By Larry Lange

CIOs today face what is undoubtedly their most daunting challenge yet: align IT with their companies' business goals while keeping pace with global competitors. Take Tim Frawley, VP and CTO of MGM MIRAGE, a major development company with interests in gaming and entertainment in Las Vegas. Frawley has introduced a concept he calls the "New Technology Introduction" (NTI), which allows an IT team to conduct proof-of-concept and lab tests on technology deliverables. "Innovation is extremely important to us here," Frawley says. "We're constantly asking, 'Is there a better way to add value to our business and customer experience while using technology?'"

Or consider Ceri Carlill, Technology Director for the Chief Technology Office, IT and Services, at BP (formerly British Petroleum) in the U.K. He oversees a team created to prove the business value of new technologies. "Innovation is absolutely core to what we do," Carlill says. "It allows us to continually explore new ways of delivering value to the business."

Game-changing IT leaders like Frawley and Carlill are still rare. In fact, only 3 percent of all CIOs and CTOs have an IT innovation program in place, according to a survey conducted last year by Forrester Research. Another survey, this one fielded by Capgemini in 2008, finds that while two thirds Of CIOs agree that IT is critical to business innovation, only a quarter of them believe IT actually drives innovation. "Businesses realize the name of the game is growth and having distinct differences from competitors—and that innovation is the way to play this game," says Eric Monnoyer, Global Leader of Business Information Strategy (BIS) at Capgemini in Paris. Adds Ram Charan, a management consultant and co-author of a recent book on game-changing companies: "Innovation is the integral, central driving force for any business that wants to grow organically and succeed on a sustained basis."