Lori Beer can talk technology as well as any IT staffer. While rising through the ranks to executive vice president and CIO at insurance giant WellPoint, she could dive into any discussion about software development or hardware standards. But her job demands more than technical savvy. Accordingly, she has molded her skills and those of her top team to help WellPoint achieve its business strategy\u2014redefining how the company interacts with hospitals, doctors and patients in the new era of healthcare.\n \n \u201cWe are accountable for making our products and services real,\u201d says Beer, who in October was promoted to executive vice president of \u00adWellPoint\u2019s new Enterprise Business Services organization (the group includes IT and the CIO now reports to her). Under the terms of the recent healthcare reform, individuals will be more involved in decisions about their care than ever before, Beer believes. The CIO\u2019s job is to \u201cconnect all those dots to determine how we effectively balance managing risk as a company with bringing new consumer-facing capabilities to the table.\u201d (For more on how to change how the C suite perceives the CIO role, see "Three Opportunities for CIOs to Prove Their Business Smarts.")\n For advice about how to develop the leadership expertise you need to advance your role, visit the CIO Executive Council's Future-State CIO site.\n Like Beer, most CIOs want to fulfill this business-strategist role. Eighty percent say that\u2019s their goal, according to a recent survey that asked more than 200 CIOs about the future of the role, conducted by the CIO Executive Council (a global peer-advisory community founded by CIO\u2019s publisher). Rather than spend their days in the details of IT operations and cost management, or implementing systems to support redesigned business processes, they want to work on business strategy and identify ways to incorporate IT into products, services and even new business models. Getting there, however, is hard work.\n \n Being recognized as an agent of corporate growth and change requires CIOs to develop and apply leadership skills that many didn\u2019t automatically acquire as they moved from project manager to IT executive. Strategic leadership involves more than knowing how to deliver systems or design more-effective processes. Rather, strategic IT leaders must be able to foster collaboration across business functions, exert influence on internal stakeholders and understand how IT can be used to meet the expectations of external customers.\n \n That doesn\u2019t mean CIOs leave their functional or process-transformation responsibilities behind, however. The IT department has to keep the company\u2019s technology infrastructure operating while it keeps an eye on how it could improve business operations. For CIOs to be able to let go of day-to-day IT decisions, they have to cultivate a team of managers capable of keeping the lights on and executing projects.\n \n In fact, having an effective team is essential to positioning IT as a group that can increase a company\u2019s competitive advantage through technology and process innovation. Many CIOs establish trust with business stakeholders only when they demonstrate their team is competent at delivering basic IT services. Strategic CIOs build on that trust to become valued for their contributions to C-suite discussions about how to increase revenue and market share.\n \n To find out how CIOs prepare for and manage this role, we interviewed Council members from companies where they and their IT departments are linchpins in the development and execution of business strategy. CIOs have to earn the right to participate in this way, Beer says, by adopting the strategic perspective held by every other executive. \u201cIt\u2019s about having the skills to go from aligning with the business to helping accelerate the business.\u201d\n A Different Kind of Technology LeaderNo two CIO jobs are exactly alike, but at top-performing companies, CEOs want their CIOs\u2019 strategy\u2014and its execution\u2014to reflect their own plans, says Chris Potts, corporate strategist with consultancy Dominic Barrow. Often, CEOs are looking for the CIO to provide leadership for improving the company\u2019s standing in the market. (For more about what CEOs want, see \u201cWhat CEOs Expect from CIOs.\u201d)\n \n \n \n To think like a CEO, IT leaders must be able to understand the products their companies provide and how people use them. Ian Patterson, CIO at online brokerage Scottrade, has an office at the company\u2019s headquarters in St. Louis, but he\u2019s rarely in it. Instead, he walks around and spends as much time as possible discussing strategy with his C-level peers and keeping tabs on what makes the company tick. \u201cYou\u2019ll never be the expert\u201d in another function, he says, \u201cbut you can be the one to fill the gaps and connect the people\u201d with the knowledge to solve a particular business problem.\n \n One aspect of Scottrade\u2019s business that Patterson has learned to focus on is the speed with which his company must adapt to keep up with legal requirements and customer needs. Often, these external forces push Scottrade to change faster than even technology would dictate.\n \n For example, Scottrade used to make an annual business plan. But the pace of change in the financial services industry has made it necessary to refresh the company\u2019s objectives quarterly. So Patterson revamped the governance process for IT projects. While he still has a five-year IT strategic plan for long-term investments and innovation, current projects and proposals are now prioritized quarterly, he says.\n \n At WellPoint, CEO and Chairman of the Board Angela Braly sees potential for IT to lower costs while raising healthcare quality. But to do it, she needs Beer to understand how the company interacts with its many constituencies, including individuals, employers, and state and federal governments. \u201cIt is critical that she understand all of our internal issues, but also that she [be] a really externally aware and engaged CIO,\u201d Braly says.\n \n Before her promotion, Beer demonstrated her approach largely through her role as head of the company\u2019s internal operations council and as CIO, Braly says. Beer led the company\u00adwide \u201cBuilding a Better WellPoint\u201d initiative, which began by tackling improvements to internal processes. To succeed, Beer had to shore up her change-management skills. She also had to look at the enterprise in a cross-functional way, in order to see how data could create new corporate value.\n \n Now Beer is using the same skills to lead her colleagues as they examine external influences on the business. A top priority: adapting to the federal government\u2019s new claims-processing requirements, which are essential to implementing healthcare reform.\n \n The pull of day-to-day operations can distract CIOs from external business influences. During the recession, many companies focused more on efficiencies, with IT playing a big role. Similarly, following a merger or acquisition, integrating systems and infrastructure and reducing duplication are usually top IT priorities, even for CIOs with strategic roles. Once the tactical work is accomplished, CIOs need leadership expertise to re-establish IT\u2019s strategic focus, observes Kelli Crane, senior vice president and CIO with Thomson Reuters.\n \n During Thomson\u2019s acquisition of Reuters in 2007, IT was faced with completing a large number of projects in a short time: the staff was so overworked that they had to be satisfied with \u201cbeing an order taker, just getting the job done,\u201d Crane says. Once the integration with Reuters was under control, Crane launched several projects aimed at increasing market share and revenue. One was a new intranet, designed to establish a more collaborative environment within the company. The project also demonstrated how Thomson Reuters could enhance communication with customers and external partners using social media technologies.\n \n As she moved through the Thomson and then Thomson Reuters technology-department hierarchy over the past seven years, Crane spent a lot of time helping the company build its experience with customer-contact programs, which taught her about all the ways people want to communicate. \u201cWhen I think about where I add the most value, it\u2019s in change leadership and in thinking about where we can do things differently,\u201d Crane says. \u201cHow do we think outwardly about the customer experience, self service, different channels?\u201d\n Fill Up the BenchYet the CIO doesn\u2019t stand alone. The most common challenge to being a strategic leader is a lack of management depth in IT staff. While CIOs often have lieutenants who can lead process-improvement initiatives, they say they\u2019re missing managers who can partner with business stakeholders in daily operations instead of waiting for directives or requests. (For a list of the top barriers to advancing the CIO role, see \u201cStrategic CIOs Struggle to Achieve Ambitions.\u201d) Without these managers, CIOs can\u2019t find the time to work with their executive peers, oversee enterprise initiatives or keep up with market changes and customer needs.\n \n \n \n Kevin Murray, group COO and CIO with AXA UK, part of financial services company AXA Group, has addressed the problem by building a team that can handle the functional aspects of IT. He still stays informed about what is going on day to day, but he decided there was no way he could directly oversee IT operations and be an active player focused on company strategy.\n \n \u201cI couldn\u2019t do that until the other side of the wall was self-sufficient in running IT,\u201d he says. \u201cI always had my fires, we all do. But at least this isolated me so that I could focus on strategy, as well as become part of the business and become a trusted partner.\u201d\n \n To insulate himself from daily decision making, Murray installed six systems information officers (SIOs), who provide the leadership link between high-level business strategy and its execution. The SIOs, who report to Murray, have a mix of technology knowledge and insurance-industry expertise.\n \n The SIOs each have two vice presidents reporting to them: one is responsible for tactical decisions and the other is responsible for new projects. Through this structure, the SIOs and the vice presidents communicate business leaders\u2019 input on corporate IT strategy and incorporate it into daily operations.\n \n Murray hired the SIOs from across the insurance industry, choosing managers who had positions near the top of their previous organizations. Thomson Reuters\u2019 Crane, on the other hand, looked to fill such roles from within. She needed IT leaders with a blend of project-management and business-analyst skills who could work alongside business managers. These leaders serve as liaisons, explaining the technical perspective of developers to business users and relaying business and customer needs to IT.\n \n Crane doesn\u2019t care whether the people with this hybrid set of skills come from IT or another business function. \u201cEither way, you\u2019re providing some amount of training,\u201d she says. But the ideal candidates are individuals who want to learn how the other side works. She\u2019ll rotate them around the company, making sure they get involved with the cross-functional Enterprise Solutions Design team. By working on enterprise projects, these managers get experience using the business-analyst, communications and project-management skills that make for a well-rounded IT leader.\n \n Crane\u2019s team of liaisons has only been in place since the beginning of\u20082009, but already \u201cit\u2019s a place where people want to be,\u201d she says. \u201cIt\u2019s been seen by our staff as a good way to do things and a great learning opportunity to work with their business peers.\u201d\n Making the Best ImpressionEven when you have a management structure in place that gives you time for the big picture, company leaders who have long-simmering resentments of IT may block a CIO\u2019s escape from a tactical role. Particularly in companies where IT has performed poorly, CIOs need to establish their credibility by maintaining core systems before they can expect to be trusted to take on broader responsibilities, much less hope to be welcomed with open arms into business-strategy meetings.\n \n \n \n \u201cI got kicked out of the room a couple of times,\u201d AXA\u2019s Murray admits. Business leaders who weren\u2019t happy with their IT systems were still willing to put up with them rather than risk the upgrades or replacements that Murray proposed. Before Murray arrived, they had been conditioned to expect the worst from years of ad hoc\u2014and frequently unsuccessful\u2014technology implementations. \u201cIt look a lot [to convince them] that those legacy systems might get them through the year, but they weren\u2019t going to get them through the next five years,\u201d Murray says.\n \n Having support from the company\u2019s CEO kept Murray in the room for the right conversations, but it was demonstrations of value\u2014such as a solution for automatically applying business rules to product releases\u2014that lowered the barriers to business leaders accepting IT as a strategic contributor to the company\u2019s growth.\n \n At first, Murray says, \u201cno one really understood what [the system] could do or why we needed it.\u201d But when other executives saw that it decreased the amount of time it took to bring products to market, \u201cit started to win a little confidence that maybe there is something to this technology stuff, and maybe this is going to make us more competitive.\u201d AXA used to launch one or two products a year; now it launches eight to 10.\n \n Crane, meanwhile, found that her executive colleagues at Thomson Reuters welcomed her in a strategic role despite the amount of time she had spent on tactical projects during the merger. \u201cI think our key stakeholders realize that you need very diverse backgrounds and skills to make the best decision,\u201d she says. CIOs shouldn\u2019t be afraid to reclaim the strategic ground that will allow them to deliver the most value.\n \n The key to doing so, according to consultant Potts, is for each CIO to determine what strategic role they play that is different from other leaders at the executive table. Whether that role is to focus on customer value or internal productivity (or both), CIOs must establish their expertise and be recognized for it, he says.\n \n Crane has been able to establish her influence with Thomson Reuters\u2019s leadership team because she demonstrates that she knows how the business operates, says Michael Moore, the company\u2019s global head of internal and online communications.\n \n Moore believes that you can describe the expertise of many good business leaders as \u201cT-shaped.\u201d He envisions a vertical line representing a leader\u2019s specialty (such as IT) and a horizontal line representing his or her knowledge of how different parts of their company work. Crane\u2019s knowledge and experience fits this model, he says. \u201cIn our business, the platform, the technology, the ability to target, it\u2019s just as important as the message you\u2019re getting out,\u201d he says. \u201cSo we constantly work together\u2014her team, my team, and both of us personally\u2014to figure out how to address our users\u2019 needs.\u201d\n What the Future HoldsAs more companies realize the benefits of having a strategic, externally focused CIO\u2014and more CIOs are able to step into that role\u2014the CIO\u2019s career path is likely to change.\n \n \n \n Some CIOs who master the strategic role will be able to use that experience to reinvent the IT function at other companies. A strategic focus also opens up new opportunities for IT executives who want to run a business or serve in another C-suite role.\n \n At VocaLink, which processes United Kingdom and international payment transactions, former director of IT Nick Masterson-Jones is now the managing director of transaction services and has P&L accountability for the business unit. He hasn\u2019t left IT behind, however. If anything, he says, he\u2019s using technology in the most strategic manner possible: to completely rework VocaLink\u2019s business processes. As the executive in charge of providing a core service, he is better positioned to use technology to advance corporate strategy, he believes, than he was when he was just working with the executive in charge.\n \n Bill McCreary, vice president at specialty glass manufacturer Pilkington North America, is also taking on the directive of creating new business opportunities. While still accountable for the technology group at Pilkington, he is now also chairman of a new joint venture, called DyeTec Solar, between his company and Dyesol, which provides materials used in solar energy cells. He oversees the venture\u2019s efforts to capitalize on science and technology breakthroughs to create solar-energy products. Investors gave him this opportunity in large part because of his experience, he says, including his work as an IT executive addressing external customer needs and his work on the boards of venture capital firms.\n \n At WellPoint, Beer\u2019s new role as head of Enterprise Business Services gives her the opportunity to integrate the strategic capabilities of several core business-support functions, including service operations, sourcing and supplier management, with IT. Now that the CIO reports to Beer, her role is entirely focused on improving how the company operates.\n \n But even for CIOs who plan to stay in the IT executive role for the foreseeable future, the road is clear, Beer says. \u201cWe have to focus beyond doing the basics well, beyond streamlining and driving efficiency internally. To me, the next level is about how you help the company grow.\u201d\n \n For advice about how to develop the leadership expertise you need to advance your role, visit the CIO Executive Council\u2019s Future-State CIO site at council.cio.com\/programs\/future_state.html\n Follow CIO Executive Council Editorial Manager Diane Frank on Twitter: @dtwfrank.