In this Q&A, Laudicina, VP of A.T. Kearney's Global Business Policy Council, talks with Optimize contributing Web editor Howard Baldwin about how executives, particularly CIOs, should look at the 21st century world differently.

Q: In your book, you talk about global risks. But companies have been doing business overseas for years—not just since there's been an uproar about outsourcing. What's different now about globalization that wasn't true five or 10 years ago?

A: There have been waves of globalization throughout history. You can look at the Roman and Athenian empires as precursors to modern globalization. And the period from 1874 to 1914 produced amazing advances in technology, such as the telegraph and transportation, which allowed for the rapid movement of people, goods, and capital.

More recently, we had more than 10 years of technology advancement and policy liberalization. Between Nov. 9, 1989, the day the Berlin Wall fell, and Sept. 11, 2001, there was a sense of plentiful opportunities. It was a long period of uninterrupted expansion. The old political rivalries were overtaken by the triumph of the free market. At our first Global Business Council Meeting in 1995, we advanced the notion of a backlash against globalization, but everyone around the table thought that was impossible. They thought the forces of integration and globalization were irreversible. We've now seen a transformation in the executive's perception of the world. In the boom days—the roaring '90s, if you will—everyone was struck by the benefits of integration. We focused on global supply chains, the benefits from E-commerce and outsourcing, and just-in-time manufacturing. All of these efficiencies gave us a universal sense that the world presented limitless possibilities virtually risk-free.

Q: How have things changed?

A: In the background was another world, in which integration and globalization were making us more vulnerable. We're now more vulnerable to viruses—computer viruses, SARS, and West Nile. While we were talking about opportunities for corporate income, individuals were seeing they might be displaced by corporate decisions to move assets to more efficiently and profitably conduct their business. Individuals felt personal vulnerability—both physical and financial.

People now feel vulnerable to terrorism, which is the final swing of the pendulum from 11/9 to 9/11—from a world that's risk-free to a world that's vulnerable and risk-averse. That reversal was compounded by the technology-bubble burst, the global recession, and the excesses that led to financial-compliance legislation such as the Sarbanes-Oxley Act.

Now business leaders are frozen in their tracks, not understanding that they need to engage the world to succeed. The companies that create value over time are the ones that engage the world and move beyond their borders. You can't wait for the world to stop spinning. You can't wait for balance. You need to understand a process, top-down and bottom-up, to map the principal drivers of global conditions. That way you can identify opportunities and risks. You can seize the opportunities quickly and still be nimble enough to handle the risk.

Q: That's a tall order.

A: In the book, we present an exercise that we do with our clients. We map five drivers of change in order to imagine a future they must navigate successfully. They parse the risks, size them up, and make rational decisions about how to manage them. It's a rigorous process to look at the drivers for future conditions so you can plot your corporate strategic plan and then drive it down through your lines of business to your customers. You have to look at how the forces of change, shifting preferences, and governmental and shareholder activism are likely to shape your environment in fundamental ways.

Q: So it's really a transformation in thinking based on new realities?

A: Yes, because businesses tend to see everything from a narrow perspective. They are just now beginning to appreciate that they need peripheral vision. You can't look at your operating environment and assume you'll be secure from disruption.

Q: What role does the CIO play? It must be more than knowing the underpinnings of technology.

A: Every person with any level of responsibility within the corporate structure has a role to play. When I was in the oil industry back in the 1970s, the planning process was top-down. We made assumptions, and the lines of business mapped those to their own efforts. Now everyone at every level needs to have an ear to the railroad track. Everyone has to think about the forces likely to affect the business environment, customers, and stakeholders, so we can effectively discern opportunities and manage risk.

That said, the CIO has a number of critical roles to play. Much of this exercise depends on the flow of information, so, clearly, the CIO has an important facilitating role to play. Also, because we'll likely continue to be prey to disruptions in electronic media, especially disruptions to the Internet, CIOs will have to manage those problems. Our analysis of Fortune 100 companies' annual reports indicates that 43% of them blame such events for their failure to meet earnings expectations. Corporate operations will be increasingly subject to this kind of interdependent risk. At every level, individuals need to be vigilant, and there needs to be a process by which people watch for suspicious activity.

The problem is that with technology, there's more information out there, but it's not clearer. I call this "information smog." Instead of becoming smarter, we're becoming more confused and suffering from system overload. The information explosion has created bewilderment that leads to inaction or foolish action and needless vulnerability to risk. The pace of change and the volume of information have made it more difficult, rather than easier, for people to make decisions. That said, the CIO's role is critical: He or she is responsible for the company's ability to share information and to have the right dashboards.

Q: Meaning a way to organize and codify the information?

A: Yes, but you can't set it and forget it. You have to monitor and measure the drivers of change. That helps you understand the way is world is turning and take advantage of changes. Those who blithely refuse to accept change, those who ignore it, those who decide not to engage the world all lose. You need a process that emboldens you to understand the opportunities, lower the risk, and move forward to meet shareholder needs.

Q: Then you need good information.

A: Yes, and a framework to sort and understand the information you have. I go through that with my staff. What incrementally are we learning and what's our capacity to absorb it? In the past, the CIO focused on enabling systems and increasing the flow of information throughout the enterprise. In the future, the CIO will facilitate how you can use that information to illuminate the right kinds of decisions.