Lena Hall is Senior Director, Developers & AI at Akamai Technologies, Executive Leader and AI Adoption Expert.getty​If you're a CEO or board member, how confident are you that your chief AI officer (CAIO) is applying AI toward profitable company growth, rather than spending money on a display of activity?Most believe that the key to AI results is choosing the right model and technical stack. However, it's the CAIO who determines whether AI delivers real business value. They decide what to measure, which projects to fund or stop and how success is defined.They either deliver real results or the illusion of it based on vanity metrics.​ McKinsey's 2025 global AI survey found that while AI adoption is widespread, only 39% reported a measurable impact on operating profit at the enterprise level.​ That makes the real value of the CAIO role one of the most important questions in enterprise AI right now.​​How To Evaluate The Chief AI Officer's Effectiveness​​The importance of this role will only increase. As AI moves from experimentation to accountability, the required competence level is rising sharply. Individuals who can consistently convert AI into measurable ROI are rare. And they're becoming even rarer as the competencies and skills required of them increase by the day.It’s important to differentiate between a strong and weak CAIO. Today, most employee evaluation and hiring systems are built around traditional methodologies: Check for skills, experience, pedigree, communication style and metrics. Those signals are often not enough. Many can speak fluently about AI transformation and still not achieve economic outcomes.One of the most common misconceptions in AI leadership is that weak outcomes come from weak people. The opposite is usually true. Most CAIOs today are experienced, intelligent and articulate. Their dashboards and reports look sophisticated and convincing. By all observable signals, the system appears to be working. And yet outcomes still fall short once the budget is spent.The natural instinct is to doubt the person. The more productive instinct is to evaluate the system. Ask yourself, can the system that the CAIO builds detect when something is drifting off course before it's too late to correct?Most organizations believe that tracking metrics is enough. But consider any AI initiative currently underway. Can you answer clearly what exactly is being improved, compared to what baseline, and how do you know that baseline is real? If the answer shifts depending on who you ask, that needs attention. Without a defined anchor, any improvement can be claimed and no degradation can be proven. And often, this is accompanied by impressive vanity metrics that make everything look like it's on track.Many leaders assume that positive early results justify scaling. But before an initiative expands, is there a defined threshold that changes the economics of the decision? If not, expansion may be driven by momentum rather than evidence or by invented metrics, not real ones. This is easy to miss and expensive to unwind.One of the most trusted assumptions is that initiatives that are currently marked as “in progress” are healthy initiatives. An effective CAIO would challenge this assumption: What would cause this initiative to be stopped? If the criteria isn’t defined, there's nothing protecting the organization from accumulating activity that appears valuable but isn't delivering.Ineffective CAIOs often use isolated metrics to show improvement, but the business doesn't respond accordingly. Development appears faster, but rework increases. Features ship, but customer behavior is unchanged.Hiring the right CAIO is one of the hardest decisions companies face today—and your company's future depends on getting it right.​Warning Signals: How To Know Something Is Going WrongYou don't need to wait for a formal review cycle to spot problems. There are patterns that indicate the professional in this role is drifting away from value creation. These aren't exhaustive, but they're the most common—and the most costly.• Vanity metrics dominate the narrative. If reports emphasize the number of AI tools deployed, volume of AI-generated code, number of teams using AI or pilot count—without connecting any of it to delivery performance or business results—the system is broken. Activity metrics are inputs. They're not outcomes.• Tool obsession replaces system thinking. If the conversation is always about which model, which vendor or which new capability—and never about which business problem is being solved and at what cost—the role has become a technology guesswork position, not a transformation leadership role.• No baselines exist. If the CAIO can't tell you what performance looked like before AI was introduced, they can't tell you what AI changed. Improvement without a baseline is a story, not a measurement.• There's a fear of stopping an underperforming project. A portfolio where every initiative is active and "progressing" is a portfolio without judgment. Real discipline means stopping things that don't work, even when they're politically popular or personally championed.​Before You Make Any ChangesIf you've found gaps, don't rush to replace anyone. Many capable leaders underperform in this role because the organization never defined what success actually looks like. A mandate to drive AI transformation with no measurement framework, no baselines and no accountability for business outcomes is a structural failure, not a personal one. Build the system first, set baselines, define stop-loss criteria and apply efficiency evaluation.​ConclusionHere's a simple test you can run this week. Ask your CAIO three questions: What baseline are we measuring against? What threshold would justify scaling our biggest initiative? What would make us stop it? If the answers are precise and consistent, you likely have the right person building the right system. If they shift depending on the day, you've found your starting point—not for a replacement but for a harder conversation about how success gets defined. The models will keep changing, but the discipline of measuring success honestly won't.​Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?