Imagination as a Strategic Imperative in Digital Transformation

Executive Briefing

Audience: Executive Leadership Team, Strategy & Innovation Leaders

Purpose: To reframe digital transformation strategy by emphasizing the role of imagination and belief alongside data and AI.

Context

Despite years of investment in digital transformation—cloud migration, data science, AI integration—many initiatives plateau or fail to generate breakthrough innovation. This is not primarily a technology problem, but a strategic and cultural one.

At the heart of the issue is an overreliance on data-driven certainty in spaces where uncertainty is irreducible. As economist George Shackle argued, "We don't decide based on probabilities. We decide based on what we believe is possible."

Key Insight

Imagination—not data—is the primary engine of transformation.

While AI and analytics are powerful tools for optimization, they cannot define vision. They are backward-looking by design, trained on past data. Strategic decisions about new markets, customer experiences, or business models require something AI cannot replicate: human belief, creative judgment, and the courage to act without guarantees.

Implications for Leadership

1. Digital transformation is not just technological—it’s conceptual.Technology enables change; it does not determine its direction. Strategy must lead.

2. AI is an amplifier, not a visionary.It enhances execution and insight but requires a human imagination to set the agenda.

3. Bounded uncertainty requires narrative intelligence.Leaders must shape compelling visions of the future—ones that inspire action and align teams beyond what data alone can validate.

Risks of Spreadsheet Thinking

• False confidence in predictability: AI models assume continuity. Transformation requires confronting discontinuity.

• Innovation aversion: Overemphasis on risk mitigation leads to incrementalism.

• Strategic stalling: Waiting for sufficient data delays action in fast-moving or emergent markets.

Strategic Recommendations

Action	Description
Reframe AI use	Position AI as a strategic tool, not a strategic guide. Use it to inform, not decide.
Prioritize vision crafting	Encourage leadership teams to articulate transformative “what ifs” beyond current models.
Invest in creative capacity	Build cross-functional teams that blend data expertise with design, storytelling, and imagination.
Accept ambiguity as operational reality	Make decisions where confidence is low but conviction is high. Lead with belief where proof is unavailable.

Executive Reflection Questions

• Are we making decisions based on data—or deferring decisions because we lack it?

• What futures are we choosing not to explore because they don’t yet fit our models?

• Do we have the imagination—and the cultural will—to build something the data can’t yet confirm?

Conclusion

AI and digital tools are not a substitute for leadership. In periods of transformation, belief—not certainty—is the most valuable asset a leadership team possesses. Imagination is not irrational. It’s strategic.

In a world driven by algorithms, the competitive edge is human.