Image: B. Macfarlane @Fashion Institute of Technology, New York, December, 2025
Connecting Dots is the monthly newsletter for innovation leaders by Brett Macfarlane.
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Executive Insights: Innovation Adoption - "New Direction"
Often, we ask how we can apply a new technology like AI to improve how someone with expertise works. What if you flip that around and ask how that person’s expertise improves how the technology works?
The reason for this flip is that the benefits of technology accrue to those who adapt how they work when they adopt new technologies to accomplish their organization or department’s primary task.
If we look at the hot technology of our time, the evidence loudly informs us that AI adoption without organizational adaptation fails to realize benefits. Last year, BCG reported that 74% of companies struggled to generate value of any sort from AI adoption. In July, MIT reported that 95% of organizations are generating zero P&L return despite $30-40 billion of enterprise investment.
Further, the American Psychological Association reports that around 60% of American workers are at risk of burnout, and is roughly 40% higher for intensive users of AI tools.
For a number of years now, businesses have quietly reported frustration at low returns on AI adoption, or their inability to move from experimental pilot to scalable project. While a tiny minority do materially improve their business, they are in the quiet minority.
That might be a transition, such as when automation and robotics are adopted, where benefits eventually emerge. Or, more likely, may be that AI adoption broadly fails to show material benefits as we’ve seen over the past five decades of digitalization. If that last statement surprises you, check out Solow’s Paradox.
New Direction: Innovation Adoption Through Leadership Development
Organizations that effectively and impactfully adopt technologies like AI do so with a human-centric approach. This is not only about front-line users or customers, but more importantly, it is about your employees, management and executive functions. Each requires new capabilities, new ways of behaving, and new ways of organizing to generate beneficial outcomes.
The unbounded nature of any new technology, especially AI platforms—whether general or industry‑specific—means that how it is customized to the tasks, culture, and ways of working of an organization determines whether it is impactful. This is further complicated by the variety in platforms, whether classical or generative, and the specific models deployed.
A challenge with AI adoption is that its characteristics (unbounded, blackbox, dematerialized and invisible) mean leaders need more sophisticated leadership practices. Technical knowledge and know-how are necessary, but they are not sufficient. Only when leaders add clinical, behavioural and systemic methods to transition to new ways of working and to deploy enabling technology do the gains tend to be realized.
The good news is that there are industries and organizations that have realized gains from AI adoption. The bad news is that the learning about how they achieved these gains—through new ways of thinking, organizing, and behaving—is not widely distributed. Why would it be? It is their organizational capital, silently underpinning financial performance.
A key success factor I’ve observed repeatedly is that integrating leadership development with technology adoption programs greatly outperforms those that just do technical maturity training, buy-in consulting to do it for you or do generic leadership development in isolation.
To better generate value from AI (or any significant innovation or technology development), take a leadership development-first approach and tailor it to your organization:
Behavioural Strategies
Expect the adoption challenge to be behavioural as well as technical. Learn how to diagnose and address the conscious and subconscious behavioural dynamics that will determine whether you are successful.
Inner Clarity
Build inner clarity around your innovation motivations and behaviours. By understanding your own responses to AI adoption and innovation, you can better recognize and address regressive responses in others.
Systemic Methods
Add a systemic approach to initiating, guiding, and landing adoption. Learn science‑informed leadership, change, and transition methods to coherently inspire, guide, and empower executives, management, and staff in parallel.
Cross-Culture Communications
Assume high levels of confusion until more sophisticated cross‑cultural communication capabilities are clearly observable. Evidence‑based global communication knowledge, tools, and practices are essential to enable and empower the hyper-collaboration required even for small incremental improvements.
Emotional Gearing
Actively work with and contain strong emotional responses. Emotional gearing empowers executives and leaders to tactically create or contain the emotional currents that are essential to landing change and innovation. Rather than repress and ignore, surface and orchestrate this valuable emotional energy.
As an executive, each of the five capabilities above builds on your existing leadership toolbox. Even if you have successfully adopted new technology in the past, it's different each time in the present. Every time, the people and technologies behave uniquely in your specific situation in the here and now.
Assume this time is different, because it is. Therefore, develop your new leadership capabilities through innovation adoption. Thus, your expertise will enable the adopted technology to live up to its promises and fulfill your ambition.
You are invited to share questions, reflections and feedback to info@brettmacfarlane.com
