CIO — In a world that is constantly changing, data keeps us grounded. The right statistics communicate succinctly, tell you where you are. In the four years since we began conducting our exclusive "State of the CIO" survey, we have compiled an annual benchmark of the CIO profession—your reporting relationships, your budget, your priorities, your challenges, the impact IT has on your companies and the best practices for your success.Our 2004 survey showed a new mandate emerging for CIOs—one that requires them to reduce costs while simultaneously using IT to drive competitive advantage. This seems like a paradox, but successful CIOs have learned that IT-enabled innovation is the way out of the bind. Though disruptive innovations—those that change the dynamics of an industry—get most of the publicity, innovation (broadly defined) is any improvement that delivers a business benefit. Even investments to comply with Sarbanes-Oxley can be considered innovations if the result is that executives are able to use financial data more effectively.

"From sheer competitive pressure, every business now realizes there is no time of [being] static, that change is constant, and innovation is required every moment," says Thomas Gerrity, professor of management and operations and information management at the Wharton School. Even cost reduction, Gerrity says, "requires innovative thinking" because it engenders change in business processes.

Given the pressure to keep moving, the context in which you operate and innovate is what defines your path to success. It makes a difference whether the brightest programmers flock to your door or you're struggling to attract fresh talent; whether the goal of IT innovation is to beat the competition or simply to keep up; whether you're rewarded for making money or for saving it. So for "The State of the CIO 2005," we delved more deeply into how you define the mandate for innovation and how, given that mandate, you're coping with the demands of your specific environment.

To that end, we went on the road to profile three CIOs, each of whom works under different expectations and within distinct constraints. The daily experiences of these CIOs—chronicled during two days in January when our writers walked the halls of corporate headquarters, attended their meetings with them and interviewed their colleagues as well—provide a window into innovation and a reality check on the state of the CIO.

One thing these profiles make clear is that no matter how big your budget, no matter how much your boss values your strategic vision, being a CIO is a hands-on job. Even CIOs who are rewarded for thinking big have to roll up their sleeves and dig into problems. Michael Earl, professor of information management at Oxford University (and a member of CIO's editorial advisory board), says that corporate priorities for IT regularly swing between a mandate in which CIOs deliver systems and one in which CIOs engage in business strategy and innovation. "Sensible CIOs pursue a balance between high performance on delivery and on the strategy and innovation side," says Earl. "When the climate starts to ask you for strategy and innovation, you end up spending 50 percent of your time on that." But you can't ignore tactical details.

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