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Leaders everywhere are pouring millions into artificial intelligence, convinced it will transform how their companies work. They hire top engineers, launch bold AI projects, and train their teams on the latest tools, believing these investments will make them faster, smarter, and more competitive.

But here’s the hard truth: most of these AI projects stall or fail, not because the technology is flawed, but because the thinking behind them is. The thinking that is missing is called systems thinking.

Systems thinking is the ability to understand how people, processes, data, and technology connect across the business. That is the missing ingredient.

MIT Sloan’s latest research shows that only 10% of companies report meaningful ROI on AI initiatives. Leaders assume they need more technical expertise or bigger tools, but the real failure runs deeper. Without understanding the larger system AI operates in, companies end up automating broken processes, amplifying inefficiencies, and adding speed to chaos.

As an AI business and leadership coach, Fortune 500 advisor, and startup AI strategist, I have seen this mistake play out inside boardrooms and innovation labs alike. What separates successful leaders is not their technical expertise but their ability to guide system-wide change and align AI efforts with the core of the business. This is where the real work begins, as leaders must think beyond tools and talent and lead across the full system their organization runs on.

Speeding Up a Broken System

Leaders often rush to automate without asking whether the underlying process should even exist. AI can speed up tasks, but if those tasks are flawed or outdated, all it does is lock in bad results faster. Systems thinkers challenge the process first, then apply technology wisely.

You can hire the best engineers and data scientists, but if they are disconnected from the organization’s goals, they will deliver solutions that do not matter. Systems thinkers make sure technical teams stay aligned with what the business truly needs, focusing efforts on problems worth solving.

The biggest AI breakthroughs are rarely found inside a single department. They appear where teams connect between sales and operations, product and customer experience, finance and supply chain. Systems thinkers look for these intersections, knowing that cross-functional improvements generate the highest impact.

An AI project that works in isolation can still collapse when pushed across the organization. Scaling requires redesigning workflows, roles, and accountability so that the change holds. Systems thinkers see the bigger picture, preparing the structure that AI will need to succeed at scale.

AI systems left unchecked will drift off course. Over time, they can become irrelevant, inefficient, or even harmful. Systems thinkers build feedback and alignment into every phase, making sure the technology adapts as the business and market shift around it.

AI success does not come from tools or talent alone. It comes from leaders who understand how to reshape systems, align people, and guide change with discipline. Without systems thinking, AI remains just another failed experiment. With it, AI becomes the engine for lasting transformation.

Ask yourself: What part of your system needs rethinking before you apply AI?

AI Leadership Edge Tip: The smartest leaders use AI to reimagine the system, not just improve the parts within the system.

After decades of coaching powerful executives around the world, Lolly Daskal has observed that leaders rise to their positions relying on a specific set of values and traits. But in time, every executive reaches a point when their performance suffers and failure persists. Very few understand why or how to prevent it.

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