battles in the workplace.

23:27David Rice: So maybe this is the thing that brings us together. Yes. No, seriously, I think that's a really good point and that is a nice optimistic component of the generational challenges as well dave we do see a lot of appreciation i think both ways where some people have respect for people that have gone through these transformations but feel like they understand technology best going and getting that done executing and then there's a reciprocal kind of respect and trust from the more experienced leaders to those that are just ahead of the curve on the tech adoption and agentic adoption so very aptly put you mentioned something earlier you You mentioned the Chief AI Enablement Officer, and that's a title I've seen bouncing around a little bit more recently.

24:07David Rice: And there's new titles emerging. It feels like Chief Transformation Officer is another one that I've seen a little bit of. And at the same time, we're seeing sort of traditional C-suite positions blur a little bit, right? Like I've noticed HR folks get more of an operations focus, for example. Do you think those are temporary? And are these like bridge roles? or are we watching the executive team itself get redesigned around AI? I think you're likely going to have more of the latter than the former. Where it lands might be different. Most companies might get rid of the chief transformation officer.

24:43I'm not calling that rollout in particular, but just a newer role like that might not stick. But I think we are getting an expansion and kind of dynamicness and flexibility that is here to stay around companies' needs. I think a lot of the roles are going to be around jobs to be done that are often company-specific. And the title might change between companies. And there's a good amount of confusion between companies because it's like, oh, we want to hire a chief AI officer. And so we want a VP of AI. It's like, well, it depends on what you actually want that person to do day-to-day. and that's like a struggle for a lot of companies is the source environment of where they're actually going to like pull people from on a title basis and they'll often completely miss a ton of very qualified candidates that they actually want to be hunting as their main candidate because the titles can be blurry and different depending on the companies even if they're doing something very similar in these roles.

25:44So I think there's going to be more of that. There's going to be more of a breadth of titles and then what matters most is what you actually did. And that goes back to the questions around ROI and what you actually deployed, what you were actually responsible for, and whatnot. I think you're right there. And I think executive teams,

26:02David Rice: they've always evolved around major shifts in business, whatever that was. We saw it with digital, cybersecurity, customer experience, some of these things down the years. I think AI is probably not just going to create new titles. It's just going to force every executive to become partially an AI role. right? Like the end state isn't, you have like your AI executive. It's probably every executive understands this technology to some depth and it has some experience deploying it and using it. I agree. If we fast forward a year from now, knowing what you know kind of about where the market is and what's changing, what's one thing you think organizations will look for in executive candidates that today still feels like a nice to have?

26:46I think the branding of being AI native will become a requirement for anybody that is prepping for a future. A lot of companies are just trying to survive. There's a lot of very large companies, even well-known brands that I think are just hanging on for dear life and can't make these investments. But I think the companies that do have the cash and the ambitions for a highly competitive, bright future are going to mandate all executives are AI native. And that's going to be something that exists whether you're a CHRO, a CTO, a CEO. Everybody needs to be a master of their own domain from a business process perspective and know how to partner with engineers internally, FDEs internally to have rapid transformation and growth.

27:31And I think the, what were we saying earlier about that kind of reinvention of yourself, of one's own business unit, that's going to be a hard requirement. And I think a part of the working definition of most job descriptions moving forward are people that are truly AI native and can truly upgrade the AI nativeness of the executive team, if you will. I think those are going to be continually demanded components.

27:53David Rice: Yeah, absolutely. I mean, today, I feel like it's like this kind of for all of us, right? Like today's differentiators become tomorrow's baseline expectations of us all, right? So, yeah, I think eventually some of this will stop being asked because it'll be more assumed, you know, like if you've gotten to this point, to a certain point that you're able to do these. I mean, we'll still have to demonstrate it, obviously. But the bigger lesson is, you know, you mentioned there that AI Native will eventually become as expected as financial literacy. your strategic thinking in these positions. So if you can translate technology into organizational change, you might just stand out.

28:30You might just. Are there things that you're seeing from any of the CHROs that you're talking to that you think are here to stay that are nice-to-haves right now?

28:38David Rice: I definitely think being able to manage the relationship between the people data and the system itself. You've got to be able to find the right data to feed it and to keep it in context. and just, you know, the judgment piece for CHROs is going to be massive because the workforce is going to shrink. You've got to be able to shrink it in the right areas in the right ways without doing a lot of damage. It's interesting because it's changing so fast. I mean, the stuff I was talking about a year ago feels to me like now, I'm like, well, yeah. You know, at the time it felt like it felt really interesting or like we were on, you know, the edge of something and now you're just like, well, yeah, it's a year later and duh.

29:19David Rice: I mean, I imagine some of this by the time next year will be that way. And that's just kind of the way it is now. Yeah, I don't know. You know, like you said, it has to transform from being a cost center and sort of not thinking in the traditional ways is going to be a huge shift for HR because it tends to move a little bit slower than other parts of the business anyway. Indeed. All right. Well, JC, thanks for coming on the show. It's been great chatting with you. Yes. Thank you for having me, Dave. A true pleasure. Well, listeners, if you haven't done so already, head on over to peoplemanagingpeople.com forward slash subscribe.

29:49David Rice: Get signed up for the newsletter. Check out Christian and Timbers, everything they've got going on. I'm sure you can follow them and JC on LinkedIn, of course. And until next time, you got to be flexible. So however you're going to get to AI native, it's not going to be because you weren't adaptive. Be adaptive.