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Rotman Insights Hub | University of Toronto - Rotman School of Management

Leading in the age of AI: Why leaders must be strategists of digital transformation

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Derek Cullen, Walid Hejazi

We are entering a new era, one defined not just by technological advancement, but also by the speed and scale at which it is transforming organizations. Artificial intelligence (AI) and generative AI (genAI) are serving as foundational forces reshaping industries, redefining roles and rewriting the rules of competition. As in the case of the digital revolution, there will be significant disruption for those that don’t embrace these technologies effectively and responsibly.

For leaders, especially chief information officers (CIOs), chief data officers (CDO) and increasingly chief artificial intelligence officers (CAIO), the challenge is clear: How to lead digital transformation at scale while navigating the profound risks and opportunities of AI? The answer lies in preparation, mindset and mastery of frameworks that enable strategic influence within their organizations. It is no longer enough to focus solely on IT infrastructure, data governance and architecture, information security and operational efficiency. While these organizational bedrocks are absolutely necessary, they should be viewed as table stakes for those leading digital transformation and the integration of AI into organizations.

These leadership roles have evolved dramatically to include the necessity for CIOS, CDOs and CAIOs to be seen as strategic partners, helping shape business models, drive innovation, and guide ethical AI deployment. These requirements align with the results of a 2025 survey of Fortune 1,000 global business leaders, which found that data leadership roles including those focused on AI are increasingly central in business activities, with 80 per cent of respondents reporting that these roles are focused on business innovation and business growth.

This shift requires a new kind of leadership, one that understands not just the technical dimensions of AI, but its strategic implications as well. Leaders must be able to align IT strategy with business goals, influence cross-functional decision-making, and deploy technologies that align with the organization’s vision and purpose. 

Deploying AI and genAI at scale presents immense opportunities. From predictive analytics and intelligent automation to personalized customer experiences, accelerated R&D, enhanced supply chain optimization, real-time fraud detection, dynamic pricing strategies and intelligent talent management, the potential is transformative. But with great power comes great responsibility.

Leaders must grapple with complex questions: How do we ensure data privacy and security? What are the ethical boundaries of genAI in decision-making? How do we prevent bias in algorithms? How do we build trust with stakeholders — internal and external? These are not just technical questions, they are leadership challenges. Leaders must be equipped to lead responsibly, balancing innovation with governance, and agility with accountability.

We live in a world of constant change, and the emergence of genAI is the latest manifestation of that theme. As the great Greek philosopher Heraclitus wrote, “The only constant in life is change.” And as Clayton Christensen demonstrated in his famous book on the Innovator’s Dilemma, established, successful companies can fail due to disruptive innovations, even when they are doing everything "right" according to traditional business practices. Change is required. 

To successfully implement these strategies, it is essential that senior leaders, including the CEO and the C-suite more broadly, actively champion and enable AI and digital transformation initiatives. Their support is critical in aligning organizational priorities, securing resources, and fostering a culture of innovation and ethical responsibility.

The pace of technological change will only accelerate. AI and genAI will continue to evolve, bringing new capabilities, and with that new challenges. In August 2025, OpenAI released its GPT-5 model, which claims to provide “PhD level” insights. OpenAI describes this as a “significant leap in intelligence over all our previous models”. 

It is imperative that leaders embrace these new technologies, not only to future-proof both their careers, but that of their organizations as well. The leaders who thrive will be those who are prepared, strategic and ethically grounded. Those organizations that do not successfully integrate AI into the organization’s purpose will fail to optimize on the incredible opportunities that are possible.


Derek Cullen is the chief information officer at Stikeman Elliott and member of the Board at CIOCAN.
Walid Hejazi is a professor of economic analysis and policy at the Rotman School of Management.