After two episodes on what goes wrong in execution and deployment, this episode zooms out to the questions that keep boardrooms busy: What return can we realistically expect? How do we organize for this? And what does a credible AI strategy actually look like?
In this second and final episode of the Management Illusions series, Kenza and Pascal cover the remaining three illusion domains — and the findings are the ones most executives will recognize from their own boardrooms.
Illusion Domain 3 covers the ROI stage. The downsizing illusion — the most prevalent and most damaging of all ten illusions according to the expert survey — is the belief that AI agents will enable significant workforce reductions. Ford, Klarna, and Salesforce all had to rehire thousands of workers whose AI replacements showed unreliable performance. Up to 30% of workers laid off due to AI may need to be rehired within three years. The productivity illusion reflects the well-known productivity paradox: measured productivity improvements from agentic AI trail perceived and expected improvements. Accelerating one process creates little firm-level value if downstream processes become bottlenecks.
Illusion Domain 4 concerns how firms organize for AI. The bottom-up illusion is the belief that AI champions or ambassadors at the mid-level can drive the transformation. No firm has succeeded with this model alone: champions lack time, technical authority, and formal power to change how work is organized. The agent=employee illusion is the urge to anthropomorphize AI agents — giving them human names, placing them on org charts — which early evidence suggests may undermine managerial oversight and accountability.
Illusion Domain 5 addresses strategy. The master plan illusion is the belief that firms need a firm-wide agentic AI vision and roadmap. Agentic AI is an instrument for executing a business strategy — not a strategy in itself. The preparation illusion comes in two opposite failure modes: starting without sufficient foundations, or waiting indefinitely for perfect conditions that never arrive.
Key Takeaways