When the CEO leads the AI initiative

Having been involved in some of the most significant technology-driven business and cultural shifts over the past five decades, including the explosive growth of the internet and the rise of open source, there are parallels from the past that are worth considering in the age of AI. A critical one is the role of the CEO in leading a company’s AI initiative.

While I strongly believe that AI is one of the most transformative forces to come along in decades, there is something strikingly different about this shift. It’s not just the nature of the technology, but the degree to which CEOs are stepping in to lead its adoption in the enterprise.

History provides a useful context for this belief. As the general manager of IBM’s Internet Division, I had overall responsibility for IBM’s internet strategy in the 1990s. But I could not have been successful without the strong, visible support of our CEO, Lou Gerstner. To help me rally the troops, it was one thing for company decision makers to say, “This is Irving’s strategy,” and quite another to say, “This is Lou’s strategy.”

A few years later, when I was responsible for driving IBM’s Linux and open-source strategy across the company, the same dynamic applied. I could not have done it without the strong, vocal support of our then-CEO, Sam Palmisano.

Based on these experiences, I believe that if a CEO is not engaged with and a champion of AI throughout their organization, their company will not be able to develop a successful company-wide AI strategy. But, while CEOs must play a critical role in ensuring the success of AI in their organizations, their role is to champion and support their company’s overall AI strategy.

What a CEO-led AI effort requires

When it comes to CEO-led AI adoption, the chief executive’s role is to champion it both within the company and in the wider marketplace. Internally, they should review its progress with senior executives and department heads and compare it with key competitors. From an external perspective, CEOs should update their boards and discuss their AI strategy with key external constituencies, including customers, press and financial analysts.

However, and this is an important distinction, the execution should be left to the executives across the organization. Just as a CEO should not lead the company’s financial strategy but instead work closely with their CFO, the CEO should not solely lead the company’s AI strategy. Rather, they should work closely with the CIO, division heads and other senior executives on their AI applications, products and services.

That said, this model works differently depending on the size of the company. In a small-to-medium-sized company, the CEO can perhaps be more involved not just in formulating the strategy but also in its implementation. In a large, complex company, that level of direct involvement becomes very difficult to manage.

The CIO’s role

In a CEO-led AI initiative, the CIO plays an increasingly significant role. Arguably, never has the CIO been so critical to the future of the organization. CIOs need to have a deep understanding of AI, a highly complex, fast changing technology, and its business implications. They need to work effectively across the entire organization to develop a realistic, viable and competitive AI strategy. They also need to clearly discern what is AI hype from what is achievable and makes sense for the business.

A CEO’s enthusiasm for AI can be helpful so long as it doesn’t get misled by the market’s unrealistic exuberance, which tends to happen upon the arrival of exciting new technologies like the dot-com craze in the 1990s. Today’s CIOs need to harness a CEO’s enthusiasm and use it to motivate the organization. For example, if a competitor has successfully built and deployed an AI solution, that information can be helpful in rallying the organization to move faster.

However, keeping an eye out for successful AI deployments is only one example. In larger organizations, research teams should explore new ideas and test them with marketplace prototypes before additional resources are put toward product development. Smaller organizations should closely watch the marketplace and embrace successful applications in order to remain competitive.

Building a solid foundation between the CIO and CEO

The CIOs who will thrive in a CEO-driven AI environment are those who build a good relationship with the CEO, have a solid track record of making sound decisions, and have earned the trust of colleagues and the C-Suite. By contrast, if a serious gap exists between what the CEO believes AI can do and what is realistically possible, the consequences for the enterprise will be significant.

A successful AI initiative requires the CIO to listen carefully and clearly explain their position and recommendations, including bringing in the opinions of other experts outside the company where appropriate. They should spend as much time as possible not only understanding the technology but also understanding how to explain what is required from a business perspective. In their role, it is less about tech tactics and more about strategic business value. When dealing with a highly complex and important new technology like AI, being able to communicate the opportunities as well as what works and what does not work is critical.

For example, if a CEO consistently makes unrealistic promises to the board, the board may replace the CEO. An initiative that fails under CEO-led adoption reflects not only on the CEO and perhaps the board, but also on the CIO and other senior executives for failing to clearly explain why the initiative is not technically or economically viable. Unrealistic promises in the early years of a new technology generally lead to a financial bubble.

How the CIO-CEO dynamic will evolve

The more we understand what works and what does not work with AI, the less the CEO will need to be directly involved with the technology strategy. As the path becomes clearer, the CEO can turn their attention to articulating the success of their strategy in the marketplace, growing the business, pursuing acquisitions and other important matters.

For CIOs who navigate this period well, the upside is significant. Given how critical it is for the CIO to be respected and have good relationships across the company, if the company does well based on the CIO’s recommendations, their position in the company will be significantly enhanced.

The next generation of CIOs who succeed with AI will need to be thoughtful and articulate, with strong social and communication skills along with technical depth. We’ll be discussing this topic and more at the MIT Sloan CIO Symposium in May because it is clear that AI is giving technology leaders a once-in-a-generation opportunity to demonstrate their leadership.

This article is published as part of the Foundry Expert Contributor Network.
Want to join?