Might Habib, co-founder and CEO of Author AI, delivered one of many bluntest assessments of company AI failures on the TED AI convention on Tuesday, revealing that almost half of Fortune 500 executives consider synthetic intelligence is actively damaging their organizations — and inserting the blame squarely on management's shoulders.
The issue, in response to Habib, isn't the expertise. It's that enterprise leaders are making a class error, treating AI transformation like earlier expertise rollouts and delegating it to IT departments. This strategy, she warned, has led to "billions of dollars spent on AI initiatives that are going nowhere."
"Earlier this year, we did a survey of 800 Fortune 500 C-suite executives," Habib advised the viewers of Silicon Valley executives and buyers. "42% of them said AI is tearing their company apart."
The analysis challenges standard knowledge about how enterprises ought to strategy AI adoption. Whereas most main firms have stood up AI process forces, appointed chief AI officers, or expanded IT budgets, Habib argues these strikes replicate a elementary misunderstanding of what AI represents: not one other software program device, however a wholesale reorganization of how work will get carried out.
"There is something leaders are missing when they compare AI to just another tech tool," Habib stated. "This is not like giving accountants calculators or bankers Excel or designers Photoshop."
Why the 'previous playbook' of delegating to IT departments is failing firms
Habib, whose firm has spent 5 years constructing AI techniques for Fortune 500 firms and logged two million miles visiting buyer websites, stated the sample is constant: "When generative AI started showing up, we turned to the old playbook. We turned to IT and said, 'Go figure this out.'"
That strategy fails, she argued, as a result of AI basically adjustments the economics and group of labor itself. "For 100 years, enterprises have been built around the idea that execution is expensive and hard," Habib stated. "The enterprise built complex org charts, complex processes, all to manage people doing stuff."
AI inverts that mannequin. "Execution is going from scarce and expensive to programmatic, on-demand and abundant," she stated. On this new paradigm, the bottleneck shifts from execution capability to strategic design — a shift that requires enterprise leaders, not IT departments, to drive transformation.
"With AI technology, it can no longer be centralized. It's in every workflow, every business," Habib stated. "It is now the most important part of a business leader's job. It cannot be delegated."
The assertion represents a direct problem to how most massive organizations have structured their AI initiatives, with centralized facilities of excellence, devoted AI groups, or IT-led implementations that enterprise items are anticipated to undertake.
A generational energy shift is going on primarily based on who understands AI workflow design
Habib framed the shift in dramatic phrases: "A generational transfer of power is happening right now. It's not about your age or how long you've been at a company. The generational transfer of power is about the nature of leadership itself."
Conventional management, she argued, has been outlined by the flexibility to handle complexity — huge groups, huge budgets, intricate processes. "The identity of leaders at these companies, people like us, has been tied to old school power structures: control, hierarchy, how big our teams are, how big our budgets are. Our value is measured by the sheer amount of complexity we could manage," Habib stated. "Today we reward leaders for this. We promote leaders for this."
AI makes that mannequin out of date. "When I am able to 10x the output of my team or do things that could never be possible, work is no longer about the 1x," she stated. "Leadership is no longer about managing complex human execution."
As an alternative, Habib outlined three elementary shifts that outline what she calls "AI-first leaders" — executives her firm has labored with who’ve efficiently deployed AI brokers fixing "$100 million plus problems."
The primary shift: Taking a machete to enterprise complexity
The brand new management mandate, in response to Habib, is "taking a machete to the complexity that has calcified so many organizations." She pointed to the layers of friction which have amassed in enterprises: "Brilliant ideas dying in memos, the endless cycles of approvals, the death by 1,000 clicks, meetings about meetings — a death, by the way, that's happening in 17 different browser tabs each for software that promises to be a single source of truth."
Fairly than accepting this complexity as inevitable, AI-first leaders redesign workflows from first ideas. "There are very few legacy systems that can't be replaced in your organization, that won't be replaced," Habib stated. "But they're not going to be replaced by another monolithic piece of software. They can only be replaced by a business leader articulating business logic and getting that into an agentic system."
She supplied a concrete instance: "We have customers where it used to take them seven months to get a creative campaign — not even a product, a campaign. Now they can go from TikTok trend to digital shelf in 30 days. That is radical simplicity."
The catch, she emphasised, is that CIOs can't drive this transformation alone. "Your CIO can't help flatten your org chart. Only a business leader can look at workflows and say, 'This part is necessary genius, this part is bureaucratic scar tissue that has to go.'"
The second shift: Managing the worry as profession ladders disappear
When AI handles execution, "your humans are liberated to do what they're amazing at: judgment, strategy, creativity," Habib defined. "The old leadership playbook was about managing headcount. We managed people against revenue: one business development rep for every three account executives, one marketer for every five salespeople."
However this liberation carries profound challenges that leaders should deal with straight. Habib acknowledged the elephant within the room that many executives keep away from discussing: "These changes are still frightening for people, even when it's become unholy to talk about it." She's witnessed the worry firsthand. "It shows up as tears in an AI workshop when someone feels like their old skill set isn't translated to the new."
She launched a time period for a typical type of resistance: "productivity anchoring" — when staff "cling to the hard way of doing things because they feel productive, because their self-worth is tied to them, even when empirically AI can be better."
The answer isn't to look away. "We have to design new pathways to impact, to show your people their value is not in executing a task. Their value is in orchestrating systems of execution, to ask the next great question," Habib stated. She advocates changing profession "ladders" with "lattices" the place "people need to grow laterally, to expand sideways."
She was candid in regards to the disruption: "The first rungs on our career ladders are indeed going away. I know because my company is automating them." However she insisted this creates alternative for work that’s "more creative, more strategic, more driven by curiosity and impact — and I believe a lot more human than the jobs that they're replacing."
The third shift: When execution turns into free, ambition turns into the one bottleneck
The ultimate shift is from optimization to creation. "Before AI, we used to call it transformation when we took 12 steps and made them nine," Habib stated. "That's optimizing the world as it is. We can now create a new world. That is the greenfield mindset."
She challenged executives to establish assumptions their industries are constructed on that AI now disrupts. Author's prospects, she stated, are already seeing new classes of progress: treating each buyer like their solely buyer, democratizing premium companies to broader markets, and coming into new markets at unprecedented velocity as a result of "AI strips away the friction to access new channels."
"When execution is abundant, the only bottleneck is the scope of your own ambition," Habib declared.
What this implies for CIOs: Constructing the stadium whereas enterprise leaders design the performs
Habib didn't go away IT leaders with out a function — she redefined it. "If tech is everyone's job, you might be asking, what is mine?" she addressed CIOs. "Yours is to provide the mission critical infrastructure that makes this revolution possible."
As tens or tons of of 1000’s of AI brokers function at numerous ranges of autonomy inside organizations, "governance becomes existential," she defined. "The business leader's job is to design the play, but you have to build the stadium, you have to write the rule book, and you have to make sure these plays can win at championship scale."
The formulation suggests a partnership mannequin: enterprise leaders drive workflow redesign and strategic implementation whereas IT supplies the infrastructure, governance frameworks, and safety guardrails that make mass AI deployment protected and scalable. "One can't succeed without the other," Habib stated.
For CIOs and technical leaders, this represents a elementary shift from gatekeeper to enabler. When enterprise items deploy brokers autonomously, IT faces governance challenges in contrast to something in enterprise software program historical past. Success requires real partnership between enterprise and IT — neither can succeed alone, forcing cultural adjustments in how these capabilities collaborate.
An actual instance: From multi-day scrambles to on the spot solutions throughout a market disaster
To floor her arguments in concrete enterprise affect, Habib described working with the chief consumer officer of a Fortune 500 wealth advisory agency throughout current market volatility following tariff bulletins.
"Their phone was ringing off the hook with customers trying to figure out their market exposure," she recounted. "Every request kicked off a multi-day, multi-person scramble: a portfolio manager ran the show, an analyst pulled charts, a relationship manager built the PowerPoint, a compliance officer had to review everything for disclosures. And the leader in all this — she was forwarding emails and chasing updates. This is the top job: managing complexity."
With an agentic AI system, the identical work occurs programmatically. "A system of agents is able to assemble the answer faster than any number of people could have. No more midnight deck reviews. No more days on end" of coordination, Habib stated.
This isn't about marginal productiveness beneficial properties — it's about basically completely different working fashions the place senior executives shift from managing coordination to designing clever techniques.
Why so many AI initiatives are failing regardless of huge funding
Habib's arguments arrive as many enterprises face AI disillusionment. After preliminary pleasure about generative AI, many firms have struggled to maneuver past pilots and demonstrations to manufacturing deployments producing tangible enterprise worth.
Her analysis — that leaders are delegating slightly than driving transformation — aligns with rising proof that organizational components, not technical limitations, clarify most failures. Corporations typically lack readability on use instances, battle with knowledge preparation, or face inside resistance to workflow adjustments that AI requires.
Maybe probably the most hanging side of Habib's presentation was her willingness to acknowledge the human value of AI transformation — and demand leaders deal with it slightly than keep away from it. "Your job as a leader is to not look away from this fear. Your job is to face it with a plan," she advised the viewers.
She described "productivity anchoring" as a type of "self-sabotage" the place staff resist AI adoption as a result of their id and self-worth are tied to execution duties AI can now carry out. The phenomenon means that profitable AI transformation requires not simply technical and strategic adjustments however psychological and cultural work that many leaders could also be unprepared for.
Two challenges: Get your palms soiled, then reimagine all the pieces
Habib closed by throwing down two gauntlets to her government viewers.
"First, a small one: get your hands dirty with agentic AI. Don't delegate. Choose a process that you oversee and automate it. See the difference from managing a complex process to redesigning it for yourself."
The second was extra bold: "Go back to your team and ask, what could we achieve if execution were free? What would work feel like, be like, look like if you're unbound from the friction and process that slows us down today?"
She concluded: "The tools for creation are in your hands. The mandate for leadership is on your shoulders. What will you build?"
For enterprise leaders accustomed to viewing AI as an IT initiative, Habib's message is evident: that strategy isn't working, received't work, and displays a elementary misunderstanding of what AI represents. Whether or not executives embrace her name to personally drive transformation — or proceed delegating to IT departments — might decide which organizations thrive and which develop into cautionary tales.
The statistic she opened with lingers uncomfortably: 42% of Fortune 500 C-suite executives say AI is tearing their firms aside. Habib's analysis suggests they're tearing themselves aside by clinging to organizational fashions designed for an period when execution was scarce. The treatment she prescribes requires leaders to do one thing most discover uncomfortable: cease managing complexity and begin dismantling it.
