Turning urgency into opportunity: The CIO as a compass in an AI-first world

In recent years, the business environment surrounding companies has been changing at an unprecedented pace. Since the November 2022 launch of ChatGPT, generative AI has begun permeating companies and society at a staggering pace, foreshadowing a future AI industrial revolution. At our company, too, driven by a sense of crisis that our previous IT strategy was no longer effective, we reformulated it as our “DX and AI strategy.”

Furthermore, heightened global cyberattack risks and geopolitical risks demand a comprehensive review of information security risks and robust countermeasures from our company, which operates critical infrastructure. Japan faces an accelerating super-aging society with a declining birthrate. For our company, this necessitates not only strategies addressing the quality and quantity of human resources based on a shrinking workforce, but also essential measures for creating new value. These changes are not fleeting trends; they are fundamentally reshaping the very premises of corporate management.

A decade ago, it was an era where IT somehow contributed to business. The core role of the CIO then centered on the steady management of IT planning, implementation, utilization and operations, along with optimizing IT costs. In today’s era, where IT and business are inseparable, the role demanded of the CIO is to serve as a compass that connects management and the front lines, quickly detects signs of change, points the way forward for the organization and leads transformation.

The starting points for this transformation are a shared sense of urgency and curiosity.

This sense of urgency is not about stoking fear

The sense of urgency referred to here is not about needlessly stirring up anxiety or fear. It is a healthy sense of urgency — one where the entire organization sincerely and calmly accepts and shares the fact that the future may not lie along the extension of the present.

In many organizations, past experiences and successes — ideas such as “nothing major has gone wrong with the way we’ve always done things” or “this approach has worked well until now” — unconsciously dull sensitivity to the need for change. However, in today’s VUCA (volatility, uncertainty, complexity, ambiguity) era, where the speed of environmental change is accelerating exponentially, what was common sense yesterday may become nonsense today or tomorrow, potentially becoming obsolete.

The CIO is uniquely positioned to swiftly gather and analyze external trends like the latest technologies, and to gain a cross-departmental overview of the strengths, weaknesses, problems and challenges on the ground. Precisely because of this:

• If this pace of change continues, what problems could arise within the company and society?
• Where within the organization do structural challenges and risks lie?

The challenge then becomes driving transformation after securing understanding, empathy and agreement from management and the field.

Within our company, the “Five Ds” in the energy industry are:

1. Decarbonization: Zero-carbon initiatives aimed at reducing CO2 emissions.
2. Decentralization: Centralized control and operation of distributed small-scale power sources like solar power generation and grid-connected storage batteries.
3. Deregulation: Diversifying business operations and creating value beyond the electricity business following power market liberalization.
4. Depopulation: Enhancing productivity and creating new value amid a shrinking workforce.
5. Digital transformation (DX): The key to simultaneously addressing all four of the above Ds.

These challenges must be addressed.

Recognizing that the first step in transformation is sharing a healthy sense of urgency and that this sense of urgency is the energy for transformation and the starting point for action, we are also implementing the first three of the “Eight accelerators of change” described by John P. Kotter in his book “Leading Change”:

1. Heightening sense of urgency. The President issued a message stating,”Generative AI is an innovative technology with the power to significantly transform how employees work and how customers experience our services. Going forward, we aim to improve operational efficiency, modernize next-generation energy infrastructure and create new value through digital technology. We will continue to boldly take on challenges without fear of failure, forging a path toward a sustainable society and pioneering the future one step ahead.” This message serves to heighten a healthy sense of urgency across our entire group.
2. Forming a core group. We will assemble experts within K4 Digital, our dedicated digital subsidiary serving as the core group for DX, to provide comprehensive support for on-site DX initiatives.
3. Establishing vision and deciding initiatives. We have advanced top-down transformation by establishing a DX Vision Roadmap in preparation for the AI Industrial Revolution and implementing concrete measures such as the DX Strategy Committee.

A sense of crisis alone won’t move people or organizations

However, a sense of crisis alone cannot sustain people over the long term. Change driven by anxiety, fear or a sense of being forced will eventually lead to burnout, resistance and stalling. The key here is curiosity.

Curiosity is a positive, intrinsic energy — the desire to learn what we don’t know, try something new, and explore what we can achieve. Especially in digital and AI domains, the presence or absence of curiosity significantly impacts an organization’s learning and growth speed.

Furthermore, when the CIO themselves approaches new technologies and services with genuine interest, actively engaging with them, testing them and sharing insights — leading by example — it sends a message far more powerful than imagined. We believe an organizational culture that embraces Let’s try it first, Let’s test it quickly and at scale, and Let’s fail faster and more than others, learning and growing from those failures, emerges from the CIO’s consistent message and actions.

Within our company:

• As a platform for utilizing AI/digital tools, we have deployed OpenAI’s ChatGPT Enterprise to all employees and group companies. This enables everyone, including the president, to fully leverage generative AI as a weapon and create AI agents.
• As a small experiment I’m personally conducting as CIO, I’m trialing a DX PR strategy: conveying the message “Kansai Electric aims to be an AIFC (AI-First Company), not a JTC (Japanese Traditional Company)” alongside a profile image of “AI-Armed Akiho Ueda” created using generative AI.
• To engage young employees and frontline staff, we focus on identifying their desires and motivations to do something, keeping the stirrings of transformation firmly within management’s view. We establish psychologically safe spaces for self-realization and experimentation while removing obstacles to change.

We are advancing such initiatives.

Curiosity transforms crisis into opportunity

Only when a sense of crisis and curiosity are powerfully combined do opportunities become visible.

Even when faced with the same environmental changes, organizations that perceive them as threats and those that see new opportunities will take different concrete actions. Years later, they will find themselves in entirely different landscapes.

For example, the emergence of generative AI will transform many jobs, companies and society. Will this be seen as the risk of jobs being taken by AI, or as an opportunity for people to focus on more creative work? This difference in perspective will shape new management styles in the AI era, defining talent development, organizational design and organizational culture.

The crucial role of a CIO is never merely to discuss technology itself, but to demonstrate what kind of future can be created through technology. I believe that curiosity-driven questions encourage each individual to take ownership, bring positive creativity to the organization and increase buy-in for transformation.

Even within our company, when we first began pursuing DX, there was a period where progress stalled. We lacked sufficient environment and structure, yet we were merely shouting loudly, “DX is crucial now! Let’s dive in and challenge ourselves!”

When driving DX, we tend to focus on discussions about means — like which technology to use or which tools to implement. However, what truly determines DX success isn’t the technology itself, but rather the organizational culture built on psychological safety. When I realized this, I felt a ray of light appear. DX is a continuous series of challenges where there are no clear-cut answers. We formulate hypotheses, test new technologies, fail, learn and grow and then apply those lessons to the next step. This process itself is DX; there is no perfect goal or predetermined path laid out from the start.

Nevertheless, if an atmosphere prevails where the person who speaks up loses out, failure lowers their evaluation, saying the wrong thing invites criticism, or it’s better not to do something without precedent, people will stop challenging themselves. As a result, DX becomes nothing more than empty slogans, stalls at the Proof-of-Concept stage and leads to DX being merely pretended or becoming a hollow formality. Currently, our company is fully committed to transforming our organizational culture based on psychological safety. There is no doubt that this cultural transformation is accelerating DX and driving company-wide change.

The CIO is not the person who provides the right answers, but the person who poses the questions

In the VUCA era, finding a perfect, definitive answer is impossible. That’s precisely why I believe what’s required of a CIO is not to obsess over finding the right answer, but rather to keep asking questions. The three questions I particularly value are:

1. Why do it now? / What happens if we don’t?
2. How will the changes happening now impact our business and operations?
3. What should we preserve unchanged while leveraging digital technology to transform?

Constantly posing these questions to the entire organization, encouraging discussion, supporting trial and error and driving growth and transformation. This is precisely the role of the CIO as a compass for creating a bright future.

In closing: A sense of urgency and curiosity are the twin engines driving transformation

• A sense of urgency is the power to calmly face reality
• Curiosity is the power to forge a brighter future

Without both, it is impossible to move forward powerfully and persist. When the CIO achieves a high-level balance of these two and spreads them throughout the entire organization, change transforms from a crisis into an opportunity.

Precisely because we live in an era of high uncertainty, the CIO must become the compass, harnessing team strength alongside colleagues to seize major opportunities. We believe that challenging and failing more than others, and doing so faster, becomes the driving force that creates new corporate value and leads to sustainable growth.

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