While information systems (IS) have traditionally been used primarily for firm-wide operational efficiency, emerging theoretical perspectives have shifted scholarly focus to IS as a force that can drive value through business innovation. This study examines how IS strategy creates customer value through an innovative business orientation and how IS leadership and the organizational context can influence the relationship between innovative IS and business strategies. Integrating several research streams under the umbrella of the IS strategic management literature, we develop and empirically validate a research model based on confirmatory analysis and structural equation modeling applied to survey data collected from senior IS executives in 165 organizations based in the United States and India. Our results suggest that organizations that have an innovative IS strategy are well positioned to engage in business innovation, which in turn yields greater customer value. Furthermore, we find that strong IS leadership and a creative organizational climate enhance the relationship between an innovative IS strategy and innovative business orientation.