Let’s face it, artificial intelligence is probably one of the best management tools to come along since the first commercial computers rolled out decades ago. It can show and predict when customers are ready to buy, it can tighten up supply chains, and help prioritize the work of teams. The management potential of AI algorithms is unlimited. Still, when it comes to actual leadership, AI falls flat on its face.

“AI will be able to do almost any managerial task in the future. That is because of the way we define management as being focused on the idea of creating stability, order, consistency, predictability, by means of using metrics — e.g., KPI,” says David De Cremer, founder and director of the Centre on AI Technology for Humankind at the National University of Singapore Business School and author of Leadership by Algorithm: Who Leads and Who Follows in the AI Era?

Still, AI is beset by bias and overhyped promises. Most organizations reported some failures among their AI projects, with a quarter of them reporting up to 50% failure rate, a survey by IDC showed. Lack of skilled staff and unrealistic expectations were identified as the top reasons for failure.

Still, there are zones where AI has potential to excel in a big way — such as at repetitive tasks in which it could replace many managerial functions. That’s as far as AI’s potential reaches — inspired, visionary business leadership is still very much a human skill, De Cremer points out in a recent interview published at Knowledge@Wharton. AI algorithms can never replace the qualities of human leadership. The perception that AI may be in charge is understandable — “we are moving into a society where people are being told by algorithms what their taste is, and, without questioning it too much, most people comply easily. Given these circumstances, it does not seem to be a wild fantasy anymore that AI may be able to take a leadership position.”

But the idea that AI will take the lead is actually a fantasy, he points out. AI “will never have ‘a soul’ and it cannot replace human leadership qualities that let people be creative and have different perspectives,” he says. “Leadership is required to guide the development and applications of AI in ways that best serve the needs of humans.”

For starters, because AI is so far-reaching, the actual technology is only part of the equation. “The integration between social sciences, humanity, and artificial intelligence was not getting as much attention as it should,” says De Cremer. “AI is particularly good at repetitive, routine tasks and thinking systematically and consistently. This already implies that the tasks and the jobs that are most likely to be taken over by AI are the hard skills, and not so much the soft skills.”

These soft skills include the ability of business leaders to understand “how, where, and why to use algorithms, automation, to have more efficient decision-making,” he says. “Many business leaders have problems making business cases for why they should use AI. They are struggling to make sense of what AI can bring to their companies.”

This means figuring out how AI will serve a co-working roles in teams. This consists of deciding “where in the loop of the business process do you automate, where is it possible to take humans out of the loop, and where do you definitely keep humans in the loop,” De Cremer. Leaders need to design a work culture “where people feel that they are being supervised by a machine, or being treated like robots. Leaders build cultures, and in doing this they communicate and represent the values and norms the company uses to decide how work needs to be done to create business value.”

AI will never be able to figure out how to build a productive and forward-looking work culture.

(Disclosure: In my role as an independent consultant, I have performed project work over the past year for IDC, mentioned in this post.)