What role should IT play when IT-intensive sectors such as banking, logistics, and telecommunications innovate? Today, IT managers are key team players in the development and delivery of new products and services—initiatives generally sparked and led by business-unit leaders. Could other models of innovation allow companies to launch products faster, more successfully, and less expensively? Would IT play a very different role in these new models?

During the next few years, answers to these questions will come from the telecom industry. With revenues from landline services flat or declining, and growth shifting to wireless and new services such as satellite TV, the telcos are under tremendous pressure to cut their operating costs even as they envision, develop, and launch compelling new offerings that expand their horizon. The pressure to change—and fast—also gives their chief information officers an opportunity to redefine the role of the IT function and even of the CIO.

In the thick of these changes is Shaygan Kheradpir, the CIO of Verizon, a New York-based telecom company with upward of $67 billion in revenues in 2003, more than 200,000 employees around the world, and a desire to transform itself quickly. Verizon hopes, in just a few years, to...