A UDEMY SURVEY REPORT

The GenAI
Transformation:
Perspectives on
Leadership
Leaders need new
skills for generative AI
transformation
The GenAI transformation is the technological phenomenon of our generation. On the
Udemy Business Platform, the US-based consumption of ChatGPT learning surged
5,226% in Q1 2023 alone. This surge demonstrates the rapidly growing importance
of learning GenAI skills to keep up with the scope of the change we are seeing in the
workplace. No other recent phenomenon is likely to have as much impact on how we
work and how we live. “A megatrend with systemic, existential implications,” according
to PwC, GenAI is “poised to transform business models, redefine work processes, and
overhaul entire industries.” While some roles, industries, and regions might be affected
more than others, every employee will feel the tremors of these seismic shifts. This
means that no other topic is more pivotal for today’s leaders.

To measure how leaders are meeting the challenge of generative

AI initiatives in their organizations, we launched a public survey
in January 2024 that gathered more than 2,500 responses from
employees across industries, levels of seniority, and company sizes.
We asked for their perspectives on the role of their leadership
team in navigating through GenAI transformation. In particular, we
sought responses on how their leaders are stacking up with the
expectations of their employees when it comes to some common
behaviors critical to successful generative AI initiatives.

The GenAI Transformation: Perspectives on Leadership 2

We dive into the survey findings in this report, looking at the overall and
segmented data results to shed light on how employees in today’s
organizations are thinking about what they need from their leaders when it
comes to generative AI.
Before examining the findings, it’s critical to understand more about the current context
of this transformation. We’re in the early days of the GenAI age, but a KPMG survey found
that three in four business leaders (74%) rank generative AI as the top emerging technology
that will impact their business over the next year and a half. There is a substantial risk to
companies that are sitting back and doing nothing. Organizations that don’t tackle the work
of enabling their employees now stand to lose out on near-term benefits like increased
productivity and a competitive advantage in the future. While many leaders know this, most
are not embracing widespread adoption in their companies. In a BCG survey of C-suite
executives, only 6% have trained more than a quarter of their employees on GenAI tools to
date, and 90% are “observers,” only focusing on limited experiments or small-scale pilots
with GenAI.
When it comes to perceptions of GenAI, sentiment is mixed, with leadership teams and
employees seeing the transformation differently. A majority of business and technology
leaders polled in a recent Deloitte survey identify excitement as a top emotion when it comes
to generative AI — though there are also concerns noted by this group. Employees feel
differently. Among the employees in an EY survey of US knowledge workers, nine out of 10
have had exposure to GenAI in their work already. While 76% say AI has had a positive impact
on their personal experience at work, nearly an equivalent number are concerned that AI
adoption might make some jobs obsolete (75%) or have negative impacts on pay/salary (72%)
or career growth.

The GenAI Transformation: Perspectives on Leadership 3

It’s not surprising that employees and leaders alike have mixed emotions about the change
GenAI will bring. Like any transformative change, it is likely to impact the workforce in both
positive and negative ways. While numerous jobs will undergo changes necessitating that
employees cultivate new skills to adapt to generative AI, it will also usher in many fresh
opportunities. Although certain roles may be replaced entirely, there will be a concurrent rise
in new job opportunities. There might ultimately be a net increase in employment, but it’s
crucial to acknowledge The World Economic Forum’s projection that the transition process
over the next five years is likely to pose significant disruptions to numerous employees and
organizations. According to WEF’s research, as much as 23% of positions are expected to
experience shifts in employee allocation and job roles during this period.
But there is promise in how the workplace could evolve. New models of work made possible
by GenAI may enable companies to change how talent is deployed, allowing them to remain
agile and upskill at the pace required. Generative AI makes it possible for forward-thinking
companies to move to a skills-based approach, redefining how talent is hired and managed.
A focus on the skills employees have allows their employers to focus on their potential, above
their educational pedigree or experience. This approach could help solve talent resourcing
issues while also resulting in more equitable treatment for applicants and employees.

The GenAI Transformation: Perspectives on Leadership 4

Generative AI initiatives are quickly becoming a primary area of focus for many organizations,
with the level of investment skyrocketing. Gartner estimates that global IT spend will grow
6.8% this year alone, to $5 trillion. The stakes couldn’t be higher. AI is a top strategic priority,
with BCG finding that 89% of executives rank AI and GenAI as a top-3 tech priority in 2024,
and 85% reporting that they will increase their spending on these technologies this year. Not
only is it critical to recognize increased productivity to create a return on these investments,
but it is also essential to prepare employees and organizations for the new economy and new
ways of work that GenAI is creating.
For companies to come through this transformation and thrive amidst change, leadership
is key. If leaders don’t have the roadmap to guide their teams through change and the
skills to do so effectively, business outcomes as well as employee engagement will suffer.
Organizations may struggle to keep up with their competition and to remain innovative and
adaptive. Leadership remains the essential ingredient to GenAI transformation.

Leadership is critical in driving successful digital transformation.

Leaders need to create a vision for the future, inspire and motivate
their teams, and make the necessary strategic decisions to drive
change. They also need to be comfortable with ambiguity and
uncertainty, as digital transformation often involves venturing
into new territories and experimenting with new technologies and
business models. Without strong leadership, digital transformation
initiatives are likely to fail, as organizations struggle to align their
efforts and stay focused on their strategic objectives.
— Sunil Gupta, Edward W. Carter Professor of Business Administration,
Harvard Business School from Driving Digital Strategy: A Guide to Reimagining Your Business.
Harvard Business Review Press, 2018.

The GenAI Transformation: Perspectives on Leadership 5

Here are the leadership lessons
you’ll unlock in this report:

1 2
Overall takeaways: Leadership GenAI readiness across
through GenAI transformation roles: Middle management
is essential – and our leaders at a crossroads
are falling short

3 4
Enterprises are paving the way Technology, finance, and
for generative AI adoption professional services industries
lead in GenAI readiness

The GenAI Transformation: Perspectives on Leadership 6

1
Leadership & GenAI By role By organization size By industry

Overall takeaways:
Leadership through
GenAI transformation
is essential — and our
leaders are falling short

The GenAI Transformation: Perspectives on Leadership 7

Leadership & GenAI By role By organization size By industry

When a change to the workplace has implications as profound and far-reaching as the GenAI
transformation, organizational leadership will play a key role. And employees understand this.
The majority of the employees we surveyed believe that their leadership team is critical to
this change, but that their leaders haven’t mastered some essential elements required for the
organization to navigate through it and come out ahead.

Taking the pulse on leadership and generative AI readiness

88% 55% 48% 44% 42%

Importance Confidence Readiness Risk managment Communication

Of leadership to That the leadership Of the leadership The leadership team From leadership
the success of team will make GenAI a team for successful can manage ethical to employees on
GenAI initiatives competitive advantage GenAI initiatives issues and risks GenAI initiatives

The importance of effective leadership

Thanks largely to GenAI, as many as 30% of all work hours in the US economy could be
automated in the next seven years, according to McKinsey. At the same time, there will be
considerable advantages for those who are able to harness GenAI effectively in their work.
They should be able to focus on more strategic tasks and objectives, leaving more mundane
and repetitive work to GenAI.
Leaders will need to decide where they want to take their companies and how GenAI can
help them get there. Doing so has the potential to produce concrete business outcomes; a
recent Deloitte survey found that most organizations are initially targeting more immediate
benefits, such as increased productivity and efficiency, and reduced costs. A smaller group
of organizations reported targeting more strategic outcomes, such as greater innovation and
growth. Companies that lean into GenAI to drive innovation may be able to enhance products
and services or generate new ones, redesign employee and customer experiences, and
enable new business models and ways of working.
Making these kinds of changes will require a cohesive strategy, realistic planning, and above
all, upskilling and reskilling employees en masse to enable them to leverage GenAI in their
work. For these reasons alone, the importance of effective leadership for the success of
GenAI initiatives is critical.

The GenAI Transformation: Perspectives on Leadership 8

Leadership & GenAI By role By organization size By industry

When we polled employees on how important the role of their leadership team would be to
the success of their GenAI initiatives, the response was unequivocal. The overwhelming
majority of employees — a full 88% — recognize the importance of effective leadership
in successfully launching generative AI initiatives at their companies.

The importance of effective leadership for GenAI success

Survey Q: How important will effective leadership be to the success of your generative AI initiatives?

42%

30%

16%

7%
1% 4%

Not at all important Somewhat important Very important

A lack of confidence in leadership’s readiness for

GenAI transformation

The employees surveyed understand the important role leadership must play to guide teams
through the complexity and turbulence that generative AI will bring to most industries and
organizations. Yet, many of them lack confidence in the ability of the company’s leadership to
do so. While our survey found that 55% are somewhat confident to very confident that the
leadership team at their company is ready to lead them through this transition ahead of the
competition, this leaves a full 45% who are not confident that their leaders have the skills
needed. When it comes to belief in their leaders’ readiness, fewer than half (48%) believe that
their leadership team is ready to lead successful GenAI initiatives.
In part, this is because many employees are daunted by the arrival of GenAI, the perceived
effects it may have on their jobs, and the recognition that their leaders may also be feeling the

The GenAI Transformation: Perspectives on Leadership 9

Leadership & GenAI By role By organization size By industry

same. A recent survey of US employees from EY identified growing anxiety among employees
when it comes to AI’s role in the workplace. As GenAI is used more widely in work, anxieties
have actually increased, with 71% of employees voicing concerns. Almost half (48%) are more
concerned about AI than they were a year ago. Where leaders are unprepared and trying to catch
up to the speed of GenAI transformation, it is negatively impacting their teams’ confidence in
their readiness. It will be an essential hurdle for all leaders to counter employee anxiety and lack
of confidence in order to guide their organizations through successful GenAI initiatives.
These indicators are warning signs for organizational leaders. As PwC states, the primary
challenge for C-suite leaders hoping to prioritize transformation is that they have to reinvent
their organizations, but: “Without the support and energy of all your people, these efforts
will fail.” All employees have to be brought along on the journey — and have to buy into the
journey — in order for GenAI transformation to be a success.

Confidence in leadership’s ability to lead through

generative AI for competitive advantage
Survey Q: How confident are you that your leadership team will bring your organization through the
GenAI transformation ahead of the competition?

23%

18% 18% 18%

14%

10%

Not at all confident Somewhat confident Very confident

Generative AI has evolved to one of the fastest user-adopted technologies,

and as regulators and C-suite leaders struggle to keep up, it’s causing
a sense of discontinuity, confusion, and even a loss of control among
employees. As businesses continue to adopt generative AI, leaders must
keep employees at the center and help overcome fear-based barriers to
usher in a new era of productivity and growth.

— Dan Diasio, EY Global Artificial Intelligence Consulting Leader

The GenAI Transformation: Perspectives on Leadership 10

Leadership & GenAI By role By organization size By industry

Perceptions of the leadership team’s GenAI readiness

Survey Q: Do you believe your leadership team is ready to successfully lead GenAI initiatives at
your organization?

23%
23%
20%

18%

9% 9%

Not at all ready Somewhat ready Very ready

Leaders need to communicate the strategy and acknowledge

the difficulties

Why are employees lacking in confidence and doubting their leaders’ readiness? Part of the
answer is in how well-prepared their leadership team appears to be when it comes to the
complexities and risks of GenAI initiatives. These new tools are powerful and transformative,
but the risks they present also need to be honestly addressed and mitigated upfront. Over half,
56% of survey respondents, do not view their leadership team as equipped to manage the
ethical issues and risks that broad GenAI usage necessarily creates for any company.
Another key to the negative perception of leadership when it comes to generative AI
initiatives stems from communication. Employees who took the survey ranked their leaders’
communication of company GenAI strategy and initiatives lower than any other area measured.
Almost three in five (58%) report that leadership is not communicating well with
employees about their companies’ GenAI strategies and initiatives.
Leaders are standing between a rock and a hard place. They are caught between what PwC
calls “the need for prudence and risk mitigation and the importance of moving quickly to
grab emerging opportunities.” But they will only navigate this passage successfully if their
employees are bought into the mission. Communication of a clear and compelling vision, as
well as a realistic assessment of risk and reward, is essential for this to happen. All the more so
when it comes to a transformation on the scale of GenAI, which will leave virtually no employee
untouched. While as many as 69% of CEOs in PwC’s Annual Global CEO Survey report that they
plan to invest in technologies like AI this year, another survey from PwC finds that only 21% of
employees believe that they will gain new job opportunities from the GenAI transformation. The
solution to this imbalanced perception is more effective communication from leadership.

The GenAI Transformation: Perspectives on Leadership 11

Leadership & GenAI By role By organization size By industry

Continually communicate why AI is important and how it fits into the

company’s goals. Explain how AI can make employees’ jobs better and
not replace them, and highlight that amassing AI skills will be critical
for workers to succeed in their careers going forward. But remember
that communication should be a two-way street. Provide mechanisms
to gather feedback from employees about their AI experiences, and use
it to refine tools and training programs and address any concerns or
challenges.
— PwC

Leaders aren’t ready for the risks and ethical issues that
are coming
Survey Q: How well equipped is your leadership team to manage the ethical issues and risks of
implementing broad GenAI usage in your organization?

25%
22%
19%

12% 12%
10%

Not at all equipped Somewhat equipped Very equipped

The GenAI Transformation: Perspectives on Leadership 12

Leadership & GenAI By role By organization size By industry

Better communication is needed around GenAI initiatives

and strategies
Survey Q: How well is your leadership team communicating your company’s GenAI strategies or
initiatives to employees?

26%

19% 19%

13% 13%
10%

Not at all well Somewhat well Very well

The GenAI Transformation: Perspectives on Leadership 13

2
GenAI readiness across
roles: Middle management
at a crossroads

The GenAI Transformation: Perspectives on Leadership 14

Leadership & GenAI By role By organization size By industry

Preparing middle management for driving the adoption of generative AI initiatives will
be critical for executives to ensure the success of this technical transformation, as these
managers lead the majority of employees overall within the organization. Yet according to
the employees surveyed, those in managerial roles reported the lowest ratings for overall
leadership team readiness, communication, risk management, and the lowest confidence
in the leadership team’s ability to stay ahead of the competition. Only 46% of middle
managers believe their leadership team is ready to lead GenAI initiatives successfully,
compared to 52% of VP/C-level and individual contributors. Similarly, middle
management is not as quick to believe that leaders will help push their company through this
AI transformation ahead of the competition, with only 53% expressing confidence in their
leadership team compared to 60% of executive-level leaders.
What is the source of this discrepancy in perception between frontline managers and
executive staff when it comes to organizational readiness for generative AI? According to
McKinsey, unlike previous industrial revolutions that impacted the lowest-skilled workers,
GenAI is more likely to automate the activities of more educated workers. With GenAI’s
natural language capabilities, it is possible that there is anxiety on the part of these managers
that AI tools could replace some of their essential functions. Middle managers are responsible
for tactical execution, strategy, planning, and forecasting, many functions that could be
streamlined through GenAI skills. However, many of them may not have learned these skills
yet, particularly to address such a broad array of responsibilities.

It falls to executive teams to mitigate the anxieties that middle management and some
individual contributors have about generative AI in the workplace. “If worker transitions and
risks are well managed, generative AI could contribute substantively to economic growth,” says
McKinsey. While the future looks bright with AI, it’s possible that a carefully communicated
vision for the technology is lacking from the top, with middle managers fielding the brunt of
this concern. Another explanation is that these frontline managers see firsthand what their
employees are grappling with — the reality of boots on the ground, as it were — and that that
reality doesn’t match up well with the vision that leadership is communicating.
In addition to the need for a change management plan, accessible training in generative AI
uses, outcomes, and tools can go a long way in calming employee fears. “Nearly two-thirds
(64%) of leaders say they haven’t been given adequate training to take advantage of AI,”
according to a Forrester Consulting and Workday survey. Upskilling employees of all levels,
including frontline managers, will be imperative for boosting confidence and long-term
success. The same Forrester research finds that when employees are trained on AI, “the
technology is demystified, and concern levels drop and engagement rises.”

The GenAI Transformation: Perspectives on Leadership 15

Leadership & GenAI By role By organization size By industry

When managers automate more of their administrative and reporting tasks,

for example, they can spend more time on strategic thinking and coaching.

— McKinsey

Middle management GenAI sentiment compared to executives

and ICs

VPs+ Managers ICs

Importance

Confidence

Readiness

Risk management

Communication

0% 20% 40% 60% 80% 100%

The GenAI Transformation: Perspectives on Leadership 16

3
Enterprises are paving
the way for generative
AI adoption

The GenAI Transformation: Perspectives on Leadership 17

Leadership & GenAI By role By organization size By industry

Respondents who work at large companies with over 5,000 employees are more likely
to report that their companies are prepared to navigate the generative AI future when
it comes to risk management, clear communication, confidence, and overall readiness.
With this positive outlook, it’s not surprising to see that 56% of employees at large
companies also believe that their leadership team is ready to successfully lead
generative AI initiatives. Conversely, the majority of those at companies with fewer than
5,000 employees find communication on AI strategy to be lacking — 61% of respondents
believe their company’s leaders are not effectively communicating AI strategies and
initiatives across the organization.
Due to their sheer size and more readily available resources, larger enterprises are generally
better positioned to adapt their internal systems and workforce expertise to a technical
transformation like we’re seeing with generative AI. Leaders, particularly those in HR and
Learning & Development functions, are vital to the success of GenAI strategies. Those who
build strong change management programs that focus on skills training, offer employees
transparency into how AI tools will be used, and clarify what sort of outcomes are expected,
will see their workforce adapt better and more quickly.
Small to midsize businesses without the budgets of enterprises need not fall behind in AI —
but leadership is especially critical here. Investment in GenAI tools can provide productivity
boosts to offset hiring constraints and support teams already operating beyond capacity.
However, employees are looking for leaders to set the tone for an AI transformation by
carefully and transparently communicating the desired outcomes of AI alongside its risks,
while quickly equipping employees with the skills to use AI effectively to drive future
business success.

The GenAI Transformation: Perspectives on Leadership 18

Leadership & GenAI By role By organization size By industry

Small- and mid-cap companies often face resource limitations that

hinder their ability to pursue growth and innovation. Limited financial
resources, a smaller workforce and a narrower range of expertise
restrict their capabilities.

— Alvarez and Marsal

Large companies of 5K+ employees appear ahead of the

GenAI leadership curve

Over 5,000 Under 5,000

Importance

Confidence

Readiness

Risk management

Communication

0% 25% 50% 75% 100%

The GenAI Transformation: Perspectives on Leadership 19

4
Leadership & GenAI By role By organization size By industry

Technology, finance,
and professional
services industries lead
in GenAI readiness

The GenAI Transformation: Perspectives on Leadership 20

Leadership & GenAI By role By organization size By industry

Our survey results find that specific industries are frontrunners when it comes to reporting
positive sentiments about their organization’s integration of generative AI. Respondents in
the technology, financial services, and professional services industries consistently
rate their leadership team’s readiness, communication, confidence, and management
of ethical issues about generative AI more positively. Nearly three out of five (58%) of
technology employees, 54% of professional services employees, and 48% of financial
services employees believe their organizations’ leaders are ready to lead generative AI
initiatives successfully.
These numbers highlight a stark difference from the sentiments reported by retail,
manufacturing, and non-profit employees. Only 37% of retail, 38% of manufacturing, and
36% of non-profit employees believe their organizations’ leaders are ready to lead
generative AI initiatives successfully.
Adoption of new technologies and tools is particularly critical for professional services that
need to highlight generative AI skills and expertise to attract and retain clients. An IDC and
Workday survey finds professional services firms embracing GenAI to improve resource
management and planning forecasts. These tasks traditionally drain managers’ billable
time and take away from delivering strong customer outcomes. In financial organizations
like Morgan Stanley, McKinsey finds that GenAI plays the role of a colleague to help wealth
managers synthesize knowledge from a large internal knowledge base.
The use of inefficient legacy systems and processes in retail, manufacturing, and non-
profit industries (identified in research from McKinsey and Workday) could explain the low
confidence among our survey respondents from these industries in the future of GenAI
initiatives at their companies. The transformative uses of GenAI will not be seen in these
industries without strong buy-in from leadership who can identify the productivity gains that
can be made in the long term as a result of investments in systems overhauls and extensive
employee development efforts.

The GenAI Transformation: Perspectives on Leadership 21

Leadership & GenAI By role By organization size By industry

From surveying an array of industries, a pattern becomes clear: legacy

systems, clunky processes, murky insights, and little-to-no automation
are hampering companies.

— Workday

Industry-level GenAI preparedness: Measured by

readiness and leadership communication
company’s GenAI strategies or initiatives to employees?

60%
How well is your leadership team communicating your
Communication

40%

20%

60%
20% 40%

Readiness
Do you believe your leadership team is ready to successfully lead
GenAI initiatives at your organization?

Technology Professional Financial services Education

services/Consulting
Manufacturing Retail Non-profit Other

The GenAI Transformation: Perspectives on Leadership 22

Leadership & GenAI By role By organization size By industry

Leaders need the skills to guide their teams through

GenAI transformation

Udemy’s 2024 Leadership and AI Readiness Survey makes it clear that leadership teams have
their work cut out for them when it comes to guiding their companies and employees through
generative AI transformation. Whatever strides they believe they have made to prepare
their companies, employees are seeing gaps in terms of what is still needed.
Any disruptive workplace shift requires strong change management from leaders in order to
help employees adapt and thrive. A change as disruptive as GenAI transformation has the
potential to end in a net gain for companies and employees if leadership remains ahead of the
change, preparing a cohesive strategy and communicating a compelling vision to employees
so they gain the skills, agility, and resilience needed to come out ahead.
Our survey shows that many leaders do not yet have the skills they need to lead their
companies through change. The Udemy Business Leadership Academy offers Leading GenAI
Innovation to help them prepare.

Data methodology:
In January 2024, Udemy launched a public survey regarding generative AI and leadership.
We received more than 2,500 responses to the survey. All opinions and demographic data,
including industry, company size, and employee seniority level were self-reported.

The GenAI Transformation: Perspectives on Leadership 23

About
Udemy Business
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providing flexible, effective skills development to empower
organizations and individuals.

Udemy Business enables employers to offer on-demand

learning for all employees, immersive learning for tech teams,
and cohort learning for leaders. With our complete learning
solution and strategic partnership, we provide relevant
learning at scale so organizations can build agile workforces
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Learn more at business.udemy.com

The GenAI Transformation: Perspectives on Leadership 24