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The Future of Leadership Development: AI-Driven Manager Enablement
In 1981, Jack Welch took over a company that Fortune 500 CEOs had just voted the most admired in America. Within four years, he had cut 112,000 jobs from it, earning the nickname "Neutron Jack" in the process, after the bomb that destroys people while leaving the buildings standing.
The cuts spread as a model.
Downsizing moved across industries as a legitimate management philosophy through the late 1980s and into the early 1990s recession, a sign that a CEO was serious, unsentimental, focused on shareholder value. Industry Week called Welch "the most acclaimed SOB of the decade," and it wasn't an insult.
Then the 1990s boom arrived. Unemployment dropped toward 4% and organizations that had spent a decade treating workers as a cost line suddenly couldn't find any. The scramble that followed produced what we see as the modern HR departments, with learning budgets, employee value propositions and the phrase that became the era's shorthand: "People are our greatest asset."
It was a labor market problem dressed up as a values statement. Forty years later, the conditions that produced it are showing up in similar ways.
Table of Contents
- More Output, Less Investment
- 181 CEOs Signed a Pledge. Nothing Changed.
- The Pressure Is Building
- What the People-First Rebound Actually Looks Like
- The Wait Is Real
More Output, Less Investment
The current version of this story doesn't have a Neutron Jack, no single villain or dramatic announcement.
What happened was a slow reorientation of where organizations believed value came from. In reviewing S&P 500 10-Ks from 2021 to 2025 for a recent research project, I found that one in five companies had moved their language away from human capital and toward AI, a deliberate rewrite of what the business was investing in.
The actions followed.
Average hours of employee learning dropped from 47 to 40 in a single year. Large companies cut average training budgets from $13.3 million to $11.7 million, while total industry training spend went up, meaning the money shifted away from the person doing the work rather than disappearing from the system.
More than half the global workforce reported receiving no recent AI training even as rollouts kept coming. One in four tech professionals globally said they quit a job specifically because their employer didn't provide structured upskilling.
Workers absorbed the anxiety of displacement, taught themselves tools on company time and produced more output than ever. Mercer's Global Talent Trends 2026 found that only 44% of employees say they are thriving at work, down from 66% two years ago and lower than at any point during COVID. Forrester projects that 28% of the workforce will be withholding discretionary effort, going through the motions without actually investing in the work. No AI implementation closes that gap.
None of this was invisible to organizational leadership. The question was whether anyone with the power to change it felt enough pressure to do so.
181 CEOs Signed a Pledge. Nothing Changed.
The last time organizations tried to reverse course through intention alone, it was 2019.
The Business Roundtable gathered 181 CEOs to sign a revised statement of corporate purpose, committing to lead for the benefit of all stakeholders, employees included. It was the most prominent voluntary commitment to worker investment in a generation.
Jeff Bezos signed it. Tim Cook signed it too. So did Jamie Dimon.
Two years later, Harvard Law's analysis found that essentially none of them had changed their governance documents, executive pay structures or corporate purpose language in any material way. Bezos was cited as the first to break the pledge, within months of signing it.
The 1990s version of this didn't work that way. We didn’t get people as our greatest asset as a values exercise. Organizations ran out of workers and had to compete for them, and the language followed from that.
Structural pressure produced the behavior, and the values statements came after. This time organizations have more to lose by waiting.
The Pressure Is Building
It might surprise you that employer trust is currently at a historic high. The 2026 Edelman Trust Barometer found that 78% of employees trust their employer, 25 points ahead of government and higher than any other institution on earth.
That number exists because decades of employment relationships gave workers something they could count on. It is the accumulated credit of a long run of organizations that, whatever their flaws, showed up for their people in ways that mattered. The organizations spending that credit down right now are drawing on a balance they didn't add to and may not notice is gone until they need it.
The structure of our workforce is more of a threat than people realize as well. Korn Ferry projects an 85.2 million worker global shortage by 2030, a problem of skills as much as headcount. In healthcare alone, more than a quarter of nurses are projected to leave or retire by 2027, in a sector already stretched thin before AI entered the conversation.
MIT Sloan argued last year that AI won't provide sustainable competitive advantage because everyone has access to the same tools. When a technology is universal, it raises the floor for everyone without separating anyone. What separates organizations is what they do with the people using those tools.
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The people using those tools in a skillful way are still in short supply. That’s a structural challenge that won’t be fixed by focusing solely on shareholder value or overinvesting in AI tech.
What the People-First Rebound Actually Looks Like
The comeback won't be announced. It will show up first in retention budgets, in recruiting costs that keep climbing or in exit interviews that keep saying the same things. Organizations will start competing for workers again after years of not having to, and the workers they most need will turn out to have gone somewhere that invested in them.
When that happens, the people-as-an-asset language returns to the 10k filings. Then HR functions get reinvested. Training budgets come back. Employee value propositions get competitive again. Companies that cut entry-level pipelines start rebuilding them when they realize they have no one to promote.
The organizations that held on to people through the lean years find themselves with an institutional knowledge advantage they didn't fully appreciate until the labor market tightened and everyone else started from scratch.
The organizations that get ahead of it look like Costco.
In an industry notorious for burning through workers, with annual turnover regularly running above 60%, Costco signed a three-year contract in early 2025, setting a $20 minimum wage and bringing average wages to $31.90, with guaranteed increases through 2027. The CEO framed it as competitive strategy, the kind that shows up in recruiting costs avoided, institutional knowledge retained and customer relationships that don't reset every few months.
Costco has been investing in employees for years, too. The result is a retention rate around 93% for employees with at least a year at the company. Every year that holds, the gap between Costco and a competitor running on 60% annual turnover gets harder to close.
The Wait Is Real
Welch spent the 1980s as the most acclaimed SOB in corporate America and ended his career as Fortune's manager of the century.
The management press that celebrated downsizing in the 1980s was running cover stories on employee investment by the mid-1990s, because the math had shifted. The organizations paying attention to that cycle right now have a window the stragglers didn't.
Employees living through the current moment aren't wrong about where things stand. The comeback isn't around the corner. But this cycle always repeats, and the organizations that treated the last one as a permanent state of affairs learned something expensive about what happens when the labor market moves. And it always moves.
Editor's Note: Read more about the current state of employee experience and employee engagement:
- The New Playbook of Employee Experience — Organizations that treat engagement as an outcome of good design, not a program to fix, will build meaningful employee connections.
- The Failure of the Employee Engagement Industrial Complex — Despite billions spent on tools, perks and programs, global employee engagement has barely improved in 15 years. This is an opportunity for leaders.
- Work Design Is How Performance, Engagement and Well-Being Scale — When leaders organize work around how people actually collaborate, they'll drive performance and help workers finish their days with energy, not exhaustion.