How Shadow AI: The Leadership Blind Spot Costing You Talent
- Sahar Andrade. MB.BCh
- 5 days ago
- 5 min read
First appeared in Forbes Coach Council
Last week, a VP told me her team's reports suddenly got sharper. Clearer analysis. Better writing. She should have been celebrating.
Instead, she felt uneasy.
Half her team was using ChatGPT. Nobody told her. Their intention was never to mislead her. Fear was at full play here: fear that she would consider their actions deceitful or question their competence, jeopardizing their job security. So, they hid it.
This is shadow AI. And it's likely happening in your organization right now.
What Lives In The Shadows
Shadow AI isn't an identity. It's a shade of one. It's your marketing manager using ChatGPT for social posts. Your analyst using AI for data. Your salesperson drafting emails with tools you've never approved.
None of it is malicious. All of it is invisible to you.
Here's what makes this fascinating: Fifty-nine percent of employees are using unapproved AI tools. Of those, 57% say their managers know and are supportive. Even more striking? Ninety-three percent of executives are using unapproved AI themselves. Leadership is modeling the exact behavior they're asking IT to prevent.
But here’s the actual price you pay. When your best people start hiding what they do, they don’t share what they learn and stop celebrating what’s going right.They can't teach others. Innovation happens in silos instead of collaboration. And your talent? They're spending cognitive energy hiding instead of creating.
Your Brain On Uncertainty
Let me tell you what happens in your employee's brain when they sit down with a report due and ChatGPT opens on their screen.
Their amygdala asks: Is this allowed? Will I get in trouble? Will my boss think I'm not capable?
The amygdala is your threat detection system. Uncertainty stemming from the lack of guidelines triggers the same stress response as when we face a menace, as it doesn’t differentiate between a real physical danger or a perceived social danger.
The stress response floods our system with cortisol, resulting in suppressing the prefrontal cortex, where our complex thinking takes place.
Your employee shifts into survival mode. The brain's solution? Hide the behavior. Avoid detection. It's not a character flaw. It's biology.
Here's the neurological cost: Hiding creates cognitive load. Monitoring language, covering tracks takes energy away from actual work. It becomes a vicious circle; the more chronic the stress becomes, the more cortisol is released, putting the brakes on creativity and affecting the memory.
When your team can’t openly celebrate how they achieved excellent work, the motivation loop is not activated due to the lack of dopamine release. They can’t learn from it publicly, and they can't teach others.
This is why shadow AI isn't just a compliance issue; it's a human issue.
Why Most Policies Fail
Here's the disconnect: Seventy-seven percent of companies have AI policies. But only 52% provide approved tools. And just one-third of employees say those approved tools actually help them do their jobs.
You can't tell people to follow rules if the tools don't give them what they need to succeed. That's why employees bypass your systems. Not because they're reckless, but because your approved tools don't work.
Your policy becomes theater. And shadow AI becomes the workaround.
The Curiosity Advantage
Here's something neuroscience tells us: Your brain can't be curious and biased at the same time. They use different neural networks.
When you approach shadow AI with blame, you trigger threat responses in yourself and your team. Everyone gets defensive. Innovation stops.
But when you approach shadow AI with curiosity instead of judgment, your problem-solving part of the brain—the prefrontal cortex—is activated, signaling the amygdala to relax. Then creative solutions can emerge.
So, let's get curious. Why are smart, capable people hiding tools that help them work better? Because they don't feel safe showing you.
Building Safety
Psychological safety is deeply connected to neuroscience. With safety, the prefrontal cortex is engaged, the threat mode subsides and people feel secure taking interpersonal risks.Learning happens. Innovation happens. Collaboration happens.
Google's Project Aristotle researched 180 teams and determined that talent or resources were not the predictor for team effectiveness; it was psychological safety.
Shadow AI is a direct symptom of low psychological safety around technology. The fix isn't surveillance; it's transparency.
Three Moves That Change Everything
1. Model it yourself.
Your team watches everything you do. If you pretend you're not experimenting with AI, they assume they shouldn't either.
Next meeting, say this: "I used ChatGPT this week to summarize a report and saved myself two hours. I had to fact-check three things that were wrong. Anyone else experimenting?"
That's it. You signaled safety. The amygdala in your team registers: "My leader is doing this. It's okay for me, too."
2. Create guidelines, not bans.
Ambiguity can create threats, and bans can create rebellion. Instead, set clear boundaries to help reduce cognitive load.
Draft one page of plain-language guidelines: What's encouraged? What's off-limits? How should questions be managed? Then provide tools that actually work. If your approved tools can't help people do their jobs, your policy is just paperwork.
3. Make experimentation collaborative.
Prove it: When someone shares an AI mistake, ask what they learned. When someone shares a win, celebrate with the team. This creates social reward in the brain. Oxytocin releases. Dopamine flows. Your team learns that sharing AI experiments leads to connection, not punishment.
Your Monday Morning Move
Send one message to your team:
"I know some of you are experimenting with AI tools. I am doing the same. I would love to learn what you are trying, what is working, what is not and what questions or worries you have. Let’s learn together, supporting each other with no judgment.”
One message. It signals safety. It invites collaboration. It brings shadow AI into the light.Because here's the truth: Your team is already using AI. That isn't the question. The question is whether they feel safe sharing that with you.
It becomes a competitive advantage when shadow AI stops being a risk. Build that safety, and watch your team flourish when they don’t have to hide anymore.
You can also hear it on my podcast
You can schedule a FREE assessment session - https://www.calendly.com/saharandrade
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My name is Sahar Andrade, A Forbes Coach Council Influencer & a certified neuroscience coach; I help organizations increase employee engagement and performance by integrating neuroscience into leadership practices and delivering powerful leadership development coaching.
My new revolutionary book "The Coach's Brain Meets AI" is the #1 New release on Amazon.
I coach accomplished leaders who feel stuck—to reinvent their lives with courage, dissolve fear, gain clarity of purpose, and step boldly into their next chapter.
My teachings blend a unique global education with decades of experience, forming a proven method for lasting, positive transformation.
I use a proprietary framework grounded in human psychology, NLP practices, and cutting-edge research. Through a simple, step-by-step system, we deconstruct personal myths, reverse engineer blocks, and develop next-level leadership skills through modules, exercises, one-on-one sessions, and group coaching.
📘 Author of “49 Things About Entrepreneurship That Experts Don’t Want You to Know” (available on Amazon) 🎤 TED Talk: Overcoming Negative Thoughts 🎙️
Host of AI Café Conversations Podcast ranked #1 for "AI Coaching for Executives" & Page 1 visibility for "AI Neuroscience leadership" on GOOGLE
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