Things aren't easy these days for leaders of the digital economy. Layoffs and shutdowns hit the news everyday.

Laid-off workers and investors with skid marks on their portfolios do have one thing in common: They both point to e-business leaders as the greedy or incompetent bad guys in this debacle. Are the charges fair?

CTOs and CEOs from a variety of backgrounds say that this is certainly not a fair assessment. For them, many of the current e-business leaders just had the (mis)fortune of never having lived through a significant economic downturn. Their performance during the dot-com meltdown was entirely predictable, CEOs and CTOs say. The most successful e-business leaders combine the best attributes of brick-and-mortar CEOs - prioritizing and execution - with the ability to think digitally.

The overriding message of e-business leadership should be consistent: This is a Web culture from top to bottom, where everyone is empowered to do Internet-enabled business. Success comes to e-business leaders who evangelize rather than encourage, and who empower rather than delegate. Effective leaders manage cycle time compression by moving decision-making from the corner office and distributing it throughout the company, preferably to the point in the organization closest to the customer.

Adversity is Good

Adversity is an indispensable part of every leader's training. Given that the younger dot-com CTOs and CEOs had little bottom-line business experience, it is hard to blame them for not knowing what to do when the latt?it the fan and the market began to slide.

However, the criticism is warranted. These dot-com executives failed to build or consult experienced management teams. Many of these CEOs who lost their businesses are great leaders who simply did not have the experience of managing through economic downturns.Adversity is Good Where were the boards of directors or boards of advisors? Great leaders understand that the inherent conservatism and collected experience of such boards can be a valuable check to the unrestrained tendency of small companies to bite off too much, too fast.

More than Vision

The power of vision by itself is overrated. The CEO has studied the leadership habits of hundreds of companies and finds that the market increasingly values execution and performance over vision. Today, companies must sprint immediately from vision and innovation to effective execution or competitors with inferior visions will leapfrog them.

The most effective leaders to survive the digital economy's slow down will be those who can manage complexity. The traditional IT issues of effectively managing software complexity and putting in place bulletproof operational processes are still critical success factors for Internet-based business models. But businesses must be both fast and flawless. The market will brutally punish those that do not get it right.

Opportunity lies behind failures. The good news and bad news is that we have many waves of disruptive technologies ahead of us. That's fatal for flawed business models. But it also creates wonderful opportunities for young technologists to create the better product, get experienced help quickly, and ride to success.

The stewards of e-businesses, CTOs in particular, are constantly barraged with ideas, proposals, partnerships, and business opportunities that distract the company from profitability and from its commitment to serving existing customers. It takes a highly focused management team to navigate these treacherous waves. Cultivating the ability to say "No" is perhaps more important than getting people to say "Yes." Success is half deciding what to do and half what not to do.

Taking their Lumps

Surviving e-business leaders who have been taking their lumps are now in desirable positions: They have a determination to eat, think, and breathe digitally, subscribe to a long-term business model, and keep at least a few toes in the proven business models of the brick-and-mortar economy. Some people didn't think that dot-coms needed to observe the laws of the universe such as gravity and the need for profitability. We now know they do.

Next to the inherent soundness of the business plan, the biggest factor for success is the quality of the leadership, as personified by the CTO and CEO. The driver of success is a leader who has the ability to focus. The more you focus, the more successful you can be.

One may apply the old sports adage to the survival fortunes of dot-coms: No pain, no gain. In the long run, the dot-com meltdown will continue to represent a significant learning opportunity for a generation of e-business leaders. Many of these leaders will learn from the downturn, will remember that all businesses have cycles, and will be in a much stronger leadership position when the pendulum swings back. ES