Twenty years ago, the role of Chief Technology Officer only existed at a few very forward-looking organizations. Today, every organization depends on their CTO to be an integral part of their management team. This is essential to achieving the organization’s strategic goals. What happened to facilitate the creation of this senior management role? The answer is simple – the world changed. Companies realized that, in order to maintain their position, not-to-mention grow, they needed to leverage technology. To do this, they needed a C-level manager who could bridge the gap between technology and the organization's business. Specifically, organizations needed a senior executive who is responsible for the deployment of technology to forward the organization’s goals.
A similar shift is underway in the field of innovation and organizations are just starting to notice. It is no longer enough to construct strategic plans that incorporate growth and expansion. Today's organizations must actively manage a portfolio of innovation that includes incremental and disruptive elements just to keep pace. Worse still, organizations must constantly look for disruptive competition from non-traditional places. They must build a culture that embraces new ideas and encourages other perspectives. They must have a dynamic leader who is responsible for all of these areas and works with the management team to obtain the organization’s strategic goals. They need a Chief Innovation Officer (CInO).
The role of Chief Innovation Officer is designed to do just these things and can best be summed up by three key areas of responsibility - Leadership, Strategy, and Execution - each of which has three major functions. I call this 32 Innovation.
Leadership: The Chief Innovation Officer needs to be more than a figurehead. He must be a respected leader who has the ability to inspire the rest of the organization. He must have the political capital and resources to credibly facilitate change. He must foster a culture of innovation that aligns with the organization’s beliefs and values. He must facilitate discussion, lead by example and constantly strive to look at things differently.
Strategy: The Chief Innovation Officer must be an active participant in the organization's strategic planning process but he is exclusively responsible for the company’s innovation strategy. This strategy must focus on both working on the current business as well as creating new business. The strategy must include different aspects of innovation including business model innovation, incremental innovation and discontinuous/disruptive innovation. His job is building a balanced strategy that takes all of these dimensions into account along with the history, values and culture of the organization. However, his job is more than just crafting the strategy. He is directly responsible for measuring results and adapting/pivoting as needed to reach the organization's goals.
Execution: For any strategy to be successful, the organization must execute successfully. Many times, the search for a CInO focuses on the candidate’s strategic background and overlooks the tactical skills of execution. In the innovation space, execution is very difficult because, by definition, you are asking people to do something they have never done before. Furthermore, because the only way to learn is to take risks and make mistakes, not all projects will be successful. A successful CInO must manage a portfolio of projects - quickly killing those that are not working and scaling those that are. To do this well, the CInO must construct an infrastructure to support the effort. Namely, he must build the internal support, measurement, review, and oversight procedures and processes that enable rapid experimentation and measurement without taking undue risks. Finally, he must understand the assumptions being made for each project and actively decide which are acceptable and which must be mitigated. In short, the best CInO needs the skills in execution of a serial entrepreneur combined with the strategic thinking of a seasoned executive.
Other considerations: Besides the three areas discussed in detail above, there are several other factors that contribute to a successful CInO. Probably the most important of these is his ability to act as a facilitator to stimulate the conversations as well as extracting and connecting different threads or ideas. A big part of innovation is looking at the same things from a different perspective and seeing where it leads. To be most effective, the CInO must have a view and experience from outside the company and industry, preferably from multiple unrelated industries. He can then leverage this experience to look at the same problems from a different perspective and be able to push people to think differently. Most importantly, the CInO must be able to call out the elephants in the room and constantly ask, "Why?".
- Business Model
- Portfolio Management