"It's Only March"
2025's Leadership Challenges Are Just Getting Started
Note to readers: Check out “Three Charts You Don’t Want to Miss” below the main article. Keep the feedback coming!
Insights from Transform: Gen AI & RTO Take a Back Seat to Chaos
The biggest concern on the minds of CHROs and People leaders in 2025 isn't generative AI or the wrestling matches over return-to-office – it's the looming economic and cultural chaos that's already messing with everyone's strategic plans.
I spent three days at Transform immersed with senior leaders who talked on stage about AI, talent, and wellness while privately adding a bigger topic: how they (and their teams) are coping in 2025. In those private dinners and hallway huddles, the real conversations had more focus on WTF than ROI. I heard "and it's only March!" a bit too often.
GenAI: From Efficiency to Outcomes
The AI conversation is shifting from "let's make everyone efficient!" to "let's redesign specific processes." Smart companies are pivoting from efficiency-talk (which too many employees hear as "layoffs") to outcomes-focused implementation.
What's clear is we're facing workforce displacement ranging somewhere between "mild disruption" and "the robots are here to replace me." When asked on stage about the scale and timing, I went with "I don't know" – which got appreciative nods. Regardless of how extreme, it is clear that this will be a foundational shift for many.
The fork in the road is becoming obvious: companies can either invest in their existing workforce with new skills and adaptation time, or go "rip and replace" with new talent. The first approach keeps institutional knowledge and signals loyalty; that drives engagement and productivity. The second might accelerate transformation (if you can hire enough of the 9% who use the tools regularly) but tells your people that they’re just a cog in your machine.
Related: The Emotional Work of Gen AI Adoption
RTO: No Thanks, We Have Real Problems
Return-to-office barely registered on the crisis meter. I get asked about it a lot given the work I’ve done in the area, but most companies have moved beyond arguing over policy to focus on actual problems.
There are still some CEOs arm-wrestling their teams over attendance – typically the ones who allowed three days in office but are now fuming that they're only getting two. (News flash: when the standard was five days pre-pandemic, most companies averaged three. This still surprises most people who haven’t been in commercial real estate.) If that’s your CEO, read this and reach out for help!
The leaders in flexible work are already working on next-level questions: How do we redesign workplaces for actual human engagement rather than surveillance cosplay? How do we make collaboration effective and purposeful, while increasing focus time for deep work? And, maybe most importantly, How do we develop leaders for a distributed and AI-first world of work?
I’ve started a set of working groups for senior leaders in these firms (a Future of Work Coalition) focused on those issues; I’ll be sharing high-level findings from those groups over the coming weeks and months.
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Chaos: The Only Thing We Can Count On
Talk of recession has moved from "if" to "when," with "stagflation" making a comeback tour – I don’t personally want the 70s back, thanks. Consumer sentiment is dropping fast, and businesses that were planning expansions in January are hitting pause buttons in March. You can see it already in airlines, US tourism and now media companies too.
The downstream effects are brutal. CHROs are whispering about potential layoffs, while tallying how many of their leaders even have management experience dating back to the 2008 crash. I started my career in the 1989 financial crisis, not that I’m bragging. The whipsaw from January’s business confidence high to March’s doom and gloom is head-spinning – and adds to the feeling that there are no controls.
Meanwhile, DEI has become a political football being kicked around by Washington with global employers feeling very squeezed. I’m grateful to those espousing diversity and meritocracy in the same breath since the two are not in opposition. Getting rid of acronyms is also a good idea; words carry meaning. Either is far better than swinging from performative DEI to performative anti-DEI (looking at you, Meta).
Global companies are especially trapped. Dismantling DEI initiatives to appease one political context impacts your global workforce. Try explaining to your leadership outside the US why you're abandoning diversity when in some countries, like the UK, the pendulum is swinging the opposite direction. Read Jena McGregor’s Charter column for some solid advice.
Survival Strategy: Resilience and Building Real Trust
Leading through this chaos cocktail – one part AI anxiety, one part economic uncertainty, and a splash of culture war and dash of RTO – requires resilience that most leadership teams haven't developed.
Leaders need to build up both their own and their organization's resilience. Our ability to be positive realists – acknowledging issues while painting a way forward and engaging teams in finding solutions – is essential for healthy, productive organizations. And let's be honest: we also have to take care of ourselves. One non-profit board I’m on started their meeting with "what are you doing now to make sure you replenish your energy?" Smart question for tough times.
The trust problem is real. That Edelman study showing declining trust in business keeps coming up in conversations, and nothing about our current challenges is going to magically improve those numbers. Being transparent with your teams, acknowledging the elephants in the room, and inviting people into the conversation about navigating 2025 together isn't just good leadership: it's survival.
One of the most compelling conversations I had centered on trust within the C-suite itself: How strong is your "first team" when shit really hits the fan? In too many organizations, the internal competition between functions and business units is more brutal than external market pressures. That’s exactly the wrong foundation when facing economic whiplash.
One CPO described convincing her skeptical CEO to invest in executive team building last year. "He thought it was HR fluff until he realized half his team didn't understand each other's basic motivations." They now run similar programs every six months, not because they've joined a corporate drum circle, but because they need actual human connection to make hard decisions together – and to know they can depend on each other.
As Benjamin Franklin supposedly said at the signing of the Declaration of Independence, "We must all hang together, or assuredly we shall all hang separately." In 2025's chaos, that's less historical reference and more daily management strategy.
What chaos are you seeing impacting your organization? Drop me a line – I'm collecting war stories for the inevitable "How We Survived 2025" retrospective we'll all need next year.
Three Charts of the Week
1. The GenAI Executive/Employee Disconnect
The chasm between exec’s AI ambitions and employee reality is widening, not shrinking. New research from Writer reveals a workplace divided by perception:
89% of execs claim their company has an AI strategy; only 57% of employees see it
64% of execs believe their company has high AI literacy; only 33% of employees agree
2/3rds of execs say that generative AI adoption has led to tension and division
59% of execs are "actively job hunting for more AI-innovative companies" vs 35% of employees
This aligns with broader trends: Pew Research shows 52% of American workers worry about AI's workplace impact, with 33% feeling overwhelmed. Meanwhile, Slack research identifies three employee camps: 30% "maximalists" embracing AI, 20% "secret cyborgs" quietly using it, and 50% sitting on the sidelines entirely.
For leaders who truly believe AI will augment rather than replace workers, actions matter more than words. Focusing on broader business goals and growth makes a difference. As Writer CEO May Habib notes, "leaders need to show employees that they're using AI to grow the company's output and that there's no way to do that without keeping the company's current workers."
But employees share responsibility too. With GenAI clearly reshaping work, the options are becoming clearer: invest in learning, find employers who will help you learn, or risk being left behind. The sidelines are getting increasingly uncomfortable.
2. The RTO Mandate Myth: Only 12% of CEOs Plan to Get Stricter
Despite what you might have read in breathless headlines about the death of remote work, new Stanford / Federal Reserve research reveals most CEOs are staying the flexible course:
Just 12% of execs with existing hybrid/remote policies plan stricter RTO mandates in 2025
Even in a recession scenario with 8% unemployment, that number only increases a bit to 14% would reduce remote work (and 2% would actually increase it)
The real story isn't about dramatic policy shifts – it's about quiet stability. Many companies have found that their current approach works well enough, teams are already distributed, and creating internal turmoil over desk time is a waste of organizational energy.
Perhaps most telling: 44% of employees say they simply wouldn't comply with a five-day mandate. In parallel, companies like Verizon are actively poaching AT&T talent by highlighting their flexibility advantage.
The math is straightforward, if unsexy. Even in a cooling job market, companies competing for specialized talent recognize flexibility as a competitive advantage – not a pandemic-era perk to roll back.
3. The Diversity Support Reality Gap: Perception vs. Truth
The gap between what Americans actually believe about diversity and what they think others believe is startling. New research from University of Wisconsin reveals:
Reality: 82% of Americans support pro-diversity efforts across five separate polls
Perception: People estimate only 55% of their fellow Americans hold these views
Gap: A massive 27-point difference between reality and perception
When researchers asked about statements like "Racial diversity benefits the country" and supporting minority scholarships with taxes, the overwhelming majority said yes. Yet most Americans believe that support has a far slimmer majority.
This perception gap mirrors what we see with remote work: media narratives amplify dramatic shifts and vocal opposition while ignoring the steady, supportive majority. The loudest voices – not the most common ones – drive our collective understanding.
As Jessica Stillman notes in Inc. Magazine, “Business leaders need to decide which way they want to drive this cycle. Because whether they go quiet or speak up about diversity and inclusion, they’re accelerating change one way or the other.”
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