TWO-THIRDS OF BUSINESS LEADERS IN THE UK, FRANCE AND GERMANY ARE NOT READY TO LEAD IN THE AI AGE
– UK leaders (49%) more likely to be AI-skilled, than in France (26%) or Germany (19%) but skills alone are not translating into better business performance
– New research identifies leadership capability as a decisive factor in whether AI investment translates into commercial advantage
– A third of employees in the UK, France and Germany are worried about being replaced by automation and report anxiety, mistrust and exclusion as AI reshapes work
– Data shows organisations prioritise AI-driven growth over equitable and inclusive adoption
– “The findings suggest that while many organisations are investing in AI tools and upskilling initiatives, far fewer leaders have the mindset, skills and behaviours needed to unlock the human commitment required for AI to drive sustained growth,” said Dr Ellie Smith, Director of Research, Europe, Catalyst.
– “The data in this report reveal that in many cases, organisations, facing strong headwinds and market pressures to fulfil the promise of their AI investments, have sidelined the talent development and employee wellbeing that encourages innovation in the first place. But, the good news is that many leaders already possess the leadership traits needed to bridge this disconnect and drive powerful and resilient transformation,” said Emilia Yu, Co-Executive Director of Coqual’s Global Lab.
Nearly two-thirds, 63%, of business leaders across the UK, France and Germany are not ready to lead effectively in an AI-enabled world, according to new research from Catalyst, a global nonprofit accelerating organisational performance and women’s progress, and Coqual, a leading global, nonprofit think tank dedicated to better work futures.
The study, based on responses from 2,891 business leaders and employees in the three countries, alongside in-depth qualitative interviews, finds that as AI adoption accelerates across organisations, leadership capability has emerged as the critical constraint on performance.
Leaders in the UK, 49%, are significantly more likely to describe themselves as AI-skilled than their counterparts in France, 23%, or Germany, 17%. However, the research shows that technical capability alone does not drive results. Business performance improves only when leaders are also able to support, involve and motivate their workforce through change. In other words, how leaders lead matters as much as what technology they adopt.
Introducing the ‘Convergent Leader’
The research identifies a new leadership profile it terms the ‘Convergent Leader’. Convergent Leaders bring together AI skills to make confident, informed decisions about technology, inclusive leadership behaviours that build trust, fairness and psychological safety, and a flexible mindset (see info box) that enables them to lead through uncertainty and change. It is this combination, the research finds, that differentiates organisations seeing strong commercial returns from AI.
More than a third of leaders in the study, 37%, are identified as Convergent Leaders. They are most likely to be based in the UK, 55%, followed by Germany, 25%, and France, 20%.
In practice, Convergent Leaders create environments where people feel safe to speak up, experiment and adapt as AI reshapes work. They prioritise fairness and inclusion, balance human judgement with technology and are more comfortable leading through uncertainty and change. Organisations led by these leaders consistently report stronger business performance than those led by non-convergent leaders.
Convergent leaders deliver stronger business outcomes
Compared with non-convergent leaders, organisations led by convergent leaders report better results:
• A boost in team productivity: 93% vs 34%
• An increase in market share or entry into new markets: 41% vs 17%
• Increased revenue or profit margin: 53% vs 26%
• Greater customer loyalty or satisfaction: 58% vs 22%
• Operational efficiencies and reduced costs: 54% vs 30%
• Reduced employee turnover or improved retention: 27% vs 18%
• Launched innovative new products or services: 45% vs 18%
These findings point to leadership capability as a decisive factor in whether AI investment translates into commercial advantage.
Leaders are not planning for the human impact of AI
Despite rapid adoption of AI, many organisations are failing to plan for or address its human impact.
More than a third of employees, 34%, fear being replaced by automation, with similar levels reported across all three countries. Only about one in three, 35%, say their organisation helps them build AI skills relevant to their role.
Long-term planning also remains weak. Only 28% of leaders, and 29% of employees, say senior leaders in their organisation are planning for the long-term impact of new technologies on employees. For leaders, this falls to 20% in France and 22% in Germany, compared with 38% in the UK.
Most (95%) leaders also cannot quantify the impact of AI because their organisation is not tracking it. Some are struggling to come up with appropriate metrics, whereas others do not see tracking impact as a priority investment. Among those who do track outcomes, innovation is of far greater interest (52% of leaders) than employee engagement (38%) or retention (31%).
Why equity risks remain
While the research did not find significant differences between men and women in current AI access or usage, this should not be read as evidence that gender equity has been achieved. Instead, the findings point to a broader organisational gap: most employers are not yet taking deliberate steps to ensure AI is adopted responsibly and inclusively across their workforce.
Dr Ellie Smith, Director of Research, Europe, Catalyst said: “Right now, organisations are far more focused on using AI to drive growth than on how those tools are governed or adopted equitably. That matters, because when equity is not built into AI adoption from the start, gaps in access, skills and usage do not disappear. They grow over time, across gender and other identity groups.”
While 61% of organisations report having a responsible AI policy, only 21% of leaders say their organisation is adopting AI solutions that minimise the negative impact on employees. Fewer than half say their policy addresses equity, 49%, or inclusion, 48%. Nearly four in five employees (78%) also disagree that leaders at their organisation are making efforts to create a more inclusive culture.
Leadership, not technology, will determine AI’s success
Dr Ellie Smith, Director of Research, Europe, Catalyst, said: “The findings suggest that while many organisations are investing in AI tools and upskilling initiatives, far fewer leaders have the mindset, skills and behaviours needed to unlock the human commitment required for AI to drive sustained growth.
“With nearly two-thirds of leaders still unprepared for AI, this research shows just how urgent the challenge has become. Convergent leaders stand out not just for what they know, but for how they learn and how they respond to uncertainty. What will differentiate successful leaders is the ability to integrate AI into teams and workflows in a way that prioritises fairness, inclusion and trust, and helps employees see technology as an opportunity rather than a threat.”
Emilia Yu, Co-Executive Director of Coqual’s Global Lab, said: “We’re at an inflection point for AI, and leaders and organisations have important choices to make in order to sustain growth through this transformation. The most successful leaders prioritise not only AI skills, but also responsibility, accountability, and the human traits technology cannot replace. Organisations must reprioritize employee wellbeing and address their anxieties if they want to create the right conditions for innovation. Only by empowering the people who are doing the work will leaders unlock the potential of AI to augment human ingenuity.”
