Management Skills for Modern Managers

Combining AI-focused leadership training and real-life project work can help modern managers learn new skills faster, writes Jenny Fernandez.

With baby boomers set to retire within the next five years, preparing the next generation of managers has become a top priority for leaders, as highlighted by the Development Dimensions International (DDI) studies. Beyond ensuring a smooth transfer of knowledge, business leaders must also navigate the rapid disruptions brought by the ongoing AI transformation. 

As the Fourth Industrial Revolution unfolds, the World Economic Forum estimates that 44% of workers’ core skills will need to be updated by 2027, emphasizing the urgent need for new competencies to keep pace with technological advancements and Gen AI. However, technical expertise alone is insufficient. The essential skills for modern managers are human-centric, including collaboration, critical thinking, iterative learning and sound judgment. Managers must cultivate these capabilities to lead teams, manage change and drive organizational success effectively. In an AI-powered era, success hinges on empowering leaders and their teams with the right skills and mindsets to adapt and thrive.

Why this matters

The rise of AI is fundamentally reshaping how work gets done, challenging traditional definitions of productivity. Many managers struggle to integrate AI into their workflows, often perceiving it as a competitor rather than a co-pilot that enhances human capabilities. This resistance can lead to inefficiencies, missed opportunities and a lack of adaptability in an increasingly AI-driven workplace.

Organizations frequently underestimate the investment required to equip managers with the skills and mindset needed to harness AI’s full potential. To stay competitive, managers must shift their perspective. AI is not a replacement for human talent but an augmentation tool that, when strategically applied, can enhance productivity, drive creativity and elevate leadership.

To navigate this evolving landscape, modern managers must develop four essential skills for effective leadership in the age of AI.

1. Collaborative leadership

Effective leadership today requires a shift from directive to collaborative leadership. This is a model that prioritizes transparency, co-creation and engagement. Dan Diasio, EY Global Artificial Intelligence Consulting Leader, highlights the urgency of this transition, “Generative AI has evolved to become 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.”

To achieve a successful transformation, leaders must implement the following strategies:

• Encourage co-creation by involving teams in decision-making and fostering psychological safety. When employees actively participate in the planning process, they can voice concerns, identify challenges and establish necessary guardrails for effective AI adoption.
• Facilitate meaningful conversations and cultivate curiosity. Leveraging techniques like Hal Gregerson’s Art of Asking Questions enables managers to challenge assumptions, promote diverse perspectives and align teams on shared goals.
• Reframe problem-solving by prompting both teams and AI tools to generate solutions collaboratively. This mindset shift helps teams view AI not as a replacement but as a cognitive amplifier enhancing thinking, productivity and decision-making to drive better outcomes.

For example, Carlos, one of my coaching clients and Chief People Officer at a tech startup, successfully integrated AI into his team’s workflow after participating in team coaching. The coaching sessions fostered open collaboration, problem-solving discussions and alignment on a strategic road map, which included leveraging AI as a leadership enabler.

By using AI as an “HR in a pocket” tool, Carlos and his team enhanced their ability to provide real-time feedback in a multigenerational workplace. Their approach combined technical training with broader leadership competencies like resilience and adaptability, reinforcing mentorship, personalized guidance and continuous feedback loops.

In essence, collaborative leadership is essential for managing AI-driven change. By fostering transparency, embracing co-creation and leveraging AI as a tool for strategic problem-solving, managers can empower their teams, drive engagement and enhance overall organizational effectiveness.

2. Critical thinking and judgment

In an era of rapid technological change, managers must be able to navigate uncertainty and make high-stakes decisions with confidence. This requires the ability to assess information critically, manage risks and align stakeholders while leveraging both data-driven insights and human judgment. A powerful approach for this is Rita McGrath’s Assumptions-Based Thinking, which helps leaders test strategic hypotheses, simulate various scenarios and gain actionable insights from AI-driven analyses. When applied effectively, this framework enables managers to anticipate challenges, identify opportunities and refine their strategies with greater precision.

However, while AI can enhance decision-making, it is not infallible. Managers must scrutinize AI-generated outputs for potential inaccuracies or biases, ensuring that conclusions align with ethical standards and business objectives. Rather than relying solely on AI recommendations, effective leaders apply human judgment to interpret insights within the broader context of their organization’s goals. By combining structured thinking frameworks with AI-driven intelligence, managers can make informed, ethical and forward-thinking decisions that drive long-term business success.

3. Iterative learning and adaptability

Millennial and Gen Z managers are navigating their first major tech-driven transformation, having previously experienced digital shifts as students or young professionals. Now, they are encountering job displacement and evolving skill demands due to the rapid adoption of AI technologies, often leading to uncertainty and resistance to change. To thrive in this environment, organizations must actively prepare managers and rising leaders to embrace continuous learning and adaptability.

Jon Garcia, founder and president of McKinsey RTS, notes that “70% of transformations fail,” often because leaders struggle to provide employees with a compelling reason to change. Successful transformation requires more than just technical training — it demands a structured change management approach where employees can gain knowledge, apply learning in real-world contexts and receive iterative feedback. By fostering a “test-and-learn” mindset, organizations can help leaders treat change as an ongoing process, refining strategies through Agile Development Cycles and small-scale pilot initiatives. Integrating with real-life project work and hands-on learning ensures that new skills are acquired and embedded into daily workflows, building momentum for larger breakthroughs.

4. Feedback mastery

In my Harvard Business Review article, “How to Talk to an Employee Who Isn’t Meeting Expectations,” I emphasized that feedback should be a two-way dialogue where both parties feel heard and understood. Effective feedback is not just about correcting performance; it is about fostering growth, strengthening trust and enabling teams to improve continuously.

The shift from annual performance reviews to continuous feedback loops has been instrumental in enhancing team agility, reducing misunderstandings and cultivating a high-performance, high-trust culture. By integrating structured feedback mechanisms into daily workflows, managers can create an environment where employees feel supported in their development rather than evaluated solely during scheduled reviews.

Additionally, frameworks like Jobs-to-Be-Done can help managers delegate routine tasks to AI, allowing human talent to focus on more strategic, high-value work. Continuous feedback enables teams to adapt quickly, fostering a culture of iteration, innovation and sustained growth in an ever-evolving workplace.

Building future-ready leadership development

Organizations must invest in leadership development programs that integrate AI and emerging technologies to stay competitive in an AI-driven workplace. While standardized training programs provide a foundational understanding, true leadership growth comes from combining structured learning with real-world application. Leaders need opportunities to apply new skills in practical, high-impact scenarios, reinforcing their ability to navigate change and drive results.

By embedding AI-focused leadership training into real-life project work, organizations can ensure that managers move beyond theoretical learning to actively apply AI to enhance decision-making, foster innovation and improve operational efficiency. This hands-on approach empowers leaders to experiment, refine strategies and develop the adaptability needed for long-term success.

The future of management belongs to those who embrace both technological advancements and human-centric leadership. Organizations that prioritize these evolving leadership skills will be well-positioned not just to adapt but also to thrive in the AI era.

Written by:  Jenny Fernandez is an executive and team coach, workshop facilitator, and faculty member at Columbia University and New York University, for SmartBrief.