Over the last month, a series of executive shakeups has sent a clear signal: The gap between today’s leadership skills and what’s required to run an AI-imbued enterprise is widening -- fast. Three major CEOs -- the heads of Walmart, Coca-Cola and Adobe -- have stepped down, acknowledging, implicitly or explicitly, that they are not equipped to lead in what comes next.

The message? CIOs who fail to reskill face the same reckoning as out-of-date CEOs.

That’s the real disruption AI is driving. AI is not simply changing tools or workflows inside companies -- it’s exposing whether leaders know how to operate in what may be the biggest business change any of us will experience in our lifetimes.

That’s why “Rewired: How Leading Companies Win with Technology and AI,” the second edition of McKinsey’s playbook for the AI era, is worth paying attention to. The book’s core argument is that companies will need to rebuild how they operate from the ground up. The question is whether CIOs -- and the leaders they work with -- are actually prepared to do that.

Related:How CIOs run and rebuild the business at the same time in the AI era

Competitive strategy for the AI era

“Rewired” argues that traditional routes of competitive advantage are breaking down -- and that simply adopting AI tools into day-to-day workflows is quickly becoming table stakes.

In today's world, business capabilities are the true source of competitive advantage -- and building them requires something far harder than tool adoption: it calls for reimagining core business processes, products and services end-to-end, with AI systems embedded at their core.

To do this, CEOs and CIOs must work together to design AI systems that reshape how the business operates.

Done well, these systems enable superior customer experiences -- reasoning through complex interaction variations, learning continuously from feedback and dynamically adjusting actions. These are capabilities that proved elusive when I personally trained experienced telesales teams, yet they are second nature to well-designed virtual agents.

For this to work, CEOs and CIOs -- as “Rewired” emphasizes -- must rearchitect their organizations, making them faster and more flexible so they are ready for AI-based transformation. In some cases, entirely new operating models will be necessary.

The new enterprise operation

A core idea in “Rewired” is that AI evolves from assisting work to executing it. It identifies what needs to be done, chooses the right response and carries it out with precision.

The book describes four stages:

Related:AI transformation: Early wins are not enough for CIOs

In practice, the shift that matters most is toward the latter two.

CIOs need to understand where this is all going and engage the rest of the enterprise leadership in the business changes required.

Organizations will move from functional silos to workflow-based structures. Managers will shift from supervisors to orchestrators -- developing hybrid workflows, designing guardrails and balancing human judgment with machine consistency.

Business leaders move from domain owners to systems integrators. Experts move from practitioners to AI agent coaches.

Today, software engineering is not about coding so much as it is about steering, applying judgment and setting priorities. Engineers will increasingly focus on structuring agent tasks into precisely defined workflows and ensuring their activities are predictable and high-quality.

In this model, agents take the night shift, doing the heavy execution work -- coding, testing, reviewing and documenting. This shrinks development cycles from weeks to days. It also enables teams to finally tackle the hard work of rearchitecting systems.

Related:Leading an 'Octopus Organization' -- The CIO's new mandate

How business leaders need to change

“Rewired” makes it clear that this shift extends to business leadership as much as frontline employees. Business leaders will be transforming their companies with technology for the rest of their careers – not as a one-time initiative but as a core responsibility.

The recent wave of CEO departures raises a broader question: What does the CEO role look like in an AI enterprise?

“Rewired” suggests that both the CEO role and business unit leadership will need to evolve. One point the book makes clear: CIOs will fail if they are the only ones in charge of transformation.

Instead, CEOs need to build up a tech-savvy senior executive team. CIOs can no longer be the only digitally savvy leaders in the room. Business leaders need a working understanding of agentic workflows, data engineering and architecture -- at a level that allows them to make decisions. Success will require much deeper collaboration between CIOs and business leaders. This is a radical change for CIOs who are used to operating solo.

Business leaders will need to take responsibility for leading the reimagining of their domains. That requires looking across the full domain (not just a portion of it) and identifying where AI, data and automation can unlock breakthrough performance. It calls for a more strategic, holistic view of how the business operates. Business-unit leaders need to develop their tech muscle, including getting their hands dirty.

The book’s broader point is that technology platforms must be treated by business leadership with the same rigor and ownership as strategy and organizational design.

How CIOs need to change

“Rewired” points to a recurring failure in technology-driven business transformation: efforts stall when execution is handed over to IT without business ownership. It’s a trap that the most effective CIOs actively work to prevent.

Instead, transformation must begin with CIOs and business leaders jointly crafting a vision with the customer at the center.

The book makes another important distinction: smart CIOs orient around business domains rather than individual use cases. The business domain -- not the use case -- is the unit of transformation.

For many organizations, this will be a change. In practice, that requires focusing on end-to-end business processes rather than isolated initiatives. It also involves prioritizing domains based on value potential and feasibility. Business cases need clear metrics tied to measurable outcomes, including organizational efficiency, operational productivity, accelerated growth and employee satisfaction.

To make all of this work, “Rewired” argues that CIOs must take several organizational steps: bring teams back in-house, convert more managers into engineers, upskill developers from novice to competent practitioners, and embrace agility through small, focused teams.

Alongside this, CIOs must build scalable platforms composed of reusable capabilities that provide faster delivery at scale. These platforms must be jointly owned by CIOs and business leaders. The organization’s risk, compliance, security, and audit functions must provide the guardrails that enable -- not slow down -- delivery. Adopting and scaling AI solutions ensure they deliver their expected value.

Equally important is data. The data that fuels AI must be grounded in real business problems worth solving, with solutions deliberately designed to address them. Too often, organizations fall short on data readiness, architecture, and integration – undermining AI at scale. CIOs must also ensure that data is protected in an LLM-driven world.

But even when the technology works, adoption is not guaranteed. A large part of this stumbling block comes down to usability: solutions must be easy to use, genuinely valuable to the end user, and supported by adequate training. This is the key to escaping pilot purgatory. Ultimately, it is in scaling that enterprise value is truly created.

The real test for CIOs

“Rewired” offers a useful framework for thinking about what comes next. But understanding the framework will be the easy part for CIOs. Acting on it is much harder. The risk for IT leaders is not failing to adopt AI but failing to change how their organizations operate. That’s the gap this moment is exposing.

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