Professor Yulin Fang and Lu Liu
7 January 2026
Artificial intelligence (AI) technologies, represented by generative AI and machine learning, are reshaping industries with unprecedented speed and potential. Reports indicate that AI is expected to elevate productivity by 33% and redefine the global competitive landscape and economic growth (see Note 1). Corporate investment in AI technologies continues to surge, and by 2025, one-third of global enterprises are projected to invest over US$25 million in AI (see Note 2).
This AI-centred digital transformation aims to a fundamentally overhaul how the organization operates, driving profound transformation in business operations, organizational practices, and business models to enable sustained value creation (see Note 3).
The plight of low returns and lack of digital executives
However, the massive investment has not yielded the broadly expected returns. A joint study by Deloitte China and the University of Hong Kong shows that AI applications in most enterprises remain at the experimental or early adoption stage, with benefits often limited to efficiency improvements at the team level. Only a small number of enterprises have been able to scale their AI projects to a level sufficient to generate quantifiable profit impact, and merely 4% view their applications transformative (see Note 4).
While enterprises have been attempting to incorporate AI into their products, workflows, and strategies to drive digital transformation, progress has been constrained by the absence of a clear implementation road map, underlining the necessity of establishing a dedicated senior leadership role. Individuals in this role are responsible for devising and communicating the overall digital strategy, advocating change to both internal and external stakeholders, and spearheading essential organizational adjustments to expedite AI-driven digital transformation. During practical implementation, enterprises may assign this responsibility to their Chief Executive Officers, Chief Information Officers, or Chief Digital Officers. As the helmsmen of the mission to drive digital transformation development and execution, they are collectively known as “digital executives” (see Note 5).
Core mission of digital executives
In the age of AI, the real challenge of digital transformation lies not in upgrading processes and systems, but in tackling the core issues of corporate brand DNA, how to create value, and with whom to collaborate. Outstanding digital executives must effectively address the three pillars of digital transformation―strategic, operational, and people. At the strategic level, they must be ready to respond to “how to set the direction”; at the operational level, to “how to put it into practice”; and at the people level, to “how to mobilize and sustain collaboration among members of the organization”.
At the strategic level, what AI brings to the table is not simply automation but a reconfiguration of organizational value and boundaries. Top digital executives must first clarify what problems transformation is meant to solve and, focusing on the core objectives of customer experience, growth, and efficiency, define the path for enhancing organizational value through digital technologies such as AI. At the same time, digital transformation inevitably breaks down departmental silos, especially between technology and business. Digital executives must, by formulating clear strategies, build consensus around the commercial value of digital technologies, exemplified by AI, thereby focusing the agenda, unifying language, and mobilizing resources.
In terms of operations, the biggest hurdles to achieving meaningful AI benefits are data quality, data consistency, and data context (see Note 6). Digital executives must be able to break down data silos and re-engineer cross-departmental processes to avoid fragmented development. The focus is not only on launching a specific system, but also on reshaping the organization’s mechanisms for decision-making, collaboration, resource allocation, and capacity building, reorienting them around the core value chain. Driven by data feedback, these mechanisms will facilitate continuous optimization, rapid learning, and iterative improvement, ultimately translating into sustainable competitive advantage.
At the personnel level, digital transformation reshapes responsibilities, roles, and performance metrics, inevitably triggering employees’ anxiety about being replaced by AI and causing friction between departments. Successful transformation is rooted in the coordinated actions of organizational members. Digital executives need to clearly articulate the reasons for change, the strategic direction, and the success metrics, and, through transparent rules and pilot programmes, mitigate uncertainty. The key lies in enabling front-line staff to engage in co-creation, positioning AI as a collaborative partner rather than just a replacement tool, actively building a culture conducive to collaboration and tolerant of trial and error, thus turning resistance to change into a driving force for progress.
Essential qualities of a digital executive
Judging by both industry experience and mainstream research, it is evident that digital executives who successfully lead transformation share the following common characteristics.
- Business acumen. This involves keen market insights and strategic planning skills to transform technology trends such as AI and Big Data into concrete business opportunities and to formulate digital blueprints in line with the overall corporate strategy. The key lies in the ability to convert technological investments into tangible business outcomes, including cost reduction, efficiency gains, and new growth opportunities, and to effectively drive cross-functional coordination, ensuring the penetration of strategies to the execution level.
- Technological literacy. This involves a deep understanding of the application scenarios and limitations of key digital tools such as AI, cloud computing, and the data middle platform, along with familiarity with the basic logic of data management and analysis. Such literacy enables digital executives to effectively collaborate with technology teams, assess and promote the implementation of technology solutions, and dedicate themselves to building reusable digital components within the organization to achieve cross-system interoperability, ultimately establishing the systemic capability in support of end-to-end value delivery.
- Soft skills. Digital executives should build trust through empathy and humility, enabling staff to focus on how to become stronger rather than worrying about being replaced in the age of AI. Apart from outstanding communication skills to explicate the value of digital technologies such as AI to those without a technical background, they also need to coordinate internal and external relations, promote collaboration among cross-functional departments, and foster consensus to jointly address the uncertainties and challenges of transformation.
Organizational design hinges on contextual adaptation
One misconception in practice is the pursuit of an all-rounded digital executive who is equally adept at technology, strategy, organization, and culture. Notably, given that outstanding digital executives have diverse traits that manifest different effects across organizational contexts, companies should prioritize leadership alignment over blindly seeking all-round capabilities.
Research by MIT Sloan Management Review supports this view, noting that successful transformation depends more on the contextual fit of different leadership skills than on a single ideal model (see Note 5). Analysing digital executives from varied career backgrounds, my research team found that those with an information technology background are best suited to lead transformation in companies pursuing a cost-leadership strategy, whereas those with a business background are better suited to companies with a customer-centric strategic orientation.
Looking ahead, top-tier digital executives should not adhere to one-size-fits-all formulas but should instead develop profound insight into their organization’s internal and external environments, tailoring approaches accordingly, and converting technology into distinctive organizational capabilities and long-term competitive advantages. Their appointment no longer rests on a generic checklist, but is calibrated to the organization’s strategic orientation, cultural DNA, and stage of transformation. Above all, they should be assessed on whether they can accurately identify and deftly steer a transformation journey best suited to the organization. This will serve to enable technology and organizational evolution to reinforce each other, align transformation initiatives closely with business operations, and guide the enterprise to secure sustainable competitive advantages in the era of AI.
Note 2: https://www.bcg.com/press/15january2025-ai-optimism-autonomous-agents
Note 3: https://www.mckinsey.com/featured-insights/mckinsey-explainers/what-is-digital-transformation
Note 5: https://sloanreview.mit.edu/article/four-profiles-of-successful-digital-executives/
Note 6: https://www.cio.com/article/4098017/get-data-and-the-data-culture-ready-for-ai.html
