Generative AI is transforming work at unprecedented speed, and successful adoption is fundamentally about people. This report, based on 48 interviews with senior leaders across 20 organisations, reveals that 52% of executives report GenAI is top of mind for their CEO. Yet, most organisations are focusing o the wrong priorities.

Success requires a holistic approach across four interconnected areas:

Capability: Organisations must develop technical skills (prompt engineering, model fine-tuning), application skills (critical thinking for AI outputs, identifying use cases), and crucially, human characteristics. Yet only 16% of organisations currently prioritise human skills. This is a significant risk given that GenAI is limited by training data while humans bring creativity, community, and the ability to create something new.

Ethics: Trust is the cornerstone of ethical GenAI adoption. Organisations must address three critical concerns: disinformation and AI hallucinations that put reputations at risk, bias in training data affecting decisions, and security of confidential information. Building trust requires transparency in how AI is used, continuous monitoring for fairness, and clear communication about data collection and usage.

Culture: GenAI transformation demands intentional culture change alongside technology implementation. Organisations risk getting stuck in cycles where people interact with GenAI but the culture remains unchanged, limiting long-term adoption and benefits. Success requires creating safe space for experimentation, enabling knowledge sharing among GenAI champions, and developing strong ethical policies that give people confidence to use these tools.

Leadership: Good leadership remains essential. The focus must stay on value creation, not AI adoption for its own sake. Leaders must set strategic vision, navigate ambiguity, deal with rapid change, take a human-centred approach, and connect technical knowledge to commercial opportunities.

The speed of GenAI evolution can feel predetermined, but organisations and leaders have genuine choice in shaping outcomes by focusing on culture, capabilities, ethics, and leadership behaviours they build. The report provides HSM Advisory’s GenAI readiness model to help organisations assess their current state and build strategic AI impact capabilities.