December2025

Mckunsey

Quarterly

BuildingtheAImuscleofyourbusinessleaders

TherealcompetitiveadvantagewithAIcomesfromhavingbusinessleaderswhocanbridgebusinessproblemswiththepossibilitiestechnologyoffers.

byDanaMaor,EricLamarre,andKateSmaje

Oneofthemostcriticalroadblockstoachievingat-scaleimpactwithdigitalandAI(D&AI)transformationsishavingasufficientbenchofdomainleaders.ThesearetheN-2andN-3executives(thatis,thosetwotothreelevelsbelowtheCEO)wholeadadomain(eithera

businesslineorfunction)anddriveend-to-endtransformationwithAI(seesidebar,“Whatisadomain”).AItoolsareeverywhere,buttheskillstoapplythemtorealbusiness

problems—improvingcustomerexperiencewhiledrivingdownunitcostsatscale—arenot.

HavingthesedomainownersisprobablythesinglemostcriticalroleanybusinessneedsforitsAItransformations.TheCEOhastoleadthetransformationoverall,andtheC-suiteneedsto

alignonprioritiesandenterprisecapabilitiestoenableAI.Butit’sthedomainleaderwhohastheoperationalresponsibilityfortranslatingthevisionsandplansintorealchangeandrealvalue.

Whatisadomain?

Adomainisanend-to-endbusinessprocess(oravaluestreamifyouarefromtheschooloflean

management).Domainsarelargeenoughtodelivermeaningfulimpactonceimprovedbutsmall

enoughtobetransformedwithoutunduedependenciesonotherpartsofthebusiness.Eachdomaintypicallyrequiresfiveto15interrelatedusecasesorsolutionstobeimplementedtocapturetherealtransformationalvalue.DigitalandAItransformationsscalebyessentiallyaddingnewdomainsor

deepeningimpactinexistingones.

Thatfocusonthedomainisparticularlycriticalbecausemost,ifnotall,companieswehavestudiedderivethemajorityoftheirbenefitsfromafewdeeplytransformeddomains.

So,whileit’simportanttobuildupthetech-savvyskillsofeveryoneinthebusiness,wewill

focusthisarticleonthedomainowner.Themosteffectivedomainownerscanspeakto

customerneeds,strategy,organizationaldesign,andoperationalperformance—thetraditionalexecutivemuscle.Buttheyalsohavebuiltupa“secondmuscle”:beingtechsavvyenoughtodevelopanAI-enabledtransformationroadmap,understandmodernsoftwaredelivery,and

appreciatethehealthoftheirdataestate,technologyplatforms,andengineeringtalent.

Weare,however,farfromhavingenoughdomainleaderstoday.OuranalysisofLinkedInprofilesofseniorleadersinFortune500companiesindicatedthatjust17percentoftheirskillsetis

technicalbynature,andonly5percentoftheircareersincludedholdingatechnicalrole.1That’snotsurprising.Historically,tech-capableleaderstendedtobuildacareerinIT.

1Theanalysiscovered3,348C-suiteleadersand903,565seniorleadersin492globalcompaniesintheFortune500.Tech

education:STEMfieldssuchasmathematics,engineering,etcetera;techskills,asapercentageofallskillsmentionedineach

profile(forexample,datascience,DevOps,cybersecurity,etcetera);tenureintechroles:thepercentageofcareerspentinrolessuchasvicepresidentofengineering,chiefdigitalofficer,etcetera.

BuildingtheAImuscleofyourbusinessleaders2

BuildingtheAImuscleofyourbusinessleaders3

DespitetheshortageofdomainownerswithstrongAImuscles,amodelforwhatittakestobeaneffectivedomainowner—andhowtobuildthecorrespondingtechmuscles—isemerging.

Whatskillsdefinedomainowners?

MeetAdamBoyd.He’saseniorexecutiveatCitizensBank.Afewyearsago,heledabusinesslinecalledhomeequitylending,whichletscustomersborrowmoneyusingtheequityintheir

homeascollateral.Adamhadavisiontoreinventthecustomerexperiencewithtechnology.Hisvisionwastoprovidehomeownerswithpreapprovedlinesofcredit,amuch-streamlined

applicationprocess,andautomatedback-officeoperationssocustomerscouldreceivetheirmoneyinjustafewdays,comparedwiththeindustrystandardtimeofasmuchas35ormoredays.

BringingthisvisiontorealityrequiredAdamtoworksidebysidewiththebank’stechnology,credit,risk,compliance,strategy,andfinanceleaderstodeveloparoadmapofusecasesthatwoulddeliverthisnewoffering.Keyelementsincluded1)usingdataandAItoautomatethe

analysisofcustomers’creditbackgroundstopre-underwriteoffers,2)creatingpersonalizeddigitalmarketingcampaigns,3)streamliningthedigitalapplicationtojustafewclicks,and4)implementingprocessautomationtoreduceback-officecycletime.

Thebank’sleadershipwasexcitedabouthisplanandprovidedhimwithfourcross-functional

developmentteams.LeadingtechdeliveryteamswasnewforAdam.Hehadtolearnagile

softwaredevelopmentandthedifferentrolesonanagileteam.Healsolearnedaboutthebank’sdataarchitectureandoveralltechnologystacktobuildthisnewoffering.Adamdidn’tjust

overseetheseteams;hestayedcloselyinvolvedtohelpovercomeroadblocks,redirect

developmenteffortswhenneeded,andensure,throughiterativetesting,thatthetechnologybeingbuiltwouldmeetcustomerneeds.

Finally,Adamownedthechangemanagementendtoend—resolvingchannelconflicts,

resequencingoperationsworkflows,andupskillingcolleaguesacrosscontactcentersand

branches.Thisrequiredcollaboratingcloselywithseniorcolleaguesindistribution,marketing,riskmanagement,technology,andoperations.

Thisprogramwasn’talwayssmoothsailing.Hardcross-functionaltrade-offswereoften

requiredfromtheC-suite,suchasreallocatingmarketingspendtodigitalchannelsand

revisitingcreditpolicies.Twoyearslater,however,Adamandhiscolleaguesdelivereda

breakthroughcustomerexperiencethatfaroutpacedtheindustry,andtheyachievedlowersellingandservicingcosts.

Adam’sstoryisrarebutnotunique.TakeNeeshaHathi,theheadofWealth&AdviceSolutionsatSchwab.Shewasnotatechnologistbytrainingbutlearnedtheropesthroughaseriesof

BuildingtheAImuscleofyourbusinessleaders4

earlierrolespriortohercurrentposition,includingrunningasoftwaresubsidiaryandbeingchiefdigitalofficer.Shebecameformidableattransformingcustomerjourneysandoperations

processeswithtechnology.OrtakeMennoVanderWinden,who,whenhewasheadofQualityandProductDevelopmentatTataSteel,builthismuscleinapplyingadvancedanalyticsandAItoimproveproductqualityandproductivityinoneofthelargeststeelplantsinthe

world—drivingstep-changeimprovementsinqualityandproductionthroughput.

TheseleadersexemplifythekeyskillsthatAI-andtech-capablebusinessleaders

develop—whatwearecallingthe“secondmuscle.”Whenbusinessleadersmasterthiscraft,theyhavetheabilitytodothefollowing:

—Reimaginetheirdomainandcreateatransformativevisionwiththecustomeratthecenter.Theyunderstandcustomerpainpointsandunmetneeds.Theyknowthemajorsourcesof

wasteintheiroperations.TheyusecreativityandpatternrecognitiontoreimaginethebusinesswithAI—notjustautomateanexistingworkflow.

—DevelopAI-enabledtransformationroadmaps.Theyknowhowtoworkwithdomainexpertsandfunctionalspecialiststoreimagineend-to-endprocessesthroughAIandtechnology.

TheyturnthoseinputsintoacomprehensiveroadmapofsequencedusecaseswithclearKPIstiedtooutcomes.Theydon’tdelegatethisjobtoITorlowerdownthelineintheir

organizations.Theyownitbecauseit’smissioncritical.

—Overseetechdelivery.Whiletheyarenotdeeptechnologyexperts,theseleadershavesufficienttechdepthtooverseedevelopment,helptheirteamsprioritizework,solve

problemstoovercomeroadblocks,andeffectivelychallengetheirthinking.Theywork

quicklyanditerativelytobuildscalablesolutionsthatdelightcustomers.Andtheytake

advantageofhavingcross-functionalteamsundertheirleadershiptodrivedevelopmenteffectivenessandspeed.

—Leadend-to-endchangemanagement.Tech-capablebusinessleadersdon’tdelegatetheresponsibilityforimplementingtheirAIsolutions.Theyowntheiradoptionandscaling.Theyareaccountablenotjustfordevelopingsolutionsbutalsoforensuringthatthesesolutionsdelivervalue.Becausetheyhavethebestoverallviewoftheend翻to翻endprocessbeing

transformed,theyarebestplacedtodesignandorchestrateawell-integratedchangemanagementeffort.

ThebusinessleaderswhodevelopthissecondmuscleholdthekeytoyourfuturewithAI.That’swhythebig(maybethebiggest)questionforanyCEOorboardmembertoansweris:HowmanyAdams,Neeshas,andMennosdoesyourcompanyhave?

BuildingtheAImuscleofyourbusinessleaders5

Howdoyoubuildasecondmuscleandbecomeadomainowner?

BuildingyourAI-savvyquotientisanongoingjob;don’texpectatechbootcampandthe

occasionalmeetingwithstart-upstobesufficient.Buildingthissecondmuscle—andkeepingitfromatrophying—takesintent,discipline,andlong-termfocus.

Learnlikeit’syourmission

Manycompanieshavesophisticatedtrainingprograms,butattheendoftheday,domainleadersunderstandthattheyneedtoowntheirlearningjourneys.Wecallthem“fearlesslearners,”andtheyaredrivenbycuriosityandapassiontobroadenanddeepentheir

knowledge.

CitizenBank’sBoydspendssixtotenhoursaweekdiscussingandlearningabouttech-relatedmatters.Thiscomesinmanyforms:protectingtimetoreadaboutthelatestdevelopments,

exchangingviewswithtechnologyleadersathisbank,meetingtechvendorsandconsultants,attendingsprintreviews,goingtoconferences,visitingotherfinancialinstitutionsthathave

donenovelthings,meetingwithfintechstart-ups,takingonlinecourses,etcetera.

Schwab’sHathidescribedhowimportantitistoactivelylookforopportunitiestodeepenyourlearning.Forexample,asaboardmemberofahealthcompany,sheisamemberoftheNationalAssociationofCorporateDirectors(NACD).Whenshewasconsideringcontinuingeducation

courseoptions,shedecidedtodeepenherknowledgeofcyberandtooka30-hourcourseoncybersecurityrisk.

Fixateonvalueandreimaginewhatittakestogetit

AIpretenderschaseaquickproofofconcepttocheckaboxontheirperformancereview.

“Usingtech”leadstheirthinking.VanderWindenneverstartswithtechnology.Instead,he

startsbyaskingwhatthebiggestproblemsare,andthenhefiguresoutifatechnological

approachmightsolvethem.“I’mnotadatascientist,”hesaid.“WhatI’velearnedistoidentifytheattractiveproblemsworthsolving.”

Thatessentiallymeansdomainownersgoafterbusinessproblemsthatareworthgettingoutofbedfor.Ourruleofthumbisthatthepotentialvalueofatransformationaleffortshouldgenerate20percentofincrementalvalue.Domainownersareparticularlyopentonewwaysofdoing

thingsinsearchofthatvalue.Theygobeyondimprovingprocessestoreinventingjourneysandbreakingorthodoxies.

WeareseeingthelatestiterationoftheimportanceofthismindsetwithAIagents.Companiesfindingsuccesswithagentsdon’tfocusonindividualusecasesorsimplyautomateexisting

processes;theyarereimaginingend-to-endworkflowstotakeadvantageofagentcapabilities.

ThismindsetisgroundedinafirmunderstandingofwhatAIcando,anditcannotbedelegated.AsHathiputit:“Manybusinessleaderswhoarelesstechsavvywillsimplysaytheydon’t

BuildingtheAImuscleofyourbusinessleaders6

understandtechandturntechnologychallenges—oropportunities—overtoITtosolve.”Theresultofthisimpulsetodelegateisoftenconstrainedthinkingandmarginalimprovementsratherthanusingtechtounlocksubstantialnewvalue.

Understandtheoperationalleverstogetvaluefromtech

It’sneverjusttechwhenitcomestoextractingvaluefromtech.Domainleadersunderstandthatensuringtechnologydeliversonitspotentialrequiresintegratingsystems—bothtechnicaland

organizational.Thissystems-levelthinkingisessentialtosuccessfullyrewiringthebusiness.

BoydcapturedthisideawhendescribingthevalueequationofD&AItransformationasrestingonthreelegs:people,data,andtechnology.“Therealpoweroftechnologyisworkingwiththerightpeopletobuildsystemsthattakecustomerinputs,marrythemwithbettermodels,and

deliverbettercustomerexperience,”hesays.

VanderWindenvoicedasimilarbeliefthatdevelopingtechnologysolutionsdependedonmuchmorethanthetechnologyitself.Heunderstood,forexample,theneedforleadership

commitmentfromthebusinesssideofthehouseaswellashowimportantitwastohavegooddatainplace.“Iwouldonlycommittoasolutioniftherewereabusinesscaseandasenior

ownerfromthebusinessattachedtoit,andifthedatawasavailableandofreasonablequality.”

Theintense,cross-functionalnatureofaD&AItransformationrequiresamuchgreaterlevelofcollaborationacrosstheorganization.Thatmeansdomainownersroutinelyneedtoengageandworkwithleadersacrossvariousfunctions,whetherthat’sbringingriskexpertiseearlyintothesolutiondevelopmentorworkingwithfrontlineteamstoensuresolutionsareadopted.

Onatechnicallevel,thissystemsviewisoftenreflectedinanabilitytounderstandenterprisearchitectures,inthesamewaymanyseniorleadersunderstandcapitalortalentarchitectures.

That’sbecausedecisionsaroundenterprisearchitecturearecrucialtodrivingscale,buildingupresiliency,andenablingthekindofcross-functionalcapabilitiesthatsupporttheend-to-end

workflowsthatareneededtogetvaluefromAI

.

Getyourhandsdirty

ThereisnosubstituteforlearningonthejobwhenitcomestobuildingupyourAImuscle.

Clearly,businessleadersneedtorelyonskilledtechnologistsandengineerstosolveproblems.Butthatdoesn’tmeansimplydelegatingtheworktothem.Tech-savvyleadersgetintothe

weedswithteamstodevelopsolutions.

Hathiemphasizedthatdevelopingthistechsavvinessrequiresleaderstogetpastaconceptualunderstandingoftechandgraspitatapracticallevel.“Itstrengthensyourinstinctssoyoucanquicklytellifatechnologyprogramorissueisbigorsmall,complexorstraightforward.”

Havingthatpracticalunderstandinghelpstoovercomeanissuethatbedevilsmanyexecutives:difficultycalibratingorjudgingtheprogressoftechprograms.Manywillstruggletounderstandifatechprojectisgoingwellornotbecausetheydon’tunderstandthepracticaldetailsthatcandeterminethesuccessofatechnologysolution.

BuildingtheAImuscleofyourbusinessleaders7

Hathididn’thaveatraditionaltechbackground,sosheinvestedtimeinworkingwithteams.“I

participatedinthedesignworkshops,reallydiggingintotheissuesandfiguringthemout,”shesays.Sheworkedwithengineers,datascientists,techleads,andproductexpertstounderstandwhattheyweredoing.“WhenIthenspokewiththeboard,Icouldspeakwithconfidenceand

credibility...abouthowcertaininvestmentswouldhelpourteamsbuildtheproductsandservicesweneeded,forexample.”

Developanosefortechtalent

Talenthasalwaysmattered.Butfewleadersunderstandhowmissioncriticalthatiswhenit

comestotechtalent,whereatopengineerorarchitectcangeneratetentimesmorevaluethantheirpeers.Inour

Rewired

work,we’veobservedthatsuccessfulleadersspendmostoftheir

timeonpeoplequestions,fromrecruitingtooperatingmodelsthatallowpeopletothriveintheirwork.

Thisincludesspendingtimewithproductowners,dataengineers,datascientists,solution

architects,andAIspecialiststoappreciatewhatdifferentiatesthebestofthem.Cantheyexplainthesolutionarchitectureandthereasonsforthechoicesmade?Cantheyanticipate

vulnerabilities?Cantheydescribehowdatawillflow?

Bringingthistolifemeansinvestingsignificanttimeintheunglamorousworkofcreating

incentives(bonusesandperformanceKPIs)thatencourageAI-firstbehaviors,understandingwhichskillsareneededtobuildprioritysolutions,developingtailoredlearningjourneys,andcreatingnewcompensationmodels.

VanderWindenhighlightedtheimportanceoftraininginparticular.Asheformednewteamstoworkonnewopportunities,hedependedonfindingtopengineersandthentrainingthemuptouseadvancedanalyticsandworkwithcross-functionalteams.“Foreveryusecasewithanew

team,webroughtinafewpeoplefrommygroupwhohaddoneitbeforetoworkwiththenewpeople,”hesays.“Thiswascriticaltobuildontheskillsweweredevelopingandexpandingthefootprintofpeoplewhocoulddothework.”Histeamendeduptrainingmorethan500

engineers.

Getcomfortablewithambiguityand‘stagegate’yourefforts

Thisisoneofthehardestthingsforseniorbusinessleaderswhoareassessedon“makingtheirnumbers.”Ifyoubreakoutofincrementalismandtrulyreimaginehowyourbusinesscouldrundifferently,thiswillimplyacertainlevelofambiguityonthepathforward.AIcapablebusinessleadersmastertheartofstagegatingtheirefforts,achievingsomeeconomicbenefitswith

everytrancheofinvestment,andconstantlypivotingtheireffortsastheyencounterroadblocks.

Understandingtechnologyinitselfshouldn’tbethegoalofbusinessexecutives;understandinghowtoworkwithtechnologytocreatevalueis.Thismayseemdauntingatfirst,butit’svery

doable,asBoydunderscores:“Mylearningcurvewasverysteep,butaftersixmonths,Istartedfeelingmoreconfidentinmyeffectivenesstoleadatech-intensivebusinesstransformation.”

BuildingtheAImuscleofyourbusinessleaders8

WhatshouldtheCsuitedotodevelopmoreAIcapabledomainowners?OfalltheAIupskillingprogramsyoucouldimaginelaunching,nonewillbemorestrategicand

impactfulinourviewthandevelopingtechcapabledomainowners(aswellastheC-suite).

“Youcan’thireadomainowner,”VanderWindenemphasizes.“Thepersoninthatrolehasto

knowthecompanyandhavedomainexpertise.Youneedtofindthemandupskillthem.”There

areroughly15to30corebusinessprocessesorcustomerjourneysinmostlargecompanies(or

divisionsofconglomerates),eachwithabusinessleaderandateamsurroundingthatleaderthathastherightmixoffunctionalcapabilities.Thatmeansyou’llneedabout75to150leadersamongyourN-2andN-3population.

Considertakingthesethreepracticalactionstocreatethisbenchofdomaintalent:

1.Puttherightpeopleandincentivesinplace.StartbyclarifyingwhichcorebusinessprocessesandjourneyshavethemostpotentialtobetransformedbyAIandaskyourselfifyouhave

therightcurrentleadersinplace.Morespecifically,dotheyhavetheleadershiptraits

outlinedearlier?It’scommontochangeupto20to30percentofyourcurrentleaders.Ifyoudon’tmakeexplicitchanges,youwillcontinuefightingthegravitationalpullofthe

legacyorganizationandtheresistanceitcancreate.

VikramSinha,theCEOofIndosatOoredooHutchison,anIndonesiantelecommunications

provider,assertedthateffectivechangewas“10percenttools,20percentplatform,70

percentpeople.”AspartofacommitmenttotransformthebusinessintoanAI-nativetelco,Sinhahaschampionedanat-scaleAI-capability-buildingeffort,withquarterlyexecutive-

suiteAIimmersionprogramsandanAIleadershipinitiativeforthetop100executives,focusedonlearningbothAIandleadingintheageofAI.

2.Launchastrategicupskillingprogram.Whileproductmanagementisanimportantaspect

ofthenewskillset,thejobofAI-capabledomainleadersisbroaderandmorecomplex.

That’sbecausedomainownersownanend-to-endbusinessprocesswithhundredsor

thousandsofpeopleinbusin