Return on Investment (ROI) through Human-Centered Leadership in the Age of AI and Automation: A Global Review

Put yourself in the shoes of a factory worker in the mid-19th century or maybe a bank clerk who suffered through the early years of the 20th century. Historically and now, leadership is all about hierarchy, authority, and control. A good leader keeps costs in check and remains always productive while maintaining discipline. The idea of leadership was a command, and empathy was a nicety, not essential. Fast forward over the years, and today, the world of work has changed, and that change has released new needs on what is required from leadership to evolve.

Our business world is no longer a manufacturing economy; it is not even the information age of the late 1900s. We are now on the brink of an age of automation, AI and global interconnection like never before. The change has been so dramatic that it is changing the game in our work and leadership. With machines rapidly mastering many of the cognitive tasks which were long considered work for humans, what would leaders do in such a new world? Moreover, perhaps most fundamentally, how should they lead in the age of intelligent machines?

I have spent my career wrestling with these questions. From a banker to a management consultant, managing director, COO to Founder of HumLeads.org, I have seen industries change, and leadership styles evolve amidst a transformation in the very nature of humanity in this radically shifting world. What I now understand is somewhat paradoxical but straightforward – in an increasingly automated world where AI and machines are taking over routine jobs, human-centricity in leadership has become integral to success. This human touch — defined by empathy of all types (cognitive, emotional, and compassionate), emotional intelligence, relatability, curiosity and focus on human values first- makes the return on investment so tangible for all kinds of organisations.

Human-Centered Leadership in a Changing World

Think of the bigger picture here: For the past two centuries, humankind has been moved from land to factories and from those factories into office spaces. We are in the process of the second displacement—people from basic cognitive tasks to creative, inventive, and emotionally complex human roles. Machines will do the repetitive work, and people will only do the remaining human part of understanding people and igniting some humans into action. This is a moment when human-centred leadership stops being ethical and becomes an economic necessity.

Evidence abounds across the globe. One country where this is not a fad but an imperative is Japan, where the rapidly ageing population is causing labour shortages, and human-centred leadership has been practised. Companies such as Toyota embrace respect for people as an essential value and understand that productivity and innovation come from treating workers equally, based on dignity and empathy (Fujimoto, 2020). In the United States, too, companies have realised that emotionally intelligent and empathetic leaders can boost engagement and productivity. Organisations with emotionally intelligent leaders are 50% more likely to find productivity improvements (Deloitte, 2022).

Human-centred leadership is a critical principle in developing markets like India and Brazil. As they emerge into the technology sector, these countries discover that empathetic and understanding leadership is more conducive to fostering the creativity and disruptiveness required to survive in the global market. Moreover, that change is not just cultural but economic. The 2022 report by Accenture reveals that companies with empathetic leaders are nearly 21% more likely to produce innovative ideas than those managed through a more traditional top-down framework (Accenture, 2022).

From my own experience managing international teams and working with global organisations, I have learned that empathising is universal. Whether I was leading teams in Europe, Asia, or the Americas, I soon realised that employees do not respond to authority but empathy. Leaders who go a step further to learn about the struggles of their own people work to create environments where everyone feels like they matter. When people feel appreciated, they work harder, stay longer with the company, and think outside of convention.

Empathy and Productivity

How can we possibly become more productive in an era where algorithms rule everything when machines have already done so much of the work? Humans will never be the answer, but creating places where humans can thrive is. Empathy and emotional intelligence are two areas many believe contribute to work productivity, and studies back that assertion for human-centred leadership.

According to the above research, McKinsey found that even empathy increases your productivity by up to 21%! This is not without a good reason - once again, yes, employees should feel better, but also because empathy makes for the feeling of safety, and this coin is called psychological safety, as there are many examples McKinsey (2021) points out WHY. For example, people are more likely to take the risks necessary for innovation when they feel understood and supported. I have had the privilege of working with great multicultural teams during those complex transformations at SAP. The highest-performing teams were not necessarily the ones with the most technical skills; it was where leaders created a level of trust and safety for everyone to bring their true selves.

This pattern can be seen globally: the more jobs move away from routine, repetitive tasks and into cognitive functions, the more leadership through command and control is threatened. Instead, leaders need to make it psychologically safe for their workforce to experiment and take risks by developing emotional intelligence. Research from the London School of Economics supports this, illustrating that psychological safety is THE most important factor in driving innovation (Edmondson, 2019). Human-centred leadership is delivering across industries and continents, and those organisations that understand this are winning as never before.

The Law of Attrition: The True Cost for the Humans Behind It—and Why Retention Matters and Yields a High ROI.

Let us zoom out for a moment. Employee retention is a challenge that many companies face around the world. Organisations in the US, China and Europe are all finding it hard to retain top talent. The cost is staggering. According to a Gallup study, employee turnover costs an estimated $1 trillion annually (C. Harter et al., 2020). Nevertheless, is the answer really that simple: a little empathy for one another to solve this colossal worldwide epidemic?

According to the 2022 report, companies with empathetic leadership receive 50% less attrition. The fact above is supported by research from Korn Ferry, which highlights that emotionally intelligent leaders who exemplify empathy retain top talent up to 50% more than those who do not (Goleman, 2017). Retention is not just about keeping butts in seats; it is creating an environment where people want to stay, where they feel inspired and capable of growing personally along with professionally.

I have personally lived and led empathy-based retention strategies. I did not know how to keep our best people in my early days. Employees came and left so often that it severely disrupted team cohesiveness and innovation while the product got dragged down with them. However, my results started picking up the moment I switched gears — focusing on leading with compassion, showing more empathy with employees and giving them flexibility in their work arrangements. People spent longer, got more involved and thought of more interesting ideas. These facts are backed up by research, too. Gallup found that managers who provide regular and empathetic feedback decrease attrition by 14% (Harter et al., 2020).

Across the globe, there is a universal need for human-centred leaders in every market. The balance sheet of employee time remains the same whether in India (or any other high-growth economy) or Germany: retention is a stone-cold ROI—it costs billions to learn how not to lose experienced people.

Innovation Being the Center of Attraction all over the Globe

However, as we edge closer to the AI-fueled era, the expectation of disruption is higher than ever. In many ways, innovation is not so much about new technologies as it is about creative thinking and quick adaptation. That is where empathy comes in, argues Harvard Business Review. Research has found that such leaders develop in their teams the ability to create ideas (Boyatzis & Smith, 2019; Boyatzis & McKee.createParallelGroup).

Globally, this direction is apparent. Silicon Valley companies, Bangalore start-ups, and Shenzhen venture groups alike are learning that the power to innovate starts with risk-taking flexibility, not being the smartest. Accenture also found backings to this in their research, as empathetic leaders are 3.5x more likely to create innovative teams (Accenture, 2021). Therefore, the right kind of innovation is related to establishing an environment in which colleagues can think, test and share their ideas unimpeded.

I have seen this happening in real-time. In my early days at SAP, we introduced several game-changing products that transformed industries. The teams that developed these innovations were not only able to technically execute; they were safe. They knew their ideas would have an ear, their failures would not be crucified, and their Tech lead had their back. This, more than any single strategy or technology, was the key to our success.

Global Leadership Paradigm of the Future

However, as we fast-forward into the future, what is evident is that leadership in the age of AI and automation needs to be human-centred. Machines can process data 10,000 times faster than we ever could and make decisions based on that data, but they cannot relate to human beings. They will never lead, inspire, or empathise. That remains our domain.

When the "right side of the screen" (a metaphor for profits in financial equations or financial projections) reflects that companies are confident about their ROI on human-centred leadership—that specifically, they expect to earn far more than those costs by creating a caring environment. In essence, it implies that a leader who invests in the well-being of his employees (empathy, flexibility, mental health support or other such policies) would reap significant financial gains.

The human touch point differentiates you as a brand in a world dominated mainly by automation and AI-driven technologies. Those who can activate this human connection will be successful leaders who, in a technology-obsessed world, differentiate themselves from those who look at tech and ignore people inside the organisation. This serves as a competitive edge that guarantees lasting good fortune in an ever-evolving landscape.

Ultimately, the difference between a leader-led company and a human-centered leadership organisation comes down to what executives consider 'the bottom line. ' Those who get good at this will evolve, while those who stay fixed-minded will not even compete anymore.

With my work on www.humleads.org  and my ongoing research on "Humanified Leadership in the Antroposcene and the age of AI",  I have dedicated myself to making these qualities come alive in contemporary leaders across the globe. The future is uncertain, and the scale of challenges resembles few periods in history — but through investment in human-centred leadership, we can create organisations that are more productive, innovative, resilient, and also a lot more humane.

References

Accenture. (2021). Fostering a Culture of Innovation Through Human-Centered Leadership. Accenture Insights.

Accenture. (2022). Empathy and Retention: The Connection Between Leadership and Workforce Stability. Accenture Research Report.

Boyatzis, R., & Smith, M. (2019). How Leaders Can Foster Creativity by Practicing Empathy. Harvard Business Review.

Deloitte. (2022). The Human-Centered Leader: Unlocking Productivity through Emotional Intelligence. Deloitte Research & Insights.

Edmondson, A. (2019). The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation, and Growth. London School of Economics Press.

Fujimoto, T. (2020). Toyota Production System: Beyond Large-Scale Production. Toyota Institute.

Goleman, D. (2017). Emotional Intelligence: Why It Can Matter More Than IQ. Korn Ferry Research.

Harter, J. K., Schmidt, F. L., & Hayes, T. L. (2020). Wellbeing at Work: How Empathy Improves Engagement and Retention. Gallup Research.

McKinsey. (2021). The Empathy Effect: Driving Performance in a Post-Pandemic World. McKinsey & Company.