The Internet has made technology everybody's business, inspiring managers throughout a company to experiment with how IT can revolutionize their corner of the business. At the same time, technology choices are exploding. These forces are creating a leadership vacuum, a gray space waiting for someone to paint a companywide vision for how E-business translates into higher revenue, lower costs, and better customer service. CIOs can star in this role, but only if they become established E-leaders who direct the mission rather than support it.

The first constant for a CIO: change. "The rate at which the position is having to reinvent itself is getting shorter and shorter," says John Keast, who last month was named CIO and chief technology officer of Branders.com, following a stint as CIO of San Francisco energy company PG&E Corp. "CIOs have to frequently shed their skin and become a different person."

It won't be easy. Reginald Foster, chief E-commerce officer of consulting firm American Management Systems, says executives within most businesses haven't looked to the CIO to lead the kind of radical changes E-business initiatives create. "CIOs have never really had the charter to go to a vertical-market business manager and say, 'I'm here to put you out of business,'" Foster says. "The majority haven't been hired to be that kind of change agent." Foster doesn't rule out a CIO assuming that role, but says it will only be done by those who can redefine the expectation of the position. "It could be the CIO, but it's the CIO with the leadership and business skills to catalyze and force business reinvention."

The successful future CIO will be an "assimilator of change," says Kenneth Bohlen, CIO at Textron Inc., an $11.5 billion manufacturing company in Providence, R.I. He predicts that CIOs who don't always put business goals first will never own that leadership role and will instead be pushed aside by other ambitious executives. "If IT people don't respond in a businesslike fashion, they're going to lose the opportunity to come to the boardroom," Bohlen says. "You'll see the business-savvy people who have come to understand some of the technology begin supervising IT functions."

As CEOs and other top business leaders put more focus on IT, the pressure on CIOs has never been greater. Roy Vallee, CEO of Avnet Inc., an $8.4 billion Phoenix distributor of electronic components and computer parts, says IT is to distributors what research and development is to manufacturers--the starting point for innovation. He expects his CIO to cut through the daily hype of new technologies and figure out how to help customers directly. "Prior to the Internet, most CIOs were accountable to the internal customer. If solutions fell short or weren't fully functional, the internal managers were a buffer," Vallee says. "Now, the people doing Web development are directly accountable to the external customer."

To emerge as E-leaders, it won't be enough for CIOs to build upon business knowledge, management and communication skills, or the ability to mobilize support for IT ideas. Where it was once sufficient for CIOs to get business managers to "buy into" IT initiatives, E-leaders can no longer be satisfied until business managers come to them with ideas for using technology to reinvent their business models, says Keast of Branders.com, which will offer online ordering of corporate-logo branded items. The CIO will need to move from evangelist for innovation to shepherd of good ideas.

Just last year, Keast had been content to evangelize. As CIO of PG&E, a $20 billion energy company, he spent his time proselytizing to managers about the potential for technology-driven innovation to change the business, and he considered it a huge accomplishment when he could "raise the bar on awareness." Still, these discussions generally happened only when he sparked them.

In the future, Keast says, he'll measure his success by whether IT ideas are bubbling up when he isn't around and whether people know they can turn to him to make them happen. For example, late last year, members of the energy trading department at PG&E called Keast with an idea: Could they create a computer system to automatically reconcile accounts that traders now close out at the end of the month by telephone?

"The question is, have I created an engine for ideas and is there a conduit to present those ideas?" Keast says. "The CIO has to be that go-to person for good ideas, no matter where those ideas come from."

While encouraging ideas for innovation from business managers, the future CIO can't lose sight of the primary need for E-leadership. Vallee of Avnet--which recently acquired $1.7 billion Marshall Industries--expects his CIO to see the big picture and spot when an enabling technology creates an opportunity that business-unit managers don't see.

Three years ago, Vallee and then-CIO Anthony DeLuca thought the falling cost and increasing performance of hardware for database-management systems could make a common, global database feasible. Business-unit managers resisted, saying they had higher IT priorities and couldn't put a return-on-investment value on the information the system would generate. "We decided to go ahead with the project anyway," Vallee says. Now there's a backlog of requests from business managers to put more data fields into that system. And the former CIO, DeLuca? He's been promoted to director of global operations.

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Illustration by David Guidera
Photo of Keast by Richard Morgenstein