Many CIOs lack the bandwidth and authority to solve the tough cultural and organizational change challenges that can block AI success. It’s time for an expanded leadership role.
Summary. Artificial intelligence is changing how humans and machines work together. But most organizations still focus on the technical aspect of AI implementation because their leadership structure does too. Companies need a new role, the chief innovation and transformation officer, to manage the profound cultural and organizational changes AI adoption brings. Here’s why forward-thinking organizations already have or plan to hire such leaders.
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ARTIFICIAL INTELLIGENCE is fundamentally transforming how organizations operate, but this transformation extends far beyond technical implementation. Modern AI systems are increasingly taking on roles that previously would have been filled by human workers. People working alongside these AI systems often need reskilling, upskilling, and training in behavioral traits such as critical thinking. To successfully manage this blend of AI tools and humans working together in new ways, leaders need to understand complex human and organizational factors, such as agility and cultural change, personality dynamics, and emotional intelligence.
Yet most organizations continue to treat the implementation of AI as a primarily technical challenge — and current technology leadership roles reflect this mindset. According to Foundry’s 2024 State of the CIO survey, 85% of IT leaders say that CIOs are increasingly becoming changemakers in their organizations, but only 28% call leading transformation their top priority. In another recent survey, 91% of large-company data leaders said “cultural challenges/change management” are impeding organizational efforts to become data-driven. Only 9% pointed to technology challenges.
But instead of focusing on the aspects of cultural and organizational change that are relevant to AI, much of the time and effort of IT and data leaders is spent on operational functions, long seen as the bread and butter of these roles. This operational focus seems to be increasing: Sixty-one percent of CIOs in the Foundry survey reported having less time available for strategic responsibilities over the past year than in previous years.
Although AI-enabled transformation clearly has enormous human and organizational implications, HR leaders have, for the most part, not stepped up to deal with such changes either.
When leaders fail to think through the strategic and organizational consequences of their AI plans, the results can be catastrophic. Zillow’s failed attempt to use AI-generated property valuations as the basis for its own homebuying division not only cost the company $300 million in losses but also saw its stock price fall by more than 20% as investors lost confidence in its ability to navigate the AI transformation. In another example, California State University had a clear strategic vision but failed to account for the human element. In early February 2025, the university announced a plan for integrating AI across all its systems and services, led by its newly formed AI Workforce Acceleration Board comprising representatives from 10 leading AI companies. Within a week, the initiative faced fierce opposition from staff members and students who objected to both the goal of the project and its implementation.
Sastry Durvasula, the chief operating, information, and digital officer at TIAA, views workforce transformation as a key part of his role.
The consequences of an excessively technical approach to AI implementation can also be seen on a more granular level. When Air Canada deployed a generative AI-based chatbot to assist travelers with booking flights, the goal was to create a more efficient and streamlined customer service experience. However, when the chatbot made mistakes about bereavement fares, passengers dealing with the loss of a loved one were faced with additional challenges to manage in an already difficult situation. This case underscores the need for organizations to address the human-facing personality of AI models, their decision-making authority, and the kinds of ethical boundaries and special circumstances in which it might be essential to have a human in the loop.
All of those examples highlight a crucial gap in organizational leadership. While CIOs and CTOs play critical roles in technical implementations and system maintenance, they sometimes lack both the bandwidth and the mandate to address the broader human and organizational implications of AI transformation. Organizations require a new kind of leader.
The new role we envision as being essential in the age of AI — which might be called the chief innovation and transformation officer (CITO) — combines technical expertise, behavioral insights, and strategic vision with a deep understanding of organizational psychology and culture change. This combination of skills ensures that organizations are properly equipped to manage the profound changes that the age of AI will bring. Companies are still debating the job title, but forward-thinking organizations are already employing, or hiring for, such leaders. Let’s explore the reasons.
Why AI Requires a New Leadership Model
The challenge of implementing AI effectively extends far beyond technical prowess. Leaders responsible for AI implementation must be able to do the following:
- Navigate complex ethical landscapes. AI deployment requires careful consideration of ethical implications, bias mitigation, and alignment with organizational values.
- Foster cultural transformation. Successfully integrating AI — and, particularly, AI agents — means transforming an organization’s culture to embrace new ways of working and thinking.
- Manage human-AI collaboration. Leaders must understand both AI capabilities and human skills and psychology if they are to create effective partnerships between human workers and AI systems.
- Drive cross-functional integration. AI implementation touches every part of an organization, requiring leaders who can work across traditional silos.
- Deal with citizen development. AI is enabling businesspeople to develop systems and models that could previously only be created by IT professionals — a work trend requiring simultaneous encouragement and risk management.
- Ensure responsible innovation. Leaders must balance the drive for business innovation with careful consideration of the potential risks and societal impacts.
Some people serving in traditional IT and data leadership roles that focus on technical implementation and system maintenance may lack the skills and the bandwidth to address these broader challenges. Even for CIOs who have succeeded at driving revenue, the AI age raises the difficulty level. This misalignment is one reason why so many AI initiatives fail to achieve their goals.
New Hiring Patterns, Expanded Leadership Roles
Recent data shows that businesses are responding to the accelerating pace of technological change by broadening their C-suites to include roles dedicated to innovation, AI, and transformation. Increasing compensation levels and a surge in hiring reflect the strategic importance of innovation leadership, AI expertise, and transformation management.
Leaders with titles such as chief innovation officer, chief AI officer, and chief transformation officer are becoming increasingly common as companies wrestle with how best to meet these strategic needs. A study by Boston Consulting Group found that the number of companies hiring chief transformation officers increased by more than 140% from 2019 to 2021, and that those companies experienced a significant increase in total shareholder return in the year after the new appointment. This hiring trend has continued over the past three years.
The most effective leadership roles for managing AI will combine both technical and organizational change responsibilities.
Early Examples of CITO-Type Roles
A recent advertisement for a position at State Street Bank exemplifies the breadth of competencies required in these new leadership positions. The responsibilities of the role of chief transformation officer within the bank’s central Global Technology Services unit include “enterprise transformation leadership,” with specific accountabilities for driving “innovation and modernization initiatives, including automation, AI, blockchain, and cloud adoption,” as well as leading “cultural and organizational change efforts to embed agility, efficiency, and a customer-first mindset.” Other responsibilities involve business process optimization, customer experience and digital innovation, and change management. As of mid-March, the job had not yet been filled, and it may be difficult to find such a combination of skills. But the job description perfectly illustrates the responsibilities we envision as coming together in an office of innovation and transformation that is led by the equivalent of a CITO.
The CITO (or equivalent) role encompasses several critical functions. At the strategic level, these leaders align AI initiatives with organizational purpose while developing long-term transformation road maps. They ensure ethical alignment across implementations while creating frameworks for sustainable innovation that balance technical advances with human values.
An Emerging Requirement: AI Persona Management
AI persona management is an example of a new responsibility that requires new leadership from a CITO. Generative AI tools already can be asked to take on specific personalities — a teacher, a scientist, a lawyer, and so on. As agentic AI use grows, companies will need to manage AI agents with increased levels of autonomy and specific attributes and identities.
AI personas can be autonomous or collaborative with human workers, requiring leaders to manage the interplay between human psychology and intelligent machines.
You may think of AI personas as digital characters or workers with specific traits, priorities, and capabilities that are designed to interact with users and process information in customized ways. They perform defined tasks or serve as interfaces between humans and AI systems. This allows organizations to create distinct roles — such as strategic adviser and customer service agent — tailored to specific use cases. AI personas can be autonomous or collaborate with human workers, requiring leaders to understand and manage the delicate interplay between human psychology and intelligent machines.
Full article available @ MIT Sloan Management Review.
